Crescent, CED and Siemens Make the News

Crescent, CED and Siemens have made the news so far this week.  Each represents “change”, and opportunity, for distributors.

Crescent announced that it hired Dennis DeSousa as SVP Business Development.  This is interesting as Dennis was a long-time Graybar employee and had been involved in their electrical and datacom sales efforts.  According the the Crescent press release Dennis will “focus on growing Crescent’s market share through targeted acquisitions and organic growth strategies.”   Some thoughts:

• Dennis will be involved in their acquisition strategy?  How many acquisitions has Graybar made over the last 5-10 years?
• Crescent recently named Dick Waterman to its Board.  Interesting move as Dick retired from Rexel.  Through his involvement in NAED as well as acquisitions at Rexel and Westburne, Dick can network to many distributors and has been involved in many acquisitions.
• Could Crescent be looking to grow via acquisition in the 20-30 states it has no presence? Could this be Chris Beslin’s growth strategy? With the number of personnel investments that Crescent has made this year, either the family (BOD) wants significant growth and is willing to invest back into the business or the company is “flush” with cash.
• In considering Graybar, when was the last time you heard of a senior Graybar person leave the company, and not to retire? Could a culture change be going on at Graybar?

The Crescent announcement obviously means change for Crescent, and probably Graybar.  For other distributors, if Crescent becomes an acquirer, it adds to the short-list of potential acquirers to hopefully increase sale prices.

CED’s GreenTech division continues developing relationships to grow its business.  The latest is with Sunvalley Solar,  a solar power technology and solar system integration company. It appears that the big benefit to this relationship is that Sunvalley provides access to a range of solar manufacturers (they are a wholesaler and integrator), enabling CED GreenTech to offer complete packages … solar equipment and electrical equipment.  CED’s approach, which is traditionally divisionally-driven or profit center driven, is focused on quality partnerships as it pursues the various “clean energy” market segments.  This division of CED appears to be one of the few electrical distributors fully-focused on the solar niche … most prefer to be opportunistic or to react to customer needs.  The concept of partnerships may be a growth strategy to consider to pursue market niches.

Siemens has a recall challenge.  Courtesy of Mike Holt we learned about Siemens’ circuit breaker recall which “involves Siemens and Murray 15 through 50 AMP single and double pole circuit breakers, load centers (circuit breakers that come with an electrical panel), and meter combos (contain a load center and a meter socket). “Siemens” or “Murray,” date codes 0610 or 0710 and the catalog number are printed on a label on the side of the circuit breakers. Date codes between June 2010 through August 2010 are stamped on the inside of the metal box of the load centers and meter combos.”  There are 2.2 million units subject to the recall that were sold at distributors, Home Depot, Lowes and other locations.

You can click here to see some contractors’ comments on the issue.  Based upon these comments, this is exactly why we don’t need RILA / BRC involvment in the electrical industry … strong oversight at a nominal cost vs. association interference (see our posting on this issue and the various comments.)

From a distributor viewpoint, printing reports of what was sold to whom is important, albeit distributors don’t know where product goes once it gets to a contractor.  For contractors this can be good as it can mean “WORK”.  For distributors, possibly customer service issues; for competitors … opportunity.  In the joking words of one executive, “now Home Depot and Lowes only have three suppliers.”

That’s all for now.  Earlier this week was A-D’s North American Meeting.  If we hear something pertinent, we’ll let you know (or if you attended, send us your thoughts – confidentially.)