Color Spot Leasing Hines Locations

Color Spot Leasing Hines Locations

Hines Nurseries has signed a letter of intent to sell assets from its nurseries in Chino Valley, Ariz., and Fulshear, Texas, to Color Spot Nurseries, the largest greenhouse operation in the United States.

Hines will own and operate the nurseries until closing in June 2011, when Color Spot will purchase the assets of the facilities and lease the land from Hines. Hines, which also sold assets from its location in Fresno, Calif., will continue to serve its customers nationwide from nurseries in Fallbrook and Winters, Calif., and Forest Grove, Ore.

“Focusing on the nursery business for all our customers is the next step in our strategic plan to rebuild Hines,” says Steve Thigpen, Hines CEO. “This is a milestone in our long-range strategy to transform Hines Growers into a strong, progressive nursery company.”

Hines’ Arizona location encompasses 40 acres of nursery and 400,000 square feet of greenhouse space. Its Texas location includes 420 acres of nursery and 800,000 square feet of greenhouse space. Color Spot will develop its own programs as it moves forward at those two locations.

Hines, meanwhile, is shifting away from annuals to focus on perennials and shrubs.

“Prior to my leaving originally, Hines had some pretty serious involvement in the color industry,” Thigpen says. “More recently, we were down to these two sites. It’s difficult to have one toe in that (annuals) segement of the business and still try to meet customer needs. For example, the team at Fresno is excellent, but if you end up selling out of something, where are you then going to get that product. So it makes much more sense for a color company to have those facilities and do what they know how to do best.

“What we are doing now is turn our attention back to what made Hines great as a company back in the mid-1980s and before that. We’re getting involved in the shrubs, patio planters. The annuals just aren’t our forte.”

Annuals are a forte for Color Spot, though.
 
“Each of the facilities being leased by Color Spot has the capacity for significant business growth,” Thigpen says. “The purchase enables Color Spot to expand its footprint in several of their markets at a time when they are close to capacity in their existing facilities.

“We believe, when complete, the asset purchase by Color Spot will strengthen both companies. It’s a win-win for both companies. We remain committed to supplying our customers with the highest quality nursery, perennial and specialty products.”

At the moment, Hines is operating at less than capacity at its three remaining nurseries.

“We have right sized the company to where the market really is today, which is considerably less than where it was five years ago,” Thigpen says. “We will not have excesses. As things turn around, we will have significant opportunity to expand and fill some of these up to a greater degree. But for now, we are going to be very cautious. We’re going to keep the size of the business comfortable but not get way ahead of ourselves.”

Color Spot ranked first on Greenhouse Grower’s Top 100 Growers list this year with 14,274,000 square feet of environmentally controlled greenhouse space. Hines ranked ninth with 4,834,000 square feet.

Read more about the ongoing transaction in Greenhouse Grower’s exclusive Q&A with Color Spot President Jerry Halamuda and our Q&A with Thigpen. Learn more about Hines and Color Spot online at www.hineshort.com and www.colorspot.com, respectively.

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