Stanley works at spreading its name

Home Channel News, Nov 22, 1999 by Brae Canlen

Seeking profits, tool maker licenses its brand on products ranging from ladders to Christmas lights

At the annual meeting of Stanley Works, held in Columbus, Ohio, last April, the company's chairman and CEO John Trani announced his intention to start licensing the Stanley name to other manufacturers. Shareholders sitting in the audience thought Trani was referring to products such as work gloves, safety glasses, maybe even boots. But Trani had something broader in mind.

Stanley, which has been struggling in recent years to improve its productivity and profitability, debuted its new licensees at this year's National Hardware Show, and the assortment was, to put it mildly, curious. Some products -- like workbenches, pocket knives and gardening implements -- seemed to be logical extensions of Stanley's existing tool and hardware lines. A case also could be made for computer-aided design software and portable fans and heaters. But playing cards, monthly desk organizers and Christmas lights?

"Our brand is our equity," said Bobbie Hunnicut, Stanley's director of licensing. Hunnicut, whose last job was director of general merchandising at Harley-Davidson, was hired in May 1998 to develop the licensing program. In that year, Stanley had reported disappointing sales and earnings, and Trani vowed to trim back unprofitable skus that were clogging Stanley's factories.

"We wanted to offer a broader range of Stanley products without encouraging a sku buildup," said Hunnicut, explaining the impetus behind the new initiative. "For example, we can now give a full range of work gloves without having to manufacture, inventory and distribute them all."

Stanley's first partner was glove maker Magla Products, which signed a licensing agreement in November 1998. United Cutlery, a knife manufacturer, soon followed. Last January, Stanley announced a partnership with True Temper Hardware (now Ames/True Temper), which will make a line of Stanley garden tools and wheel-barrows. Stanley currently has licensing agreements with 25 companies that will add more than 800 skus to its assortment. Approximately two-thirds of these licensees will be ready to ship products by the end of this year, according to Hunnicut.

Already on the market are Stanley-brand playing cards (made by Hoyle Products); Stanley T-shirts, sweatshirts and hats (by Logo Athletic); power strips and extension cords (by Belkin Components); tool belts and aprons (by McGuire Nicholas); and a Stanley CAD software program for the DIYer supplied by International Microcomputer Software.

"We got with Stanley because of the name," said Jessica Hall, marketing coordinator for the Sevierville, Tenn.-based United Cutlery, which will put Stanley's brand on between 25 and 30 of its products, including a job-site knife and light-duty utility knife. "It's worldwide. Everybody recognizes the yellow and black [label]."

Hall added that the agreement could get United Cutlery's products into "a distribution channel we haven't been in before," such as Home Depot, Lowe's and the buying groups.

United Cutlery will pay Stanley a percentage of its gross sales from the branded products each quarter. Hall said she didn't know what that percentage was.

While Stanley is attempting to focus on "near-neighbor" categories such as ladders, drilling systems and electrical lighting, products such as playing cards, clothing, model trucks and racetrack collectibles support the leisure activities of Stanley tool users, Hunnicut explained.

But there are some categories that are too far-fetched, even for Stanley. 'You won't be seeing Stanley in evening wear for men," Hunnicut promised. Wallpaper and fashion home accessories were also rejected, she said.

Stanley used a New York consulting firm called The Beanstalk Group to help select, investigate and negotiate with its new manufacturing partners. "We never talked to only one company in a particular category," said Hunnicut, who examined each firm's retail background before the agreements were signed. "Our [partnership] contracts have very clear parameters," she explained. "We review every product, every ad and every piece of collateral that goes out."

In addition to design and manufacturing, Stanley's partners are responsible for shipping, marketing, customer service and sales. Hunnicut agrees that the arrangement might seem, at first, like Stanley itself has received a license -- to print money. "The difficulty lies in getting a conglomerate of independent companies to head in the same direction at the same time," she explained. "It's not as easy as it looks."

Hunnicut admits that Stanley has another licensing aim that rises above sku management or short-term profits. "Retailers want to make decisions easier for their customers," she said, and "Stanley wants to expand brand loyalty. One of our goals is to extend the ubiquity of our brand."