Leonard Florence grew up in Chelsea, Massachusetts. He graduated from
Boston University in 1954. He was hired by Dewey Stone (who paid for
his college education) to help run one of his companies, Raimond Silver
Manufacturing Co. of Chelsea, Mass. which at the time was losing money.
Florence did a great job there and when the company was sold in 1968
for $2.1 million, Florence received half the proceeds. He used the
money to start his own company, Leonard Silver, which specialized in
low-priced silverplated giftware. Company sales came to $269,000 in its
initial year and profits to $14,000.
Leonard Silver first operated out of a Chelsea garage, with the entire
staff pitching in to do chores: writing orders, polishing silver, and
carrying boxes to be shipped. When the company erected an office
building across the street, the staff helped pour concrete, thereby
enabling Florence to fulfill his promise to teach his employees the
business from the ground up. Leonard Silver sold silverplated holloware
at one-half to one-third the prices charged for similar goods by
competing firms and still made money. In 1979 Leonard Silver merged
with Towle Manufacturing Co.
Towel became part of International Silver in 1990
Unlike plebeian Leonard Silver, Towle (rhymes with 'bowl'), had a
pedigree going back to 1690, when William Moulton II set up shop in
what became Newburyport, Massachusetts. Five generations of Moulton
silversmiths followed before Anthony F. Towle and William P. Jones,
apprentices of William Moulton IV, bought the business from him and
Joseph Moulton IV in the 1860s. It was incorporated in 1880 as the
Towle Manufacturing Co. The conservatively managed company was the one
of the first to stress coordinated marketing of silver, china, and
glass, and it made a steady profit even during the Great Depression.
Although not reaching an annual net income of $1 million until the
1960s, it paid a dividend in every year after 1917. Towle's silver
patterns included Chippendale, King Richard, and Old Master. As late as
the 1970s its showroom was a 250-year-old Newburyport clapboard house,
adjacent to the ivy-covered factory.
A survey of the $620 million tableware industry in 1970 found Towle to
be one of the eight leading marketers. Among the others were
International Silver Co. and Wallace Silversmiths Inc., later acquired
by Syratech. By then Towle had been systematically diversifying its
line of products from sterling (92.5 percent silver) flatware to
silverplated (about ten percent silver) holloware in order to reduce
its exposure to the fluctuating price of silver. Silverplated
holloware, the fastest-growing area in silverware, was believed to
account for around 40 percent of Towle's estimated sales in 1971. The
company also was selling over 20 basic sterling flatware patterns under
the Towle name through 3,000 retail outlets. It recorded after-tax
profits of 9 to 10.5 percent of sales between 1966 and 1970.
Towle's solid performance and lack of long-term debt attracted a
takeover attempt in 1974 from Nortek Inc., a diversified company only
seven years old. In response, more than 800 residents in the
Newburyport area signed an advertisement in the local newspaper
expressing concern that Towle might move out if purchased by Nortek.
Towle executives, who called their company the oldest in America doing
business in the same place, voiced gratitude to their shareholders when
Nortek's bid failed. The company's days as an independent entity were
to prove numbered, however.
Leonard Silver, with sales of $38.7 million and earnings of about $2
million in 1977, claimed to be the nation's leading manufacturer of
silverplated holloware when it took aim at Towle the following year. By
contrast, Towle was the nation's second-largest manufacturer of
sterling silver, its sterling flatware accounting for 80 percent of its
sales volume of $35 million in 1977. According to Florence, he
engineered a reverse takeover by threatening to make a tender offer to
Towle's shareholders. In September 1978 Towle acquired Leonard Silver
by issuing stock with a combined value of nearly $13.4 million. Leonard
Silver stockholders received a share of Towle stock for each Leonard
Silver share they held. Since Florence owned 40 percent of Leonard
Silver, he emerged as Towle's largest stockholder and in essence
elected himself Towle's president and chief executive officer.
