Retailing: Bouncing back from the jibes: Rubbermaid looks ahead across cultural divide

Click to follow
IF THERE is one group that knows the truth of Winston Churchill's famous adage that the United States and Britain are two countries divided by a common language, it must be the board of Rubbermaid.

In its native US, the company is so well-known for its remarkable record of innovation in moulded-plastic home and office products and children's toys sold under the 'Little Tikes' brand that it claims consumers have almost complete recall of its name. But Mike Gowen, head of the company's European operation, admits thta in Britain it suffers from the 'different connotations' associated with the word Rubbermaid.

Sniggers or not, though, the company's performance on this side of the Atlantic is nothing to laugh about. In the 15 years that it has been in business in Britain, its turnover has climbed to pounds 7.5m and pre-tax profits to pounds 1m. Total European sales are nearly double that, but the profit is about the same because the French and German operations are less well-established and barely breaking even.

In only one year - 1991 - has the business not grown. In all the others, it has expanded by between 20 and 40 per cent, and sales this year are up 50 per cent so far on last year. Moreover, in the past five years the company has only made one person redundant. It now employs 42 in Britain, 15 in France and 12 in Germany.

Mr Gowen is convinced that one reason for the company's success is its policy of always looking ahead. In office products, for instance, in which Rubbermaid has always been involved, it is seeking to find opportunities in the trend towards home-working.

At the beginning of this decade, the British operation bought Eldon, a company that had developed products aimed at making offices more efficient. And Eldon Rubbermaid Office Products has sought to become a significant presence in accessories that go around offices - such as the Eldon Wall, which converts wall space into workspace.

It has since moved into developing moulded-plastic desks for telesales, secretarial and desktop publishing workers. With more companies seeing the advantages of equipment that does not chip like wood and is easier to clean, the opportunities are increasing.

And with increasing numbers of people expected to do at least some of their work from home, it is looking at developing desks that can be folded down from walls and fit into the confined spaces that are a feature of most modern homes.

But chairs will not join the product list. 'We toyed with chairs, but the chair market is extremely busy and highly competitive,' said Mr Gowen. Instead, the company will look for 'logical extensions' to existing lines.

Its success is demonstrated by the acclaim it has received. For instance, Robert Waterman's latest book, Frontiers of Excellence, singles it out for its ability to introduce a new product for every day of the year in 1992. It also makes regular appearances in Fortune magazine's list of the most admired US corporations.

Much of the work is done by a 25-strong R & D team, which includes specialists looking at particular areas of business. But Mr Gowen said individual employees fed ideas in as they were travelling around the world and talking to customers. 'It's the most difficult part of the job.'

Nevertheless, in the office area alone 150 new products will be introduced in the next six to nine months - and, because the trend is towards smaller product lines where each item sells more units, 400 will be discontinued.

But the company is not content to be judged by its products alone. It is, says Mr Gowen, highly focused on value for money - meaning quality of service as well as of product.

Such an approach has, for example, helped it forge a key relationship between its Little Tikes division and the large worldwide retailer Toys 'R' Us. It has similar relationships with groups in other areas that give its products extra space in catalogues and other forms of preferential treatment. It also uses the experience of companies like Toys 'R' Us in the development of new products.

It is always looking to control costs. Having centralised many activities, it has also set up salesforces that operate from home. But confident that further growth will come from promoting a name well-established in the US, it is set on giving it greater prominence in Britain - blushes or no blushes.

(Photograph omitted)