Inside the ROHL acquisition
This prompted me to ask Lou Rohl, CEO of ROHL, a few questions concerning the acquisition.
On Friday, Aug. 19, I received a call from my good friend, Ken Rohl, who shared that ROHL was being acquired by Fortune Brands, a member of the S&P 500 Index. By now, you’ve probably heard the news.
The Ken/Hank friendship dates back to the late 1970s when Ken was the Western regional manager for Elkay and I was a corporate manager for Slakey Bros., a large PHCP distributor headquartered in Sacramento, Calif.
Ken and I formed an immediate bond. Both of us grew up in Pennsylvania, graduated from college there and started our first jobs in the Keystone state — Ken with US Steel and me with a large PHCP distributor. Our year of birth and birthdays are only two months apart. (Ken being the elder).
In the early 1980s we had both started our own businesses. Ken started what today is ROHL and I started one of the first independently owned showroom businesses in America.
In June 1983, Ken and his rep for Northern California called on me with the purpose of selling us a pullout kitchen faucet. After looking at the product and inquiring about the price (about $250 at the time) I told him he was “nuts.” I didn’t think anyone would want a funny looking thing like that and certainly wouldn’t pay that much for it.
Ken’s response was, “Hank, I’m going to give you the darn faucet and we’ll even install it on that good-looking kitchen sink over there!” Not being one to look a gift horse in the mouth and Ken being a good friend, I gave the OK. Immediately, that faucet became our No. 1 bestseller. That shows you who the smart one was.
Going forward, both our businesses grew, and both Ken and I became very active in the National Kitchen and Bath Association and then the Decorative Plumbing and Hardware Association. Both of us have been honored to be entered into their respective halls of fame. Although we’re both semiretired, we stay in touch on a regular basis.
So imagine my surprise when Ken called and announced the pending acquisition of ROHL by Fortune Brands. Over the years Ken brought his three sons (Lou, Mark and Greg) into the business. Being a friend and customer of the whole Rohl gang, I have watched the company grow and thrive. As a business consultant I can honestly say that in my opinion ROHL is one of the very best-run businesses in our industry. They have great vision, great people, great products and most importantly, great customers.
Let’s look at why this marriage with Fortune Brands makes sense and why I believe it bodes so well for our wonderful industry.
In order to understand why a multi-brand business with annual sales of $4.6 billion would be interested in ROHL, I contacted Nicholas Fink, the newly named president of the Global Plumbing Group.
Fortune Brands is the parent of Moen, one of the best-known names in the plumbing industry. They are headquartered in Deerfield, Ill. (the same city where Supply House Times’ world headquarters is located) and under its product umbrella is Master Brand Cabinets, the largest kitchen-and-bath cabinetry company that serves more than 5,000 kitchen-and-bath dealers.
Fortune also has the Master Lock, American Lock and Sentry Safe brands in the home-security products arena, as well as Therma-Tru doors. Fortune has operations in the U.S., Canada, Mexico, parts of Europe, China and Japan, and worldwide has 22,000 employees.
Fortune also recently acquired Riobel, a well-known higher-end faucet line marketed in Canada. I asked Fink why the company moved into the higher-end faucet business.
“Fortune Brands benefits from the acquisition of Riobel and Rohl by gaining distinct brands at different price points that broaden our plumbing portfolio beyond Moen and helps us to reach a wider range of consumers and customers at all price points within a plumbing category,” he said. “Furthermore, as with Moen, the segment is very consumer-focused. Brands matter.”
I also asked what Fortune Brands thinks about the long-term future of luxury products for the home and the channels that sell and distribute them. “The addition of Riobel and the acquisition of ROHL and Perrin and Rowe into our newly created Global Plumbing Group are the first important steps we are taking to create a multi-brand channel and geography plumbing business that has tremendous potential for growth,” he stated.
“ROHL, Riobel and Perrin and Rowe will benefit from the strong backing of Future Brands while maintaining separate management teams, relationships, offices and other assets that have made each brand special and unique. For example, ROHL will continue to be sold in the same kitchen and bath showrooms it is today – not in home centers such as Lowes and Home Depot. Retaining each brand’s identity and equity is critical to its continued success and we are committed to doing so.”
What does this mean to all you showrooms out there that have invested time, energy and money into helping grow ROHL and Perrin and Rowe into one of the best-recognized names in the industry? My take is that it will be business as usual — except with the added strength Fortune Brands brings to the table. I seriously doubt Fortune Brands would be taking this giant step if they had any doubts about the future of the DPH showroom business.
So why sell?
Needless to say, I was curious why and how the Rohl family arrived at the decision to sell, especially with Ken’s three sons in management positions and still having a number of years left before joining Ken in retirement. This prompted me to ask Lou Rohl, CEO of ROHL, a few questions concerning the acquisition.
Hank: Why did your family make the decision to sell to Fortune Brands?
Lou: As we have evolved we have continued to seek ways we can strategically grow our business — including being open to new approaches and relationships with our customer partners, manufacturing sources and industry members. As part of this philosophy we accepted a meeting with the Fortune Brands strategic planning group. During the initial discussion it became apparent that a greater opportunity existed for the ROHL brand by allowing us to enter new markets and benefit from the resources of a multi-billion-dollar company.
Hank: What advantages do you see Fortune Brands bringing to your company?
Lou: Immediate term, providing access to market channels that we currently do not have participation in such as hospitality and new-home construction. Longer-term, it would be a focus on the greater North American market and opportunities in the rest of the world.
Hank: What do you see as the future for higher-end plumbing products, and the brick-and-mortar stores that sell them?”
Lou: Today’s luxury consumer is ready for someone to help them understand the true value and the experience one gets with authentically crafted faucet and fixture products. In a world of mass production, mass marketed through an unimaginable amount of retailers – affluent consumers want to touch and feel product in a hands-on environment with a trained expert available to them; someone who can walk them through a very technical and sometimes confusing process.
Finally, I had to call my friend, Ken Rohl, back and get his feelings on this acquisition. First, I asked how he felt after working hard these past 33 years growing one of our industry’s most recognized brands. He said that “only in America could you have the dream of starting your own business and putting that vision into practice. From selling faucets out of my car to growing an enterprise that operates globally and markets products coast to coast certainly fulfills that dream.” Further he said he feels “very satisfied, rewarded, recognized and thrilled for both the Rohl family and their team of employees.”
Ken feels “honored to be handing an extremely well-oiled machine over to a very strong partner that will help perpetuate and grow the good name and company,” that he, his sons and the great ROHL employees have worked so hard to build.
A couple takeaways here. Anyone in America can have a dream. And by combining smart work with hard work, and possibly a bit of luck, you can fulfil that dream. Secondly, the marriage between ROHL and Fortune Brands bodes very well for the future of luxury plumbing products and the brick-and-mortar stores that sell them.