The Indispensable Man

Tweet

There was more that Farm House didn't know about, and it would nearly destroy the company. In June 1985, Farm House discovered that Casablanca's $11 million in inventory was overstated by about $3 million. Casablanca posted a loss of $2.5 million. "That was the straw that broke Max's back," says Fisher. Fisher had long felt that Casablanca needed Burton, but Burton was "tremendously loyal to Max." Still, Burton couldn't bear to see his company drilled into the concrete. "You want to see the company well managed after you've gone," he explains. "Besides, the fun and relaxation, for me, comes from running the company, not from spending money and being a big shot." In July 1985, at Fisher's request, Burton agreed to replace Van Dordrecht.

Burton returned to face not only unfamiliar people, but also new pressures. Casablanca was now a public company with heavy burdens; Farm House was counting on Casablanca's earnings to pay back about $14 million in bank debt. The market was crowded too. "We're going to return to doing some of the things that got us here," Burton assured the employees.

That meant returning to Burton's ways. To reinforce the idea that change was at hand, Burton had walls moved around. He issued buttons that read "No Surprises" -- a reference to the inventory blunder. Taking a lesson from his job-shop days, he initiated regular financial updates, "Tuesday Reports," and ordered the factory closed for an audit every 90 days. To give himself a stake in the outcome, he bought back a small percentage of the company.

Burton also hired back some former employees. He brought on new managers, again relying on his own unusual criteria. Before signing on as general manager, Rand Clark had been vice-president and general manager of the Sands Hotel in Las Vegas and president of a real-estate company. He knew nothing about manufacturing. But Burton had bought a condominium from him in 1983. He was impressed by the quality of workmanship, and by Clark's ability to get things done -- as he demonstrated when Burton asked him to add a loft bedroom within three months.

To pump up the 28 sales reps and 960 dealers, Burton spent about $25,000 replacing Casablanca's dealer catalogs with simulated leather loose-leaf catalogs. Casablanca also produced a bound version for consumers at a cost of $225,000. "The message was 'Burton's back," says Pondant. "The dealers associate him with anything that is new and good." And Casablanca went into the entertainment business again. The first sales meeting after Burton's return was staged like a Broadway show, complete with a playbill and such songs as "There's No Business Like Fan Business." The dealers hooted and hollered. There were new products too; Casablanca introduced some new colors and a line of art deco-style fans. "It was the old Casablanca again," says Pondant. To build word of mouth among consumers, Burton decided Casablanca would give away a free clock to anybody who bought three or more fans. Enclosed with the clock is a letter from Burton and a $1 bill to pay for batteries. "It is critical that the consumer go out and say nice things about the company," says Burton.

The numbers say good things about Burton. In his first year back, earnings from continuing operations rose to more than $2 million, from $306,000 the year before. Casablanca's stock, which had hit a low of 3 5/8 in 1985, settled in at around 6. "He doesn't do what anybody else would think of doing," says Jack Wilson, a senior vice-president of Paine Webber Inc. "He'll have that company humming in another year."

It won't be a carefree tune, though. Burton's repeat success may just go to prove that he has created a company that only he can run. "It's obvious that it is not just luck, since he has done it twice," says Frampton, who now runs his own company. Nearly 15 years after its start, Casablanca is still very much the product of a singular vision. "He is, and always will be, the guiding light behind the whole operation," says Kirby. "Without him, there is no operation."

Burton has filtered his own interests and eccentricities through Casablanca. Why use trains to promote ceiling fans? Why hire a plant manager with no manufacturing experience? Burton's motivations are often personal and usually quite mysterious. It's impossible to put a pencil to everything he does. "I don't try to question some of the things he wants to do," says Jerry C. Holland, vice-president and chief financial officer. "I just know that generally they will work out all right."

But Burton and his company are inextricably linked. He is, in effect, a prisoner of the role he initially carved out for himself. Without him, even the most basic underpinnings of Casablanca's strategy are called into question. "It's hard to say whether Casablanca could continue to ask the price that it does without Burton," says Frampton. Anyone who succeeds him will surely have trouble figuring out how to market the high-priced fans. They won't be able to create value the way he does. "There are not many Burtons around," offers Van Dordrecht. Without the original, Casablanca could become just another fan company.

Or maybe not much of a fan company at all. Casablanca is pinning many of its hopes on its lighting division. It already owns a middle-market lighting company and, earlier this year, launched Casablanca Lighting Co. to import pricey European fixtures. S. John Gorman, who came to Casablanca via an acquisition, heads the division. Around Casablanca, they have a nickname for him that probably is impossible in its expectations.

They call him Gorman Gorman.

 PREV  1 | 2 | 3 | 4 | 5