Doin' it right: The Sale of Allwest Furnishings: Hicks on Biz originally published Edmonton Sun, May 11, 2013
The cycle is depressing, and usually inevitable.
A local entrepreneur starts a company. Defying the odds, the founder builds it to a decent size with excellent employees and service, plus competitive pricing.
The founder decides to sell. A national or international chain has the best offer. The founder rides off into the sunset. Said national chain moves in, re-brands and strips the once-local company down to nothing more than a sales force, inventory and a weekly flyer. Edmonton loses creative energy, brainpower and wealth. Profits don’t stay in town.
The sale of Edmonton’s Allwest Commercial Furnishings Ltd. has been the polar opposite of that norm.
Founder George Smith built his company from nothing, treating customers and staff with dignity and respect. When it came time for him to sell, he insisted on waiting for the right buyer to build on, not destroy, the Allwest legacy.
On entering the Allwest showroom near the TELUS World of Science, something is different. It’s a beautiful open space in a beautiful, open building. The air is clean, fresh and crisp. Natural light pours into a meeting room made available to community groups at no charge. All the exterior walls are made of glass.
Allwest’s showroom and offices are built to LEED Gold environmental standards. It’s one of seven such certified buildings in Edmonton.
Which tells you much about past owner and on-going CEO Smith, the most forward thinking 79-year-old you’ll ever meet.
“My wife and I travelled to China in 2006,” he says. “The smog in the big cities was terrible. I figured I owed it to my society and my family to do my part. As Allwest was about to renovate, we decided to go for LEEDS gold certification. It cost about 10% more. But in return we have this beautiful, clean building.”
From a one-man company, Smith built Allwest Commercial Furnishings into northern Alberta’s largest office furnishing supplier, with 75 loyal employees.
But George had a problem. He was in excellent health, but he was no spring chicken. His children were not interested in the business. He needed a successor. “I wanted to make sure the company would continue on a successful, meaningful path.”
George had several serious offers. Allwest is a solid business. But he wasn’t interested in abandoning that which he had built. “To change the Allwest culture would be to destroy the company,” he says flatly.
With a sale on his terms looking unlikely, George brought in local industry veteran Lorne Wight as Allwest’s president, while Smith continued as CEO. “Our goal was to create a succession plan,” says George. “With Lorne as president, we could offer a purchaser a complete management team. Or Lorne could execute an employee buyout. Or we could carry on with Lorne bringing a fresh perspective.”
No sooner had that decision been made, when fate intervened.
Colin Eicher is another George Smith. Eicher started oilfield information company June Warren-Nickle’s Energy Group from scratch. When he sold to Glacier Media Inc. in 2008, he did not need to work again.
But the community booster was getting the itch. He’d been quietly looking for a business to purchase, a local business with a strong management team. He wanted to be the owner, not the driver.
When he found out Allwest was for sale, he called George. It was a meeting of minds. The deal was settled after two or three meetings. No lawyers, no accountants, just two guys whose handshake means the deal is done.
“Part of the agreement was George had to stay as CEO for at least one year,” says Colin, “and I hope for as long as he wants”
A year later, Eicher could not be more pleased. “Allwest’s performance has exceeded all our initial targets. We’re making some changes of course – George is a brilliant businessman who kept all the numbers in his head. Lorne and I need performance measurements. From what I can tell, the staff is happy, our customers are happy.”
Land has been acquired for an Allwest expansion. “It’s a really good company,” says Eicher. “And now we want to make it a whole lot better. And if I could find another set-up like this, I’d buy that company too!”
What makes Allwest competitive? For that story, go to www.hicksbiz.com.
Five manufacturers dominate the North American office furniture market, four American, one Canadian.
Allwest Commercial Furnishings is the exclusive regional distributor for Toronto-based Teknion.
Alberta’s share of $10 billion North American market, $250 million.
Alberta has three furniture/interior walls manufacturing plants, all in Calgary.
Average rate of return in Canadian office furniture retail market, 3% to 4% a year.
780 707 6379