The merger brought Florence the prestige of the Towle name, sterling
flatware to fill in the high end of his line, and cash for his heavily
indebted former company, now a Towle division. He immediately moved
corporate headquarters to East Boston and redefined Towle by broadening
its clientele. He made price, for the first time, a major consideration
in selling the company's silverware, and only items that lent
themselves to mass merchandising remained in production. To reduce
overhead, salaried salespeople replaced jobbers, and silverplate was
promoted through mail-order catalogues. Unlike sterling silver,
silverplated holloware was recession-proof. Florence told a Forbes
reporter in 1981, No one's going to tell a bride, 'I can't give you a
gift, there's a recession on. Come back next year.' His oft-pronounced
motto was, Today Mrs. Jones wants to live like Mrs. Rockefeller, to
which he added, And I intend to let her think she can.
Florence not only introduced silverplated flatware under the Towle
name, he also moved the company into china, glassware, stainless-steel
flatware, dinnerware, barware, brass furnishings, pots and pans,
ceramic gifts--even candles and silk flowers--by acquisition. In the
following years Towle bought 14 companies. Nearly half of Towle's sales
volume of about $200 million in 1980 came from nonsilver items. In 1981
a new 578,000-square-foot Towle automated distribution plant opened in
Towle's old-line Yankee competitors accused Florence of cheapening the
silverware industry through his sales promotions--many of which they
subsequently imitated--and, they claimed, shoddy workmanship. He
outraged them by his willingness to cut prices in order to bolster
market share and by copying their designs. Dubbed the King of Kitsch,
he flaunted his parvenu trappings, which included four homes, a
Rolls-Royce, Mercedes, and Jaguar, multiple gold chains, and a
diamond-studded bracelet and Rolex gold watch. Florence compensated for
these indulgences by habitually working seven days a week, spending
nine months out of the year on the road, and sleeping, by his own
account, only four hours a night. A New York department store executive
told a trade-newspaper reporter, Lenny Florence is successful because
he has the ability to change with the times. The rest of the silver
industry has been asleep for 100 years.
By 1980 Towle was the largest tabletop and giftware concern in the
United States and the largest producer of silverware. It was selling
7,000 items, ranging from sterling silver tea sets commanding up to
$10,000 to $20 vinyl ice buckets and $15 Muppet figurines and
Kliban-cat clay coffee mugs. By 1984 Towle was selling 35,000 different
By late 1982, however, Towle was so heavily in debt that it had to sell
750,000 shares of newly issued common stock to a conglomerate, Anchor
Hocking Corp., for $16.9 million in cash. Despite record sales of $285
million in 1983, earnings dropped sharply in 1982 and 1983, and in 1984
Towle lost $15.6 million. The problem stemmed partly from consolidating
shipping operations in its state-of-the-art Revere facility. The
computer system, unable to handle Towle's volume, broke down, and
delays left the company unable to fill Christmas orders. More
generally, analysts said, Towle emphasized growth without a
corresponding attempt to integrate its acquisitions into the parent
company. As a result, one retailer told a Boston Globe reporter, We're
constantly confused about prices, programs, and deliveries.
Towle's board of directors forced Florence to resign in November 1985.
It lost $67 million in 1985, and its debt reached $142 million. Paul J.
Dunphy, the company treasurer and a former Arthur Hocking executive,
succeeded Florence as president and chief executive officer. Towle
filed for protection from its creditors under Chapter 11 of the federal
bankruptcy code in March 1986. Its stock dropped in value to $3.25 a
share, compared to a high of more than $31 a share in 1983.
Under Dunphy, Towle consolidated into three business divisions and
began divesting itself of unprofitable operations. Its school-ring
division, Old Harbor Candles affiliate, Deldan silk flowers unit, and
Christmas Place ornaments lines were sold. Its brass furniture company
was liquidated. Its practice of deep discounting was ended. The company
lost $22 million in 1986, but the following year it became a subsidiary
of First Republic Corp. of New York and emerged from bankruptcy.
However, Towle again filed for Chapter 11 bankruptcy in 1989,
acknowledging that its plan for anticipated rather aggressive growth
had not materialized.
