A Bristol kayak manufacturer last week shut its plant, preparing to move its operations to North Carolina, after its purchaser was unable to find an adequate space in Rhode Island to consolidate its operations.
The new owners of Heritage Kayaks, North Carolina-based Legacy Paddlesports, say they would have liked to keep making mid-priced polyethylene kayaks in the area, and moved the rest of the company up north, largely because New England has a strong market for kayaks.
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But, they say, Legacy found a better deal in North Carolina.
CEO Bill Medlin said it’s going to cost the company 60 percent less to move to an existing North Carolina facility where it can consolidate all its operations than it would have to build a new such facility at North Kingstown’s Quonset Business Park. And that difference matters, Medlin said, because “Heritage has never been cash-flow positive.”
“Finding existing available space [in Rhode Island] was almost impossible,” Medlin said, adding that both states were vying to keep the company. “Building availability and cost of the building outweighed either state.”
The shortage of good manufacturing space in the state has been in the news lately, especially in connection with technology companies that have moved away or been unable to move to Rhode Island because of it.
In this case, Medlin said, it helped that he and Legacy Paddlesports owner Andy Zimmerman both live in North Carolina. It also mattered that the 160,000-square-foot space they’re acquiring was available for them to move into before an important trade show in August.
Though staff at the R.I. Economic Development Corporation discussed several options with the company, they weren’t able to find a solution, given “the time frame and the cost to build something as quickly as they wanted to be in the facility,” said Paul Harden, RIEDC business and work-force development manager.
“If you could snap your fingers and say: ‘Here’s a 100,000-square-foot building,’ that’s one thing,” Harden said. “We didn’t have any existing buildings that met their needs.”
So after eight years in business, Heritage Kayaks last week ceased production at its 70,000-square-foot facility in Bristol. The company had employed about 30 people full-time when negotiations for the sale began earlier this year, Medlin said.
Seven Heritage employees will move to North Carolina. Legacy, which currently employs about 80 workers, plans to employ about 250 workers by 2008.
Legacy “offered every full-time employee a position in North Carolina,” said Jared Sousa, an employee since the beginning of Heritage Kayaks who is among those who’ll be moving.
“My reason for moving down is I really enjoy making the kayaks,” Sousa said. “I enjoy paddling them. I enjoy using what I produce.”
Medlin said not everyone was willing to move because many of the workers have “very deep roots” in Rhode Island. “We left the door open. They can still look when we’re settled and decide then.”
Some local kayak retailers expressed disappointment at seeing the Bristol-made kayaks leaving the area.
“Hol Whitney, [former owner of Heritage], he’s very well-known,” said Ray Brierly, owner of Canoe Passage Outfitters in Warren and Taunton. “We had a good relationship. He’d be coming running out to say hello when we went to pick up boats.”
But the departure also will have effects on his company’s revenue, Brierly said. “It’s going to cost more for our shipping. We’re going to have to increase what we charge for the boats.”
Brierly said he worries the kayaks might not sell as well, because their being made in Bristol was a selling point. But Canoe Passage will continue to carry them, “because they make a good product. … We’ve sold a lot of their boats.”
Ocean State Adventures in Bristol has pulled the line completely from its store because the company has moved from the state. Owner Jack Radcliffe said the brand Heritage Kayaks “doesn’t have as good a name as it did since moving south.”
“We used some of their boats in the rental fleet last year,” Radcliffe said. “We weren’t satisfied.”
Medlin said Legacy intends to add features to the mid-priced polyethylene plastic kayaks, which go for roughly $450 to $850. It also plans to improve the plastic and add a lifetime warranty.
The U.S. paddle-sports industry as a whole is worth about $350 million a year, he said.
Two large companies own half of that business. Five mid-sized companies own about $150 million. And the remaining $50 million is owned by about 30 smaller companies, such as Heritage Kayaks, which had been manufacturing about 12,000 to 15,000 kayaks per year.
The Heritage acquisition will be the first of many for Legacy, Medlin said. But even as Legacy expands, the company plans to sell and market its products to smaller specialty retail shops, not to big-box stores.
“We aren’t looking at being the largest,” Medlin said. “We want to be understood to be one of the best brands out there.”
That’s good news for retailers like Brierly, who said he’s losing a large portion of the market when manufacturers sell to stores such as Dick’s Sporting Goods, because he can’t compete with their lower prices.
“It does affect the business,” he said.
