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Black & Decker Unit Plans Marketing Push

Black & Decker Corp. is showing some renewed confidence in the home improvement market as it makes an advertising push for its Kwikset brand locks.

The Towson, Md.-based maker of tools and furnishings employs about 400 in Foothill Ranch, which serves as headquarters for its hardware and home improvement unit.

A multimillion dollar ad campaign starts this month on TV and the Internet and is a first for Black & Decker’s lock unit.

The ads profile Kwikset’s SmartKey technology, which allow homeowners to “re-key” the locks to allow instant control over who has entry.

The ads, created by San Diego-based Vitro Robertson, aim to show the rekeying of the locks to be as easy as “putting on socks.”

The SmartKey product was created in 2007 as the housing market began its downturn and home improvement sales withered away.

Black & Decker’s overall sales continue to struggle—in the second quarter they fell 27% from a year earlier to $1.2 billion.

The hardware and home improvement unit didn’t fall as fast—sales there fell 21% from a year earlier to $191 million in the second quarter.

The unit’s profits were down a less dramatic 1% to $22 million on restructuring and lower prices for commodities such as steel.

Sales of SmartKey locks, among other Kwikset products, saw a slight increase in the second quarter, according to Jim Caudill, president of the hardware and home improvement unit.

“We’re seeing the market pick up a bit,” he said.

The company expects a stronger recovery next year.

In 2000, Black & Decker combined its Kwikset Corp. from Anaheim and its plumbing product business Price Pfister Inc. from Los Angeles into a 124,000-square-foot Foothill Ranch facility.

The company claims a 47% slice of the market for locks, competing with Ireland’s Ingersoll-Rand PLC’s Sledge brand with a third of the market and Sweden’s Assa Ab-loy AB at a 5% share for its more high-end products.

Black & Decker also competes with Hampton Products International Corp.—based just down the street in Foothill Ranch—with its Brinks brand of locks.

On the plumbing side of the business, Black & Decker has 15% of the market for faucets, competing with Ohio’s Moen Inc., part of Illinois’ Fortune Brands Inc., and Michigan-based Masco Corp.’s Delta Faucet Co.

Moen and Masco each has about a quarter of the market. Caudill said he believes Black & Decker has gained market share during the downturn.

One of Black & Decker’s biggest challenges has been to deal with overseas manufacturers able to make locks cheaper, as well as retailers and builders that have come up with their own brands, according to Caudill.

The key to growing is creating products that’ll sell at big home improvement chain operators Home Depot Inc. and Lowe’s Cos., he said.

The big chains make up about 65% of the unit’s sales, according to Caudill.

“Year after year we come up with new stuff,” he said.

Examples of newer products: The BumpGuard lock, which is designed to thwart thieves from picking it, and SmartCode, a decade-old keypad lock that was improved into a sleeker design last year.

At the height of the housing boom, Black & Decker employed about 450 people in Foothill Ranch, about 12.5% more than today.

Most of the jobs here are in sales, marketing, finance, human resources, supply and purchasing.

Production and distribution take place elsewhere around the world, including China, Mexico, Pennsylvania and Texas.

Caudill, who has been with Black & Decker for 20 years, came to his post in Orange County four years ago after serving as vice president and general
manager of the company’s accessories division for its power tools business in Maryland.

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