Florence, who with other family members still owned at least 12 percent
of Towle at the time of his resignation, had raised $5 million and
started a new company, Syratech. It bought money-losing Wallace
International Silversmiths from Katy Industries Inc. in September 1986.
Wallace Silversmiths Inc. and International Silver Co. had been merged
into a single unit in 1983. The former company derived from Robert
Wallace, who manufactured the first spoons made in the United States of
German or nickel silver in 1835. Founded in 1898, International Silver
Co. was at one time the world's largest manufacturer of silverware.
Syratech also bought Syroco, an unprofitable plastic-injection molding
company that made decorative trim, in 1986. Florence moved it into
plastic-resin patio furniture. Both units were profitable within a
year. Acquiring Syroco enabled Syratech to keep its employees busy
year-round, since outdoor furniture sold best in the spring while
tableware sold best in the fall. In 1993 Business Week cited Syratech
as one of 250 companies on the move, and Forbes called it one of the
best small companies in America.
Florence reacquired four Towle units--Towle Canada, Towle Hong Kong,
Towle Retail, and the Silversmiths division--in July 1990 for $20
million and merged them into Syratech. He told a Forbes interviewer in
1995, In my humble opinion, Towle would not have gone into bankruptcy
if they had let us stay the course.... I was let go wrongly, and I had
to go out and prove it. At the beginning of 1993 Syratech went public,
offering 2.2 million shares of common stock (about a quarter of the
total) at an initial $17 per share. This stock issue raised $39
million. By then Syratech consisted of frame and gift companies as well
as tableware and furniture and accessories. Of $127.7 million in sales
in 1991, tableware and giftware accounted for 65 percent, furniture and
accessories for 35 percent. In 1993 sales reached $210 million, and
profits were nearly $18 million.
In 1995 Syratech sold Syroco to Marley plc, a British company, for $140
million. Syratech's sales had grown in 1994 to $242.2 million, of which
Syroco accounted for 39 percent. Net income came to $19.9 million.
Florence had a 28 percent stake in the company in 1994, while Katy
Industries owned 29 percent. Long-term debt was only $2.3 million.
In 1995 Syratech was designing, manufacturing, importing, and
distributing a variety of tabletop and giftware products, including
sterling silver, silverplated, and stainless steel flatware and
holloware, and seasonal items. Holloware and giftware items sold by the
company included trays, coffee and tea services, goblets, pitchers,
candlesticks and candelabra, picture frames, cosmetic accessories,
vanity pieces, and Christmas and other seasonal merchandise.
Syratech was manufacturing sterling silver flatware in San German,
Puerto Rico, in 1995, and was also fabricating silver there. Sterling
silver and silverplated giftware products, including holloware, were
being manufactured in North Dighton, Massachusetts. (The Newburyport
plant was closed in 1994.) Products were also being purchased from
about 160 foreign manufacturers. The company had warehouses in China,
North Dighton, East Boston, and Kansas City, Missouri, and
warehouse/distribution centers in Revere, Massachusetts, and Corona,
California. There were showrooms in New York City, Los Angeles, Dallas,
Atlanta, East Boston, and Hong Kong.
Syratech was selling its sterling silver and silverplated flatware and
holloware under a number of trade names, including Tuttle, Wm. Rogers
and Son, Leonard, Supreme Cutlery, Westmoreland, Melannco,
International Christmas, and Holiday Workshops, as well as Towle,
Wallace Silversmiths, and International. Its proprietary patterns and
designs included King Richard and Old Master in the Towle line, Grand
Baroque and French Regency in the Wallace line, Joan of Arc and Royal
Danish in the International line, and Onslow in the Tuttle line.
Principal Subsidiaries: International Silver Co.; Leonard Florence
(Leonard) Associates, Inc.; Syratech H.K. (Hong Kong); Syratech Holding
Corp.; Syratech Silver Sales Corp.; Towle Holloware, Inc.; Towle
Manufacturing Co.; Wallace International Silversmiths, Inc.