COLIBIRI’S LEADERS: Fred Levinger and Howard Hodgson.
It would be difficult to write a novel with the intrigue and drama that
surrounds what can best be described as the international lighter wars –
pitting Colibri against Ronson. Pitting the fired CEO of Ronson, a
dapper Brit considered one of England’s business stars and now the head
of Colibri International, against the flamboyant new chairman of
Ronson, also with an international reputation.
It pits a company, Colibri International that has been described as
nearly “destroyed” against Ronson International, which lost $12.6
million last year. It pits Howard Hodgson, the former Ronson CEO and now
Colibri International top executive, against Victor Kiam, the 70-year-
old who built his reputation as the owner of Remington.
Hodgson, who began in the funeral parlor business and, according to the
British press, has made a fortune in the stock market, has authored a
book, How To Become Dead Rich. And Kiam has authored a book, Going For
It. Both are intent upon winning the international market for their
companies.
At center stage, however, is Fred Levinger, a non-author, who owns
Colibri USA, a Providence based-company, that in March purchased the
international trademark to Colibri International. And what happens to
Colibri International, Levinger says, will have a direct bearing on the
growth of the $85 million Colbri USA.
What follows is a conversation with Levinger and Hodgson during a break
at a recent Colibri sales meeting here.
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PBN: Explain how Colibri USA purchased the international rights to the
name?
FRED LEVINGER: Actually in 1971 we purchased the Colibri trade marks
from Colibri of London, which was an international company that held the
trademarks worldwide. Then we started our U.S. operation, which is now
based in Providence.
What really happened with Colibri International is we purchased the
international trademark rights in March of this year. Colibri was an
international brand name that specialized in lighters, writing
instruments, and mostly men’s gifts. That was true in the United States
and that was also true, in the beginning, overseas, particularly in the
UK markets, in duty free and in the airlines. In March we had an
opportunity to purchase the trademark for the rest of the world. So now
the U.S. company, which originally bought from the overseas company the
U.S. rights, now owns the trademark in the rest of the world. So we in
effect took over the company that originally sold the trademarks to us.
The British company was operating independently from the U.S. Company?
HOWARD HODGSON: The company starts in the UK in 1928. It grows to be
British and international and duty free. Then in 1971, the company was
slightly short of cash and the deal was struck. Fred grew his business
in the United States ever bigger, ever stronger, whereas Colibri of
London, in fact, although internationally, very famous, was not as large
or profitable as the American company had become. Then in fact the
original founding family in the early ’90s sold Colibri to a gentleman
who went on to run it badly and ran it into the ground. Then Fred went
to acquire the world trademark rights.
What happened is Fred then reunified the name of Colibri. By having
those intellectual property rights (he) had got the world brand rights
to Colibri. In other words, the old Colibri of London is a wholly owned
subsidiary of Colibri Corporation USA It’s up to us to become
profitable, but already we’ll be adding huge value to its balance sheet
by just owning the world trademark rights and developing to where we are
now. We’re already now dealing in 57 different countries.
LEVINGER: Howard’s group took this international company from
essentially ground zero – because the company was almost destroyed this
past March – to where we’re now represented in 57 countries around the
world. We’re in duty free as well as several major airlines, such as
British Airways. And here’s the irony. Howard used to be chief executive
of the primary competitor of Colibri of London. He was chief executive
of Ronson.
Colibri here is grossing about how much?
LEVINGER: $85 million.
Before the purchase of the London company, what were its gross sales?
HODGSON: Less than probably a million dollars, because over a four year
period they have just been starved of any cash. Although they had some
international distributors left – the guys luckily had other brands to
sell. Colibri really drifted from about ’94 to when Fred bought it, and
they were on an ever shrinking turnover because of non-stock
availability.
At its peak what was it grossing?
HODGSON: It would have had probably about $15 million turnover. That is
extraordinary, that it has such a high profile, considering everyone
around the world knows the name. The major reason was because it had a
lot of its business in the duty free market.
What’s happened since March to the growth in London and how has that
impacted what’s going on here?
