Selfix Inc., a $40 million molder of self-adhesive hooks, bath accessories, juvenile products and shutters, plans to gobble up a housewares molder double its size, Tamor Plastics Corp., and its three factories. Tamor was founded in Leominster, Mass., in 1955. It opened a second plant in Louisiana, Mo., in 1995. A third plant, in Thomas-ville, Ga., opened in October.
Selfix said the acquisition will give Selfix total sales of more than $120 million this year. The move comes as Selfix - stung by the deaths of its founders a few years ago - is returning to profitability after a major restructuring. The Chicago company, traded on Nasdaq, replaced all its top officers in 1994 and 1995, and dropped some low-margin product lines. Last year the company closed its subsidiaries in Canada and Hong Kong, though it still serves those areas.
James R. Tennant, Selfix chairman and chief executive officer, said that only the strong will survive selling consumer products to an ever-smaller number of mass retailers.
``Right now on the retail side, you've got fewer customers simply because the consolidation in the retail business, with so many companies going out of business, you've got it stratified,'' he said in a telephone interview.
``There is kind of the big and the biggest, Kmart, Wal-Mart and Target really dominate the industry,'' he said.
``So what the strategy has to be is to sell more to the major retailers. The only way you can do that is to have as broad and wide a product line as you can possibly manage.''
Tennant, who became chairman and CEO in 1994 after two years on the board of directors, said Selfix will run all three Tamor factories.
Terms were not disclosed.
The deal marks the second ownership change this year at a major molder in Leominster - a center of U.S. plastics housewares manufacturing. In February, Mobil Chemical Co. sold Tucker Housewares to Zeta Consumer Products Corp., a maker of trash bags.
At Tamor, Leonard Tocci will remain as CEO. Tocci's roots run deep in Leominster housewares molding. His father, Felo Tocci, founded Tucker Housewares. Leonard Tocci worked at Tucker for 25 years before leaving in 1984 to found American Hanger Inc. in Leominster.
He sold that company and joined Tamor in 1988 as an owner and president.
Tennant said Tamor management helped Tamor grow by nearly 50 percent in the last two years.
``Tamor's expertise as a low-cost producer has allowed the company to command formidable market share in the plastic storage category,'' Tennant said.
Selfix has strong international sales and distribution that will help Tamor expand worldwide.
Also, he said, a larger company can get a break on resin prices, a key to turning a profit in a retail environment where ``price increase'' has become a foul phrase.
``One immediate benefit is that we expect the combined entity will be able to purchase resins and other raw materials more cost effectively,'' Tennant said.
Resin accounts for 15-20 percent of total product costs.
Tennant said small molders will have a hard time making money in housewares.
``But if you are a good manufacturer and you have strong customer relations and a valuable program with your customers, then you can make money in this business,'' he added.
Founded in 1952, Selfix still injection molds its original, signature product - the stick-on plastic hook. Selfix is strong in value-priced plastic bath, shower and home organization products, molded at its Chicago plant. Its bath products include shower organizers, towel bars and soap dishes. A subsidiary, Shutters Inc., injection molds residential shutters in Hebron, Ill.
Tocci said Selfix is ``strong in the bath department [and] strongest in storage and closet products.''
Selfix employs 368, about half of them unionized production workers in Chicago. The combined firms run about 75 injection presses, with clamping forces of 150-2,000 tons.
Tamor employs about 400, including 250 in Leominster. Leominster production workers are unionized.
Selfix also makes juvenile storage products such as shelves, racks and hangers under its Tidy Kids brand name. Selfix bought Mericon Child Safety Products of Livonia, Mich., in 1995.
Selfix was founded by Mike and Norma Ragir, and the husband-and-wife team ran the company for many years. Selfix went public in 1987. Mike Ragir died several years later, and his wife died in 1994.
The Ragir family owned the majority of stock, and their deaths hit the company hard, Tennant said.
Today the ownership is more dispersed, through trading on the Nasdaq National Market System, although the founders' family still owns about 30-40 percent of the stock, Tennant said.
Selfix lost money the past two years - $4.01 million in 1995 and $6 million in 1994 - on sales each year of about $41 million. But the company has turned around so far this year, with strong second- and third-quarter numbers, Tennant said.
Sales for the third quarter, ended Sept. 28, increased 4 percent, to $10.7 million, from $10.3 million a year earlier. Third-quarter profit soared to $764,000, from $42,000 in 1995. In the second quarter, the company reported profit of $709,000.
For the first nine months of 1996, sales declined 6.9 percent, to $29.5 million, from $31.7 million in the year-ago period. The company attributed the sales decline to products discontinued because of poor margins. But profit for the first nine months was $357,000. Selfix lost $165,000 in the first nine months of 1995.