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Belknap Hardware was a regional hardware wholesaler founded in 1840 that celebrated 126 years of business. In the 1980s, under new President Perry Barton, Belknap began a period of cautious expansion through acquisitions but struggled with high costs and declining profits. In 1983, Belknap was acquired by David Jones but continued facing financial difficulties. A new president was unable to turn things around and Belknap ultimately filed for bankruptcy in 1986.

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Praveen Mayar
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21 views

Case

Belknap Hardware was a regional hardware wholesaler founded in 1840 that celebrated 126 years of business. In the 1980s, under new President Perry Barton, Belknap began a period of cautious expansion through acquisitions but struggled with high costs and declining profits. In 1983, Belknap was acquired by David Jones but continued facing financial difficulties. A new president was unable to turn things around and Belknap ultimately filed for bankruptcy in 1986.

Uploaded by

Praveen Mayar
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ë Founded in 1840.

ë Celebrating 126 years of business with sales of $57.3mn.

ë Tradition minded organization.

ë By 1983 Belknap hardware tripled its sale to $170mn.

ë Remained regional wholeseller.




ë  erry barton as a president.

ë Evaluation and reorganization of the company.

ë In 1980,Belknap began a cautious expansion through the acquisition


of small,regional hardware wholesalers.

ë Barton trimmed trimmed overhead costs by eliminating head office


changes,tightened inventory controls and planned a new Louisville
distribution facility.

ë Established first marketing department in 1980.


ë Belknap achieved a 92 percent stock fill rate,while turning its inventory some 3.6
times per year

ë ÷uring 1983,the board of directors received three serious offers to purchase all the
outstanding stock of belknap.

ë ÷avid jones acquired control of belknap for $35bn.

ë Barton was replaced as president by Frank lambert in 1984.

ë Lambert planned extensive expansion through acquisition,cost cutting and


improved customer service.

ë In early 1985 firm brought online three distribution centres; Charlotte,dallas and
new facility outside Louisville.

ë In 1985 Belknap layoffs about 300 employees.

ë In late 1985 they closed three of the firms distribution centres.

ë On feb 4,1986,Belknap filed for bankruptcy.


!"# #$%
ë Aales were steadily rising,but profits were being squeezed.
ë In 1970,Belknap was plagued by high operating costs,low profit
margins and a steady decline in market share.
ë Belknap offer its retailers some 50,000A s-more than double of its
competitor.
ë nexpected death of president(Charles brewer) in 1979.
ë  erry Barton expansion plan were not seen as consistent.
ë Erosion of the confidence in the barton management team.
ë New president frank lambert who had no direct experience in whole
selling or retailing of any kind.
ë Aales didnt increase appreciabely,but the investment required to
support those sales had increased dramatically.
ë Belknap ignored competitive forces of the cooperatives and mass
merchandisers.
ë Firms trade credit was exhausted.
ë On feb 4,1986,Belknap filed for bankruptcy.

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