M.A. Bruder & Sons, Inc.

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M.A. Bruder & Sons, Inc.

60 Reed Road
Broomall, Pennsylvania 19008
U.S.A.
Telephone: (610) 353-5100
Toll Free: (800) 622-1899
Fax: (610) 353-3963
Web site: http://www.mabpaints.com

Private Company
Incorporated: 1946
Employees: 772
Sales: $170 million (2002 est.)
NAIC: 325510 Paint and Coating Manufacturing

M.A. Bruder & Sons, Inc. is a family-run company that owns a regional chain of paint stores under the MAB Paints banner. With its headquarters located in Broomall, Pennsylvania, MAB boasts the top market share in the Philadelphia area, outpacing national brands like Glidden and Sherwin-Williams as well as the coating products merchandised by Sears. The MAB chain consists of 230 company-owned stores and a lesser number of independent dealers (about a third of the chain) covering 17 Eastern and Midwestern states. A typical MAB store is 3,500 to 5,000 square feet, a size the company has found to be large enough for periods of high demand while not leaving an excessive amount of unused space during the inevitable down cycle of the building industry, which drives the paint business. MAB avoids enclosed malls, preferring strip centers or stand-alone stores where professional painters are comfortable entering in paint-splattered overalls. MAB caters to both the do-it-yourself and professional customer, offering a wide range of architectural, industrial, maintenance, and commercial coatings. In addition, MAB stores sells painting-related products such as spray equipment, brushes, rollers, paint removers, and washers. The company produces its paints at manufacturing plants located in Philadelphia, Pennsylvania, Indiana, and Florida.

Company Established in 1899

The MAB name bears testament to the company’s founder, Michael Albert Bruder, a pioneer of the commercial paint in dustry. He started out with a single store that opened in 1899 and was located in South Philadelphia at 16th Street and Passyunk Avenue. At the time, paint stores essentially sold the raw ingredients for paint—pigment, linseed oil, turpentine, and colorant—which were then mixed together at the job site. In addition to selling these bulk materials, Bruder began to mix paint himself and marketed the convenience of his ready-to-spread product, quickly finding a receptive base of customers among professional painters. With success came expansion, and Bruder opened new stores in the Philadelphia area, which later became dominated by two other family-run companies that would serve as MAB’s main competition over the ensuing decades—even more so than the national chains that would one day enter the Philadelphia market. Those chains would learn that the local trio of paint companies had a stranglehold on the market. Buten Paint & Wallpaper, a retailer that sold paint made to its specifications, was formed in 1897. The other local company, Finnaren & Haley, Inc., actually had personal ties to MAB. Michael Bruder encouraged the original Mr. Haley and Mr. Finnaren to go into business together and served as a witness to the signing of their partnership agreement in 1913.

In 1932, Michael Bruder died and his son Thomas A. Bruder took over the company and carried on the task of growing the business, despite the economic difficulties brought on by the Great Depression. By the end of the 1930s, MAB operated 13 stores in the Philadelphia area. Business was enhanced during this period by the rising popularity of interior paints, as home owners began to paint their living room walls rather than rely on wallpaper. MAB helped to stimulate this emerging market of do-it-yourself customers by providing instructions on how to prepare and apply paint. During the 1950s, MAB expanded its reach in the Philadelphia market by adding stores owned by independent operators.

Third Generation of Bruder Family Takes Over in 1967

Thomas A. Bruder, Jr. became the third generation of the Bruder family to take charge of the business, succeeding his father as president in 1967, aided by two other grandsons of Michael Bruder. Two years later, in 1969, MAB grew by external means, acquiring Smith Alsop Paint & Varnish of Terre Haute, Indiana, adding new locations in six Midwest states plus Alabama and Florida. Furthermore, MAB picked up two paint manufacturing plants in Terre Haute and Florida. Over the next twenty years, MAB devoted itself to internal growth, opening new stores in existing and new markets. To better serve the changing paint industry, MAB introduced many new products and created field sales service teams to better assist professional customers: builders, architects, and paint contractors. In 1981, the company upgraded its manufacturing Operations by opening a new plant in Orlando, Florida. By the early 1980s, MAB was generating an estimated $85 million in annual sales, most of which came from the Philadelphia area, where the chain boasted nearly 100 stores and the lion’s share of the local market. A distance second and third in Philadelphia, F&H had estimated annual sales just over $10 million and Buten just under $10 million. While the focus of all three area retailers was on the quality of the product, MAB was far more aggressive in its approach to television and radio advertising. The chain was reluctant to discount its paints, which management felt was unnecessary, instead opting to promote MAB’s less expensive second line of paints.

A fourth generation of the Bruder family became involved in the running of the company. Thomas A. Bruder III first worked as a stockbroker during the 1980s at a time when the family considered taking MAB public. In the end, it was decided to keep the business private, and Thomas Bruder gave up trading to serve as MAB’s marketing manager. The company was adversely affected by a downturn in the economy in he early 1990s. Deriving about three-quarters of its business from commercial or industrial customers, the company was hurt by a lack of new commercial construction. The do-it-yourself market, on the other hand, picked up some of the slack as many people decided to save money by doing their own painting. As a result, revenues were flat for 1991, but by carefully scheduling work and production the company was able to avoid laying off any of its 1,300 employees. MAB remained financially strong enough so that in 1992 it was able to acquire Paint America Co., a Dayton, Ohio-based maker and retailer of paints and coatings. The $4.8 million purchase brought with it 36 “Warehouse Paint Centers” stores mostly located in the Dayton and Cincinnati areas.

