Lasco Bathware Inc. in Anaheim Hills is floating in rough waters.
Lasco, like other home goods makers and stores, rode the housing boom of the past few years. Now the maker of bathtubs, showers and whirlpool tubs is faced with falling sales as less homes are being built and fewer people are refinancing their homes to pay for improvements.
“We’re definitely feeling it,” said David McFarland, Lasco’s director of marketing. “Our primary end customer is new home developers. So things have definitely slowed down for us recently compared to previous years.”
Lasco, which is owned by London’s Tomkins PLC, a publicly traded automotive and industrial parts maker, says it produces a fourth of all showers, tubs and bathing fixtures sold in the U.S.
Its bathroom fixtures are found in new homes developed by national builders such as Dallas-based Centex Corp., Beazer Homes USA Inc. of Atlanta and Los Angeles-based KB Home.
National hotel chains and universities use Lasco products, which also are sold by home improvement retailers such as Home Depot Inc.
McFarland said the company is confident it will pull through the downturn.
“We prepared for this,” he said. “We understand that the housing market is cyclical. We’re still doing better than we’ve ever done.”
Lasco generates $100 million to $500 million in yearly sales. Its Anaheim Hills headquarters has 100 workers. About 300 people work out of its 55,000-square-foot factory in Anaheim.
The company runs factories in OC, Washington, Nevada, Texas, Michigan, Pennsylvania, Virginia and Georgia. It employs more than 2,000 people companywide and owns about 300 trucks.
While Lasco has expanded throughout the country, its roots run deep in OC.
The company was founded here in 1947 and later went public in the early 1960s after a series of acquisitions.
Tomkins, which generates more than $3 billion in sales a year, bought Lasco in 1990 after it spent nearly a decade acquiring companies such as auto parts maker Gates Corp. of Denver for $1.16 billion.
A large parent company should help Lasco during a down market, McFarland said.
“The name and the reputation are there,” he said. “We’re just trying to gain market share and attract more customers during the down time.”
Challenges
Still, Lasco has other challenges to deal with.
Namely, the rising cost of fuel and petroleum products and competition from products made overseas. These factors make it hard for an American manufacturing business to compete, he said.
“Costs are rising. Things are getting made cheaper and cheaper overseas because customers are looking for inexpensive products,” McFarland said.
“But there’s always a demand for better quality,” he added.
Environmental issues also are bumping up costs, McFarland said.
As part of Environmental Protection Agency regulations, manufacturers such as Lasco have to renovate their factories with technologies that capture 95% of the pollutants emitted when plastic products are created.
Lasco spent roughly $20 million renovating all of its factories, including its Anaheim plant, with equipment that captures and controls emissions so that they are burned and used as a fuel source.
The company started rolling out the factory upgrades last year and finished upgrading all of its plants earlier this summer.
To make up some of the profit loss, Lasco plans to introduce new products to tap into more construction markets, he said.
“We’re being creative during this time. We’re just focused on doing what we can do for our customers so they don’t have to switch manufacturers,” McFarland said.
