Monrovia Update: CEO Confirms Rumors
Monrovia CEO Miles Rosedale confirmed this morning the operation has hired former Hines Nurseries senior vice president for sales and marketing Mike Trebing to explore the box store channel. Monrovia is 40 percent of the way to its goal of $20 million in
December 14, 2010
Monrovia CEO Miles Rosedale confirmed this morning they have hired Mike Trebing, former Hines Nurseries senior vice president for sales and marketing, to explore the box store channel. "Yes, he's absolutely on board," Rosedale says. "We're certainly looking at the channel, we've tried to make that clear."
He also says Monrovia is 40 percent of the way to its goal of $20 million in additional spring bookings to meet pressure from its banks. "We are certainly optimistic that we could (meet our goal). It's quite a remarkable start," he adds. "We're looking for all avenues to keep our business going."
Will Monrovia supply plant material exclusively to independents if it meets its goal? "That would certainly be one of our choices," Rosedale says, who adds that at this point there are no orders placed through the box store channel, contrary to rumors on the Internet.
However, if Monrovia were to enter the box stores, executives have made it clear it would be in a black pot with no branding, and that the brand would stay exclusive to independent retailers.
Rosedale says he and the Monrovia team continue to appreciate their independent customers' willingness to help them.
More than 100 retailers listened in to each of four conference calls last week as Monrovia executives detailed their request for $20 million more in bookings before Jan. 31. (Click here for the original story with more detail about the request.) The increase is in response to bank pressures due to multiple soft years, according to Monrovia executives.
"We have three banks that bank us," explained Rosedale on one of the calls. "One does not wish to bank companies that take more than a year to produce inventory. We are trying to replace one bank."
Chief Sales & Marketing Officer Bob Smiland noted that Monrovia has more than 3,000 retail customers, and that a $20 million target was not so unattainable. He also added during one of the calls that rumors of Monrovia already filling orders for a box store customer is not true.
"If a decision is made to sell any product into those channels we would advice and communicate that to our independent garden centers in advance. Until you hear from us, all the rumors that we've already accepted orders from somebody or another, just know that they are not true."
Here's a brief summary of some of the main questions and the answers from Monrovia executives:
Q: In the next two or three years will you be selling to the box stores?
Rosedale: We really don't know at this point. We haven't done business in the box channel in 15 years ...but it wouldn't be prudent, facing our demise, so to speak, to not consider all the channels, and that's what we're doing. We know our approach in the box store is not with the brand. We know the brand is something that has been built by the independent garden center and we want to keep that exclusive to your channel.
Q: This $20 million you need - is that over and above what's already booked?
Smiland: Yes it is. We need an increase of $20 million to reach a reasonable spring next year. The kind of spring we're hoping to have. We know that about half of our business is generally booked, and half comes off of open inventory.
Q: What has Monrovia done on the operating cost side to temporarily support a lower level of sales?
Elin Dowd (President): Since August we've been putting into place an operating plan to decrease our production. Since the summer we've decreased our headcount by 20 percent, we've reorganized our growing grounds to take out a level of management and we've brought in some outside resources to help us look at different ways to make our operation more efficient.
Q: Will there be any change in terms?
Smiland: I'll take your comment as a request we can consider.
Q: If you do have to go into the box stores will you be running trucks in with big Monrovia signs making the deliveries?
Smiland: If that happens, it would be our intention that we would not intermix our trucks. We would not use our Monrovia trucks - those shipments of larger quantities of bulk plants would be on common carrier. It is not our style or our intent to mix shipments.
Q: If you do go into the box stores would we be able to purchase the black pots at any lesser rate?
Smiland: I don't think we have a good answer on that - the answer is probably not. We don't grow black pot products for our current retail and re-wholesale markets. We'd probably look at the plants involved. Currently it is not our desire to expand our plain pot business. That is detrimental to what we've worked so hard to build our brand up over the last 20 years.