Zippo in the News
The Zippo Company has made it a goal to spread out into other fields of business and manufacture more nonsmoking products. Specifically, Zippo plans to revise its product line to be 50 percent nonsmoking related by the year 2010, which would truly be a remarkable feat. What has brought about this change? Now a day, the negative effects of smoking have brought about a string of anti-smoking legislation and social change – Zippo is catering to that trend.
Some of Zippo’s nonsmoking products are knives and Italian made purses and briefcases. However, with Zippo’s 75th anniversary just around the corner, the company has decided to start a new line of multipurpose lighters that can be used for purposes other than smoking. For example, these new lighters would be used for outdoor activities, fireplaces, and barbeque grills.
Greg Booth, Zippo’s president and CEO, assures that this new business tactic will revive the company’s success and make up for the setbacks that Zippo has experienced from the recently stringent airport security policies, anti-smoking legislation, and widespread sale of knockoffs.
In a recent phone interview, President and CEO Greg Booth said that “Our corporate plan is to diversify…” Thereafter, Booth specifically identified the company’s objective and explained, “We’ll continue to do what we do best: manufacture items that generate flame. But we’ll add and diversify with products that are nonsmoking related.”
The Zippo lighter was discovered by founder George Blaisdell in 1932. Blaisdell set out to design a lighter that would be unaffected by the wind or any other outdoor influences; and thus he ended up with the current rectangular shaped lighter with its signature hinged lid. Since then, Zippo lighters have starred in Hollywood films, adorned U.S. soldiers during war, and sparked collector’s clubs worldwide. Additionally, Zippos are always sold with a lifetime guarantee.
Each year, the Blaisdell Family run Zippo Company earns around $140 million for its lighters, $40 million for its knives labeled as the W.R. Case & Sons Cutlery Co., and $10 million for its fashion accessories by Zippo Fashion Italia.
Although each sector of the company has been doing well, Booth has mentioned that it has had its fair share of challenges.
Since the September 11th terrorist attacks, more stringent airport security policies have been put into place and have interfered with the desire of tourists and shoppers who would usually purchase Zippo lighters as gifts, thus hurting Zippo’s business.
As a result, Zippo was forced to cut around 50 jobs and experienced a net loss between $4 million and $5 million a year, due to airport security policies. Booth described the dire situation, “Purchases like that came to a screeching halt. That’s a tough hit in terms of dollars and the community and overall economy of the region.” There are about 760 employees situated at the Bradford facilities.
By August, the Transportation Security Administration had decided to lessen the severity of the security policies. Passengers were now allowed to take their lighters onto the plane and pack empty lighters in their luggage. In addition, a traveler could take two lighters with fuel if he/she had government verification.
The Zippo Company is currently trying to inform the public about these new security renovations, an attempt to bring back Zippo’s financial losses. “They now can take their Zippo lighters back on the plane in checked luggage and in the cabin,” CEO Booth explained. He then went on to say, “We want people to know their lighters won’t be confiscated, they can take them on board. We think we will get a portion of that business back.”
Additionally, Zippo has been consulting foreign governments and federal trade experts to combat manufacturing factories producing Zippo knockoffs, and begin the legal fight against their crimes. Most of these knockoffs come from China, so Zippo has been concentrating its efforts in that area.
However, Booth realizes that the process is quite difficult. “But it takes an awful long time to get the message across that it’s wrong, and you must stop, and we’re going to prosecute and put you in jail,” said Booth.
Zippo is also having difficulty dealing with the widespread anti-smoking bans sweeping not only the United States, but also other parts of the world.
Due to anti-smoking sentiment in the United States, Zippo has been subject to a 3-4% decrease in the company’s wholesale distribution, according the Booth.
Booth said, “It’s certainly had an effect. We’re not naïve and we certainly don’t feel the anti-smoking pressure is going to do anything but increase our strategy to diversify our product line.”
In order to diversify its business, Zippo acquired the Case Cutlery of Bradford in 1993, a company known to produce knives for outdoor activities. In 2004, Zippo also bought Fashion Italia, which brought in a new line of products that ranges from briefcases, shoes, wallet, belts, and purses – for both men and women.
“We’re always looking for acquisitions,” Booth said.
Although Zippo has reached out to other product lines, its diversification within the lighter category has only taken place since the year 2002. Beginning with the MPL (multi-purpose lighter), Zippo has followed up with such lighters as the Zippo Hand Warmer and the Outdoor Utility Lighter.
These multi-purpose lighters “are reaching a completely different target audience” and are now being sold in outlets and retail chains. Women and campers alike are being exposed to the Zippo brand more readily and Booth boasts that “They’ve had excellent consumer acceptance.”
Despite its focus on diversification, Zippo has not deserted its initial dedication to lighters for smokers. Its newest item since August is the refillable butane gas lighter called the Zippo Blu. Since its development, 85 new jobs have been filled at the Bradford location. At the retail price of $39.95, Zippo is hoping that the Zippo Blu will be a success. Booth expresses his anticipation saying that the recent sales “have been very strong, it’s too early to tell…whether it is going to be a home run for us.”
President and CEO of Zippo, Booth is from Bradford, the birthplace of the Zippo lighter. He earned a biology degree from the Indiana University of Pennsylvania in 1971 and thereafter desired to attend the pharmacy school at the University of Pittsburgh. After taking a job at a refinery to support his graduate school education, Booth got exposed to the business field and decided to change his path. Booth eventually ended up at Sunoco in Philadelphia.
In 1999, Booth returned to Bradford and took on the task of running the Case Cutlery, a sector of the Zippo Company. Two years later, the Chairman George Duke (also the grandson of Founder George Blaisdell) appointed Booth to be the President and CEO of Zippo, thus becoming the third nonfamily member to be in charge.
Recently, Booth has been able to learn some Zippo trivia; especially with the advent of Zippo’s 75th anniversary. Some random facts include: The Zippo lighter’s number of movies appearances (1,500+) and the first design that Zippo got a license for (Elvis Presley).
In addition, a Zippo lighter has been auctioned off at the all-time highest price of $37,000, a 1933 original Zippo in tip top condition.
“It’s eye-opening to say the least,” said Booth.
Source: http://www.post-gazette.com/pg/07304/829760-28.stm