By Eric Peterson | Feb 10, 2015
Fort Collins, Colorado
125 in Colorado
Fort Collins, Colorado
Employees: 210 total; 125 in Colorado
President and CEO Steve Anderson is making inroads for the stalwart supplier of retail welding and metalworking gear in the industrial market.
James Donovan Forney started selling soldering irons door to door during the Great Depression, then invented the first 110-volt welders designed for use outside of the industrial setting. That defined the company's evolution into a retail distributor of metalworking equipment.
More than 75 years later, the company has come full circle and is expanding from distribution into exclusively into retail into industrial. "Our world is changing," says Anderson, J.D. Forney's grandson. "We're primarily retail but we're moving into the industrial market a little bit. Our product line is really a more industrial line. The thing that works well for us is it really plays well for both sides."
After nearly three years of research, planning, and "getting our toes wet," Anderson says Forney's industrial push started in 2014, and the sector now represents about 5 percent of the company's business.
The move helped drive growth for the bottom line. "We had a pretty good year," says Anderson, citing a 10 percent uptick in revenue. Anderson cites the strength of "the overall economy" as the primary catalyst, as the company's market ranges from oil and gas to construction on the industrial side and Ace Hardware to Amazon at retail.
The broad manufacturing comeback has been strategically serendipitous, Anderson notes. "We're lucky it did take that turn when it did."
The move into industrial means that Forney needs to have deeper inventory of the more esoteric equipment in its 5,000-SKU catalog. Rather than 20 percent of flagship products adding up to 80 percent of sales, there's a more level demand from industrial customers. "They have a broader need," says Anderson. "The industrial market wants everything."
While oil and gas is a primary target, Anderson does not see the recent decline in oil prices as a big impediment. "We feel the oil industry, especially in Colorado, is booming," he says. "We just play at the perimeter of the market and we're taking really focused steps."
About 40 percent of the Forney catalog is made overseas, and the remainder is domestic. "What we try to do is create a balance," says Anderson, citing price sensitivity at retail as a prime factor behind imports. "We really have to watch our prices."
The company is currently in the process of selling its 30-acre campus. Anderson says the company will relocate to a new headquarters in Fort Collins.
Challenges: Brand recognition in target industrial markets. "We're the new guy on the block," says Anderson. He adds a disclaimer: "We've been around for 85 years. People know our name."
Finding distribution facilities is another challenge. "There literally is no warehouse space in Colorado," says Anderson. "The price of new construction is edging up to $185 to $200 a square foot. Five years ago, I could have built for $60 a square foot." The trend has led Forney to recently double its warehouse space in Ohio, but it could use more space in Colorado, he adds. "We're wall to wall, floor to ceiling."
Opportunities: Beyond the potential in industrial markets, Anderson points to international opportunities. "We've begun going across the borders," he says.
Needs: Workforce. "We need more people who have manufacturing knowledge," says Anderson. "Today we're struggling to get those people trained. Once we get them trained, manufacturers want them."
The Great Recession "left a huge void," he adds. "People are just starting to get back into [manufacturing] so there's a lot of retraining."