Michael Echolds started his career at Irvine-based Tropitone Furniture Co. in his junior year of high school, cleaning up the factory floor and welding together pieces of patio furniture.
Now, as chief executive of the luxury outdoor furniture maker with yearly sales of $100 million, Echolds has overseen the deal of his career, selling a majority stake in the company to private equity firm Pfingsten Partners LLC of Deerfield, Ill.
Terms weren’t disclosed.
Pfingsten buys manufacturing, distribution and media companies in the $25 million to $100 million yearly sales range. Other investments include North American Sports Media Inc., based in New York, and Norcraft Cos. of Eagan, Minn.
The sale is a coup for Echolds, who became chief executive in 1995. He sold part of his stake in the company and is set to stay on running things. He’s still a “significant shareholder,” Echolds said.
Doug Baker, chairman and third generation owner, decided to sell the company earlier this year. Baker and his sister, Angella Baker, had been the principal owners since 1992.
Echolds and Doug Baker are close, like brothers, Echolds said.
Hand-picked for the job by Baker’s father, Echolds built the company’s sales up from $25 million a year when he took over 12 years ago.
Echolds joked he has the “most boring resume in the world,it’s one line.”
|
|
Tropitone workers in Irvine: 350 local employees |
“I always felt that if I proved myself first, doors would open,” he said.
The company has about 600 workers, including 350 in Irvine and the rest at a factory in Sarasota, Fla. It also has a small office in Shanghai.
Echolds called the change in ownership a “nonevent” for workers, though those with the company for three years or more were given bonuses based on seniority.
The company plans to keep growing under its new owners, Echolds said. He could end up running other furniture companies Pfingsten acquires, he said.
“We’re the platform,” Echolds said.
A pilot and flying enthusiast, Echolds helped build the company by automating much of its manufacturing.
He sees the sale as a part of a continuum, with Tropitone going from being family owned and run to professionally run and now owned.
Pfingsten usually holds investments for five or six years, Echolds said.
Tropitone has one of the larger factories in Orange County, a 204,000-square-foot floor where workers weld, assemble and paint chairs, loungers and tables. They also hand stuff cushions and cut and sew fabrics.
The company ships 1,500 products a day. In 2006 it handled more than 40,000 orders. Some parts, such as the woven leather-like materials, are made in China. Everything is assembled and shipped from Irvine and Florida.
Half of Tropitone’s sales come from resorts and other business. The other half comes from sales through stores. Retailers buy at trade shows and at the Chicago Merchandise Mart, where Tropitone has a permanent showroom.
Tropitone is gaining market share in commercial and retail sales and expects double-digit growth overall this year.
Started in Florida by aeronautical engineer Burt Baker more than 50 years ago, Tropitone’s poolside loungers and “chat sets” are found at swanky hotels such as Bellagio and Hilton. The Irvine Company buys Tropitone’s poolside furniture for its apartment complexes.
Tropitone’s niche in upscale outdoor furniture has become big business in recent years. It competes with companies such as Minson Corp.’s Mallin, a furniture maker in Montebello, and Jordan Brown International Inc. in Pompano Beach, Fla.
The company and its rivals have been lifted by population growth in the Sun Belt, second homes and the boom in what’s called “outdoor rooms”,furnished patios, porches, backyards, even rooms with rollup walls, a feature of pricey homes in OC.
Stores such as Patioworld, Anaheim Patio & Fireside and La Paz Patio & Fireside sell Tropitone. You can expect to pay at least a few grand for a backyard set.
Casual furniture stores were jumping when people were refinancing their homes. Sales since have slowed but the outdoor niche has been holding its own, according to market trackers.
Casual furniture does some $2.4 billion in yearly wholesale sales, according to the Summer and Casual Furniture Manufacturers Association in High Point, N.C.
