Business Matters

Wal-Mart keeps pledge to buy American, uh, Arkansan in this case

Thanks, but no thanks.

It was nearly five years ago that Doug Hollowell approached Wal-Mart about the prospect of carrying Doughboy or one of the three swimming pool lines manufactured by Arkansas-based Hoffinger Industries. Dealers throughout the country carry the pools, and every piece-- from the liner to the ladder -- is produced within the 660,000-square-foot plant that takes up nearly four city blocks in Helena-West Helena.

Because the operation is vertically integrated -- all the raw materials are turned into products within the same facility -- Hollowell, the owner and president, runs a lean operation. Not, however, lean enough for Wal-Mart, he was told at the time.

Quality of the product was not an issue, but Wal-Mart was not willing to budge on what it was willing to pay.

So it was with some skepticism that Hollowell applied on April 30 for the Wal-Mart "Open Call" event. The retailer has pledged to buy $250 billion in American-made products through 2023 and invited potential suppliers to apply for a chance to make a sales pitch at Wal-Mart headquarters in Bentonville.

Hollowell applied, but in the back of his mind couldn't shake the thought that he had been down this road before.

Or so he thought.

"We saw a completely different attitude from the buyers," Hollowell said. "We didn't actually get a deal, but we got a door opened. We're excited about the possibility and believe that we'll be supplying Wal-Mart some goods very shortly."

As of press time, Hollowell hadn't signed a formal agreement for distribution in stores or online. Wal-Mart's "news" feed on Twitter did post a message congratulating Doughboy for reaching a deal within hours of the pitch, but there are still some conversations remaining before anything is official. Hollowell is confident it will happen, which would be big news for the manufacturer and -- depending on the scope of the deal -- Phillips County.

Hoffinger Industries might be one of the state's least-known success stories. It has certainly meant a great deal to the economy in Phillips County, where unemployment was most recently reported at 9.1 percent.

Later this month Hoffinger Industries, which is the largest manufacturing employer in Helena-West Helena, with 137 employees, and has been a fixture there since the 1950s, will host current and former employees for recognition of its longest-tenured workers. They'll celebrate multiple employees with 30-plus years at the plant, including one celebrating a 40th year.

Average tenure for employees at the plant is more than 20 years, backing up Hollowell's assertion that working at Hoffinger is "a career, not a job."

Depending on what Wal-Mart wants -- it could ask for anything from a commitment to fill online orders or to make a massive single order to stock shelves across the country -- there could be substantial growth in the careers available at the plant. Amazon, by the way, signed on to carry one line of Hoffinger pools late last summer. Revenue from those online orders has jumped more than 1,000 percent this year.

Hollowell politely declines to give specifics on revenue. When asked if it was fair to characterize sales in the tens of millions, he said, "Yes. You could safely say that."

Even a good number of people in Phillips County, several locals told me, don't realize what a big deal Hoffinger Industries has been over the years. A deal with Wal-Mart certainly has the potential to change that.

That's the beauty of the retailer's pledge to buy American-made products. It makes good business sense for Wal-Mart, but it has the potential to be transformational for companies and families across the country.

If anybody doubts the Wal-Mart push to buy more American products, we have an example to keep our eye on in Arkansas. What might have seemed easy to dismiss as a publicity stunt, actually came off as sincere, Hollowell said.

"When you look at it, you're kind of skeptical that it's just a PR campaign," Hollowell said. "After the event you could tell they're committed. From the CEO on down, these guys are interested in helping you try to understand their business model and make it work."

SundayMonday Business on 07/13/2014

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