Johnson Worldwide Associates Inc. makes recreational products. Camping products include canoes, kayaks, tents, backpacks and outdoor clothing. Fishing products include electric fishing motors, rods, reels and fishing lures. Scuba diving products include suits, tanks, depth gauges and face masks.
The company is controlled by Samuel Johnson, chairman of S.C. Johnson & Son Inc., a privately held Racine-based household products company; members of Johnson’s family and related entities.
Its headquarters is at 1326 Willow Road, Sturtevant.
Total class A shares (as of Dec. 12, 1996) 6,878,485
Price per share (as of Feb. 3, 1996) $13.00
Estimated market value $89,420,305
Class A shares controlled by officers as a group 2,049,662
DEAD IN THE WATER
In 1995, Johnson Worldwide Associates acquired a new fishing line, called SpiderWire, that cast the company’s fortunes in a positive light. Sales climbed 22 percent from the year before.
Believing it had hooked a lunker, JWA stocked up on SpiderWire, as well as other products in its fishing line, especially rods and reels. According to chairman Samuel Johnson, that turned out to be a bad plan.
“We made the mistake of boosting our inventory, not realizing that the market was turning soft, when we should have been bringing inventory levels down instead,” Johnson said.
Toward the end of 1996, the company acknowledged it had a problem. A few heads rolled in the company’s fishing business. Also, Ronald Whitaker replaced John Crabb as Johnson Worldwide’s president and chief executive officer. Whitaker had been president and chief executive officer of EWI Inc., a supplier to the automotive industry.
The new management took a fresh look at the inventory situation and concluded that significant product writedowns were in order, Johnson said. In the fiscal fourth quarter, JWA took writedowns totaling $2.9 million, a loss of $2 million on the sale of one of its businesses and charges of $1.9 million to relocate another business, pushing the company to an $11.4 million loss on the year.
Disappointing earnings didn’t cause JWA to lose significant market share in its various product lines, however. Several businesses posted healthy growth, especially the company’s European camping and diving businesses.
With new management in place, JWA adopted economic value added (EVA) as a measure of business success. EVA is a management device intended to measure a company’s capacity to produce profits. The system uses a common yardstick to measure performance throughout the company and requires all managers to focus on improving shareholder value.