While MAB continued to produce a healthy profit, the Bruder family in the mid-1990s was becoming increasingly concerned about declining sales volumes. As part of a complete reorganization of the company, Thomas Bruder III took over as vice-president of sales, charged with turning around the company’s sales efforts, which were handled by 74 account representatives along with managers and support staff. Bruder set a goal of increasing overall sales by 10 percent, but faced with an entrenched way of doing business, he turned to outside help, hiring a sales training and management development firm, Powers Training and Development of Conshohocken, Pennsylvania. A number of the sales reps were reluctant to embrace the changes that Bruder and Powers were promoting, with the result that within the next two years about half left the company. No one could recall the last time that an MAB store manager had been fired, yet now those who refused to adhere to the new system were quickly severed from the company, leaving some territories vulnerable to competition.

The changes instituted in MAB sales practices resulted in only modest gains in the late 1990s, but the company was not alone: the industry as a whole was experiencing flat growth. To attain growth, retailers were forced to increase market share, resulting in some consolidation. Rival Philadelphia paint company Buten, for example, was bought in 1994 by a national company, Beltsville, Maryland-based Duron Inc. Because MAB manufactured its paints locally it was still able to successfully compete with Duron, Sears, and Sherwin Williams, which could not provide as quick a turnaround on special orders. However, in order to continue to be successful MAB had to become increasingly more reliant on technology, which was not only instrumental in research and development efforts but also found a place in the store. By scanning a sample of a color a customer wanted to match, an in-store computer could read the values of the desired color, which could then be automatically mixed on site. MAB also began using computers to collect data on its customers, an activity that began in 1997 when it hired a marketing company. In addition to its traditional advertising program aimed at the general public, MAB was now able to use its data base to target commercial customers who were already using MAB coatings. MAB also invested money in research and development to fulfill the needs of its customers. For example, a number of schools, health-care facilities, and office buildings with environmental concerns asked for a non-odorous paint. In 1998, to address these concerns, MAB introduce Enviro-Pure, a coating that did not rely on volatile organic compounds and produced no odor.

Company Perspectives:

‘On Time As Promised, Or We Pay’. You can find this service motto prominently displayed in all of our stores, on our business cards, and throughout all MA.B. facilities. This simple statement, the guarantee that we will deliver on our promises to customers, puts into words one of the fundamentals of our company’s century of success … a dedication to servicing the customer. From Specification writing and custom color matching to expedited job site delivery and technical support, M A.B. personnel accept the responsibility for meeting the needs and expectations of our valued customers. Helping customers succeed is our key to success.

Alliance With Kelly-Moore Established in 1999

In the mid-1990s, MAB attempted again to grow externally but was outbid in acquisition attempts in St. Louis and Fort Myers, Florida. The company was particularly interested in moving more aggressively into Sunbelt states where, because of warmer weather, outdoor painting took place year-round, making the business less seasonal than was the case in the Philadelphia market. In June 1999, MAB took an important step in expanding its business by forming a partnership with Kelly-Moore Paint Co., a San Carlos, California, paint manufacturer and retailer. Like Bruder, the Kelly-Moore 142-store chain had a strong regional presence in the West, as well as a few locations in Oklahoma and Arkansas. Because the territories of the two companies did not overlap they were able to form a marketing alliance that allowed both parties to bid on national contracts, a area in which regional suppliers were generally excluded. Terms of the agreement called for MAB to provide paint for projects on the East Coast and Kelly-Moore on the West Coast. The companies would have the added benefit of now being listed with just five other national paint manufacturers in the American Institute of Architects’ MasterSpec Finishes directory, which provided architects from around the country with specifications, available colors, and special types of paint offered by the short list of paint manufacturers.

Although MAB could boast of a number of positive developments in the late 1990s, the company endured several years of flat results. As the larger players in the industry continued to buy up market share and were able to use their size to their advantage, companies in the middle range like MAB were hard pressed to keep their share of the business. MAB was still well entrenched in the fiercely loyal Philadelphia market and was still successful in landing contracts for the major jobs that provided close to 80 percent of its revenues. Among its more high-profile projects was the restoration of the Ben Franklin Bridge, the new Kimmel Center, and a new wing of the Philadelphia airport.

Nevertheless, it was clear that the company had to perform better within its market to just keep pace with the competition. While the company was still performing well, management detected that a complacency had set in which jeopardized MAB’s future. To help the company revive growth, the Bruders looked to someone outside of their family and in the autumn of 2000 hired former Sherwin Williams division president Jim Renshaw to serve as its general manager. Over the next year and a half, 30 percent of the sales force changed over and ten of 13 middle managers were replaced. In keeping with the Bruders’ desire to bring fresh talent to the company, Renshaw hired six managers from outside the company, with only four of the positions filled by MAB insiders. In addition, MAB introduced new products and redesigned its stores, which then cut back on inventory by 19 percent. To support its all-important commercial business, MAB opened two commercial branches, one located in Philadelphia and the other in Chicago, to handle the kind of large-scale tinting jobs that the smaller stores were not equipped to handle.

MAB was also careful not to lose sight of its longtime practice of treating its major customers like partners. Contractors, who often had to wait 60 to 90 days for payment from their clients, appreciated the liberal credit terms MAB offered to accommodate their cash-flow situation. It was that local touch that Renshaw wanted to retain, and he also recognized the need to retain the bulk of MAB employees, who possessed the knowledge and rapport with customers that would continue to give MAB an edge over much larger national rivals.

In June 2002, after being in business for more than 100 years, MAB reached a significant milestone when its Philadelphia plant produced the company’s billionth can of paint.