Monrovia Falls Short Of $20 Million Target
Monrovia has taken an order from Home Depot for the western United States for unbranded nursery stock in an effort to shore up the business.
February 1, 2011
Monrovia failed to reach a target of $20 million in incremental sales by the end of January. As a result, the company has accepted an order to deliver unbranded Monrovia plants to Home Depots in the western United States this spring.
"No, we did not meet our goal. If we had, we would not have sold plants to Home Depot," says Bob Smiland, chief sales and marketing officer for Monrovia."
Including the Home Depot order, the company achieved $12 million in additional sales, Smiland says. "We still have a lot of plants for sale."
Following the economic downturn and a significant three-year slump in sales, Monrovia was required by its banks to meet certain financial targets for this spring. The company's leadership had asked its independent retail customers to place an additional $20 million in orders by the end of January or face the prospect of having to move inventory in other ways, namely selling its product through box store channels.
"For those independents who increased their orders, we are extraordinarily grateful," Smiland says. "Some of them placed significant orders.
"We grew these plants in 2006, 2007 and 2008. 2011 was scheduled to be the biggest year in our company's history. We were very excited about the prospects. We had no idea what would happen starting in '08."
The Home Depot order is the only one Monrovia has from box stores to this point, and that order will be spread across the western half of the country, Smiland says. For the consumer, there will be no identification to let them know they are buying Monrovia material at Home Depot.
"These plants will be delivered in black pots with a plain, generic label. There will be no mention of Monrovia anywhere, and they will not be delivered in Monrovia-branded trucks," he says.
Smiland also points out that the material will not be sold through pay by scan, and the pricing will be the same as that offered to Monrovia's independent customers placing large orders.
"The Monrovia brand absolutely remains an independent exclusive. The benefit the box stores will be able to sell isn't the brand. They will be able to promote this material as a premium quality plant," he says. "We are very pleased to have this order from Home Depot."
As for whether Monrovia will continue to offer material to box stores past this spring, Smiland said the future is still uncertain.
"We don't know at this point. We already have plants grown for 2012 and 2013, and we have to meet our financial targets. We can't keep throwing away plants. It's all speculation at this point, but some signs point to a shortage of plants next year. And we are optimistic about this spring, particularly compared to the last two years."
The goal, he says, it to get through this spring, meet the company's financial requirements and regroup to determine future directions.
"This was not our first choice of channels, and it certainly is not the way we have done things historically," Smiland says. "We have financial targets to meet our bank covenants and this will help. We're very grateful for the order."