LEVINGER: They made a lot of progress because the most I think Colibri
ever had in its prior lifetime was maybe 20 distributors representing
that many countries. There’s been a lot of progress in terms of getting
the distribution into all parts of the world where we weren’t before.
The expectations of where the combined company goes?
HODGSON: Our initial situation obviously is to in the second year break
even. However wonderful it is to sell the product around the world, the
fact of the matter is you don’t want to do that at a loss. We have to
break even in our second year. That’s the target. Thereafter, of course
– by the way we operate the company, the growth end should be quite
steep because we don’t actually sell anything ourselves. That’s not
quite true. We do sell direct in the duty free business, we manage the
duty free business ourselves in terms of terrestrial ground sales to
the people like duty free shoppers or in fact in-flight sales to people
like American Airlines or British Airways, etc. Of course that business
is quite a tough business, but it has a huge payback benefits in that it
is it gives you massive exposure. For example British Airways has 36
million passengers a year. A major department (store) has say 12 seconds
to sell you something. That’s what they judge as your eye span as it
goes around. Whereas in fact as you’re strapped into an airline seat 12
hours, whether you buy the product or not you’re going to see it.
Then, the big money is to be made in international distribution. There
we don’t actually sell anything. We go around – a very small team – and
we find a business partner. We don’t want him to be a brand blocker. In
other words take our brand because he doesn’t want to sell it at all. He
doesn’t want anyone else to have it. Or a brand collector, who maybe has
20 brands. Therefore you never get any attention. We want somebody that
will actually be our partner, maybe sells something like Swiss Army
Knife. That’s good, because it doesn’t clash with Colibri but it’s
compatible.
LEVINGER: From the perspective of this company being a Providence
manufacturer and distributor, and there are some parallels with a couple
of other companies in the Rhode Island area, that have been relatively
successful in the international arena, such as A.T. Cross. One thing we
did when we bought Colibri of London is we established the London office
as a sales office. We took the whole warehousing that was in England and
we took all the operational aspects out of England and brought them into
our facility here in Providence. So Howard’s team is essentially a sales
and marketing team. It is oriented toward the international markets. But
all the back-up is now done here in Rhode Island. How we look at this
long term, we’re a manufacturer here. We have 550 employees in this
state and I’d say half of them are probably in manufacturing. What we
believe in the long run is that with Howard and his team’s expertise in
the international market– we were restricted previously to essentially
shipping and manufacturing in the U.S., Canada and Mexico only. We now
have the rest of the world to at least have a chance at, while before we
couldn’t do it because we couldn’t use our trademarks.
What are your expectations for growth, from $85 million to where?
LEVINGER: Let me say this, I don’t want to put any big numbers on him,
but let’s assume that we would eventually in five years do 25 percent of
what we could do in the United States, then we’re looking at somewhere
between $25 and $30 million overseas. I would say in the long run, with
the right people, I don’t think to say we’re going to do 25 percent of
the U.S. business in the rest of the world is a is an objective that’s
unreasonable. It’s going to take time, it’s going to take a lot of hard
work. But I would say that would be a reasonable objective and that
frankly would add jobs in this area.
HODGSON: It is very hard for people in Rhode Island to understand, but
there is a huge cache to Made in the USA as more and more manufacturing
has gone to the Far East to actually have something say it is made in
the USA is something which people really value … It’s very unlikely
that we would be able to find a distributor that would have such a big
sales force in such a big market as the current Colibri has on its own
doorstep, the U.S. market, Canada and Mexico. On the other hand, it
isn’t too much to expect 25 percent if you say you’ve got the rest of
the world.
Are there any other acquisitions that you see in the near term, and is
there any consideration about taking the company public?
LEVINGER: I think we’ve made five or six acquisitions in about the last
six years. Let’s project ourselves going forward with the addition of
this group of maybe $100 million. For us to make an acquisition of any
consequence, we’d probably require outside capital and may require a
public issue or private placement. These things sometimes are
opportunistic. If you start talking about adding 25 percent to the
volume base of the company the questions you’re asking are pretty
relevant. But I can’t give you any specifics, because I’m not supposed
to if I’m going public, but number two I honestly don’t have anything at
the moment in the offing. That’s not to say things don’t occur; they
seem to.
