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Scott Campbell makes room for unexpected opportunities

May 1st, 2010 / By: / Feature, Management, Tents

Scott Campbell’s acquisitions span market segments and expand profits.

“It was not my plan to diversify and grow this company—my plan was to work in this company for about five years and then return to the seafood industry. But that didn’t happen,” says Scott Campbell, owner and president of Rainier Industries, Tukwila, Wash. “That didn’t happen at all.”

In fact, acquisitions have never been a part of Campbell’s approach to growing Rainier, which manufactures innovative fabric and display products—although the company is known for making the most of opportunities by acquiring other companies. “A lot of this [growth] just sort of happens,” Campbell says. “We’re always looking for growth opportunities, which are particularly important for a seasonal business needing to boost winter sales.”

Growth and risk

In 1984, after working in the seafood industry for nine years, Campbell purchased what is now Rainier Industries. The company was strong and stable but had only 11 employees, and its products were limited to traditional tent and awning products. Now the company has 160 employees, an expanded product line, and has acquired 17 businesses in a variety of market segments. “After I purchased Rainier I started being aggressive and the company started growing,” he says. “Within two to three months of my taking over, I probably added six employees.”

Two years after increasing the company’s workforce, Campbell had the opportunity to lead Rainier in its first acquisition—Seattle Tent and Awning. “We weren’t all that interested in buying the company, but the owner came to us and was just so anxious to get out of the business,” Campbell says. The result was that Rainier was able to acquire the awning company at very low initial cost and little risk. “The purchase was based mostly on some future cash flow,” he says. “It was a very clean deal and it established a template for how we would do future acquisitions.”

Rules of the game

That template most often, but not always, includes hiring the employees of the acquired company. “In most of our acquisitions, we’re looking for the employees—that’s part of the acquisition,” Campbell says. “But there have been a couple we’ve done where we’ve hired no one. We were just acquiring a customer list or a product.”

For the times when Rainier was breaking into a new market segment through acquisition, hiring the acquired company’s employees—with expertise in that market—contributed to the success of the transition. The first of such acquisitions took place in 1994 when Rainier purchased Olympic Sign—a move that provided Rainier with a foothold in the sign and graphics market. “That was when we first expanded into the graphics market,” Campbell says. “It’s a market that continues to grow and overshadow our traditional products.”

The graphics market currently makes up approximately 50 percent of Rainier’s business, thanks in part to an acquisition by Campbell in 2003. The acquisition of Display Products provided Rainier with color management skills it hadn’t had up to that point, as well as two sizeable accounts. “Prior to that we were sort of on the fringe [in the graphics market],” Campbell says. “At that point we became contenders.”

Though Campbell deems that most of the company’s acquisitions were successful, there have been a couple that have not panned out so well. Campbell sees a clear correlation between the health of the acquired business and the value of the acquisition. “The companies we’ve acquired that were shaky have been poor acquisitions, and the companies we’ve acquired that were strong have been good acquisitions,” he says. “There’s a lesson there.”

Product development

Campbell also puts an emphasis on product development as a way to strengthen his company. And much like his approach to acquisitions, he relies on recognizing opportunities that present themselves and acting on them, with a willingness to take a calculated risk. “A lot of our product growth comes from customers who want something unusual and it evolves into a product or product line,” he says. Some of the many such product lines for the company are its globes and news sets.

The backlit, rotating globes, which vary in size from 3 to 50 feet and are digitally printed with NASA imagery, evolved out of a request from one of Campbell’s old high school buddies, Eric Morris, to design and manufacture beach balls made in the form of globes. “He has since sold millions of these beach balls, which Rainier still manufactures for him,” Campbell says. “But soon after we helped Eric develop the beach balls we got to thinking—let’s try and make some larger globes.”

The news sets that Rainier offers as a product line also began with a customer request—to help design and build (not surprisingly) a news set. Since then, the company has completed a considerable number of news sets and backdrops, the most notable being one its team designed for the 2010 Winter Olympics—the “Kiss and Cry” set that was the backdrop for figure skaters anxiously awaiting their scores.

Still, even for a successful company like Rainier, led by a man with an eye for opportunity like Campbell, the harsh economic realities of the day have been a challenge. “I’m very concerned about regulatory issues,” he says. “The United States is not friendly to manufacturing right now. The business environment is such that it makes [manufacturers] look at moving elsewhere.”

Regardless of the challenges—whether they be the everyday obstacles of running a company or the larger issues of taxation and regulation—Campbell draws on the lessons he learned while working in the seafood industry. “I have enormous patience,” he says. “Some of that goes back to working in Alaska where you have the inability to get things you need because of the location, or the inability to terminate problematic employees because you’re in a remote location and it may take a week to get an airplane to fly that person home. You just learn to deal with the problems at hand.”

And make the most of the opportunities.

Sigrid Tornquist is a freelance author and editor based in St. Paul, Minn. She is also the associate editor of InTents magazine.

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