Action Industries Inc. closed its captive housewares molding operation Aug. 18 because of a sharp drop in demand for its promotional items among mass retailers. The Pittsburgh firm plans to rely on local molders to make laundry baskets, storage containers and similar products it once molded for firms such as Sears Roebuck & Co.
``We have contacted several firms and are near an agreement with one,'' Robert Garrity, Action's senior vice president of operations, said in a telephone interview.
He declined to identify that molder or other possible candidates.
In the late 1980s, Garrity said, the captive molding operation made about $18 million per year of promotional housewares, but recent sales had fallen to about one-quarter of that.
The drop in demand made the 24-year-old molding business inefficient.
Garrity said the operation had 18 injection presses with clamping forces of 125-700 tons and a blow molding machine.
Action has been selling the equipment through Stopol Inc. of Solon, Ohio.
Action plans to convert the 50,000-square-foot molding and machine shop to a warehouse. The company will focus on its main business as a marketing services consultant to mass retailers, said Linda Wyckoff, vice president and general counsel.
The molding operation fit Action's marketing business and did not focus on its own profitability, Wyckoff said.
Action also imported promotional items when offshore molders could make them cheaper than the Pittsburgh plant, she said.
Action's proprietary products were sold for retailers' door-crasher specials during sales promotions. Discount stores now increasingly promote ``low everyday prices'' and hold fewer special promotion days.
They also increasingly conduct their own promotions in deals with national brand manufacturers.
Action had employed about 80 in its nonunion molding operation, but that figure recently dropped to 30 as sales fell, Wyckoff said.