Howard when were you at Ronson?
HODGSON: 1993 to 1997, four years.
It would appear your parting was not a pleasant one?
HODGSON: It was an unhappy situation, because in the way – Ronson wasn’t
the first public company I had been executive of – but I fully intended
it probably to be the last. I was in a situation – these things happen,
I had a rights issue that following a fire that brought a major
keystone, cornerstone investor into the company. He and I didn’t see eye
to eye. Ironically, 22 months later I’m happy to say that I wasn’t on my
own. He’s since had five chief executives following me. The situation is
I probably wasn’t all to blame in the fact that I didn’t get along
terribly well.
I went off then and wrote a book, and eventually Fred and I talked. If
you can forgive my attempted American accent, he said ‘you god damned
took a lot of sales off Colibri of London to Ronson. Now I need you to
get them all back again.’
It was music to my ears, obviously. As the French say, revenge is a dish
you eat cold.
What brought you to Howard?
LEVINGER: We actually met when he was still chief executive of Ronson,
and we’d met once – we were actually also the agent for Dunhill. I had
been over there for a Dunhill meeting. He had called us, because it was
inevitable that the Colibri of London thing was going to go down. He
wanted to know if we were going to buy, or they were going to buy it.
And he wouldn’t stand in our way. Frankly, we just decided to meet and
we had discussions about several things. He had the European market. We
had the American market. I had no idea what was going to happen at
Ronson at the time. He was very entrepreneurial in the way he approached
things. I thought he had a lot of common sense and frankly I thought he
had a great marketing mind. I can prove it by the way he destroyed
Colibri of London. He was helped by a financial situation that frankly
I think was impossible at Colibri of London, But nevertheless he
certainly took advantage of it. When I heard he became available, while
there was some controversy at the time. You know at the end of the day
you have to have faith in certain people and I had a lot of faith in him
taking a situation which was kind of in the ashes and resurrecting it
and that’s why we got together. He gave me a book that he wrote and he
autographed it for me. He started, incidentally, in the funeral parlor
business and I think the book he gave me was called “Dead Rich.” Usually
when you get these books you don’t read them. But I read the book and I
found it fascinating and it gave me somewhat of an insight into his
thinking and his personality that you ordinarily don’t get.
HODGSON: It wasn’t by the way a very successful book. I have a garage
full of them and my nieces and nephews get one for each Christmas. They
look at me as if I’ve got Alzheimer’s and if they don’t open it they
won’t find the check I put inside. Somebody once very rudely said on the
BBC that if you want a really rare copy of Howard’s book get one that
isn’t signed.
The other player is Victor Kiam (now chairman at Ronson.
LEVINGER: It’s very ironic because I know Victor Kiam. I’m sure Victor
in his own way will put his imprint on Ronson as he has with other
companies.
Colibri and Ronson are on a collision course in some of these markets.
LEVINGER: There’s not a question of a doubt. Not so much in the U.S.
Ironically they don’t have the trademark rights in the United States.
It’s owned by a separate company. Where we’re on a collision course is
in Europe.
HODGSON: They made a BBC television program about it. It’s ridiculous
given the size of the international division of Colibri, and given the
fact that Ronson is a fairly poorly public company and it’s not enjoying
the best of health, which it hasn’t since its very serious fire. The
thing that I suppose is ironic is people think of Ronson, although
Ronson does all sorts of other things, they think of it as predominately
a lighter company. Although Colibri is very strong in jewelry and pens,
they think predominately of Colibri as a lighter company. And there
aren’t really any other accessible lighter brands. When one of the two
protagonist has been chief executive of the other one, it makes it
awfully nice for the press. When Kiam went to Ronson and I went to
Colibri it actually made the front page of the Financial Times.
Are there other competitors?
LEVINGER: No. I don’t consider Zippo in the same gift product range that
we are. I would say there are lots of similarities between the Ronson
situation overseas and the Colibri situation overseas. Overseas I would
say the last article hasn’t been written.
