Steve Halsell, reluctant entrepreneur, finds himself lapping all the way to the bank
Three years ago Steve Halsell was a supervisor on the night shift at Continental General Tire. Today he owns the largest independent distributor of die-cast NASCAR collectibles.
NASCAR--the National Association for Stock Car Auto Racing--is the official organization of the country's fastest-growing spectator sport. Last year it boasted regular-season TV ratings second only to those of the NFL. In days gone by, "stock" cars were true to their name--right off the assembly line. Today, however, the Pontiacs, Chevys, and Fords screaming down the Daytona International Speedway are custom-built. While few of the handcrafted race cars remain intact for long, they live on as die-cast collectibles--scaled replicas from 3 inches to 26 inches long. In addition to precision workmanship, price distinguishes these limited-edition collectibles from toys. Retail prices typically range from $10 to $85, but bidding on top models can push the ante to $1,000 and above.
Sales of die-cast racing replicas are running close to $500 million a year, and one company, Phoenix-based Action Performance Cos., dominates the field. Action is number one both in collectibles and in the market as a whole, and its top distributor is Twin Hills Collectables (#32), the company based in Mayfield, Ky., that Steve Halsell founded in 1993.
It all had started on a sweltering midsummer afternoon, when Halsell's coworker showed off his latest finds--NASCAR replicas featuring "Handsome Harry" Gant--from a hobby shop in town. Standing in the parking lot at the tire factory where he had worked for 17 years, Halsell marveled at the race cars' one-to-24-scale detail.
He was hooked. "The next morning at 9 o'clock, we met at that hobby shop, and I started buying," Halsell recalls. His first purchase was the Jeff Gordon Baby Ruth Hauler, a tractor trailer in one-to-64 scale. His second, just to be evenhanded, was a Dale Earnhardt hauler. (Jeff Gordon, with his polite manner and clean-cut good looks--not to mention three Winston Cup titles--is NASCAR's mediagenic crown prince. Earnhardt, "the Intimidator," is a seven-time Winston Cup champion, whose paint-trading, bumper-rubbing style recalls NASCAR's roots.)
Soon Halsell began to call collectibles companies, asking to buy half a dozen models for his own collection and to sell to friends. Debbie Houde, one of Action Performance's first customer-service representatives, had another idea: how would he like to distribute the start-up company's entire line? She made him the standard offer: distributors had to buy three master cases of every model the company produced. Halsell's reaction? "It scared me to death." As Houde recalls, "Steve was kind of doing the hesitation waltz." The two talked every couple of days for about three weeks. Finally Halsell said, "The only way I can do it is if you lower the minimum to one case." Houde agreed, and Twin Hills Collectables was born.
Twin Hills remained a hobby for the first two years, with Halsell working the midnight shift at Continental. In his spare time, he visited trade shows, combed the yellow pages for dealers, and sent prospects a newsletter every two to three weeks. But it was an uphill climb.
Action was an unknown at the time. Its big break came in early 1994, when it won a license to produce die-cast replicas of Dale Earnhardt's #3 GM Goodwrench and #3 Wrangler cars. Licenses with ace drivers Jeff Gordon and Rusty Wallace followed, and Action's business--and that of its distributors--took off. After chalking up $8,000 in sales in 1993, Twin Hills posted $212,000 in 1994 and passed the half-million-dollar mark in 1995. Explaining how his hobby finally became a job in 1997, Halsell says, "My manager told me I was losing money by going to work."
Mary Kwak is a freelance writer based in Cambridge, Mass.