Reed & Barton, a nearly-200-year-old manufacturer of flatware, silver, and jewelry boxes, filed for Chapter 11 on Feb. 17 and plans to sell most of its assets to a former rival.
According to a deposition from president and CEO Timothy K. Riddle submitted to Massachusetts bankruptcy court, Lifetime Brands, a longtime competitor that owns the KitchenAid and Faberware brands, has made an offer to buy the company’s non–real estate assets for $15 million. The deal calls for Riddle and chief financial officer Charles Daly to continue to work at the company. Under the bankruptcy process, competing bids may be received within 90 days.
Taunton, Mass.–based Reed & Barton dates back to 1824. It is one of the country’s oldest privately held companies, with ownership still held by descendants of founder Henry Reed. In 1996, it designed the gold, silver, and bronze medals for the Summer Olympics in Atlanta. In 2011, it purchased Lunt Silversmiths, another flatware company that also filed Chapter 11.
In recent years, it has expanded beyond its traditional high-end retail base to sell to mass merchants. According to Riddle, approximately 40 percent of its 2014 sales were made to three retailers: Costco, QVC, and Federated Department Stores (Macy’s and Bloomingdale’s). While its 2014 fiscal year sales totaled $37.4 million, the company still recorded a $1.4 million loss. Sales for the preceding fiscal year didn’t look like they would keep pace, as orders from Costco and QVC dropped off dramatically.
But the real culprit, Riddle maintains, was the company’s pension plan, which historically provided employees with pensions based on their five highest years of compensation for a decade post-retirement. Current pension liabilities total $9 million, but the company believes they may eventually exceed $18 million.
The pension plan “absolutely killed us—for years it just drained the company of cash,” Riddle told the Taunton Gazette.
The plan does not include Reed & Barton’s real estate. As a result, the company is expected to close its historic headquarters in Taunton, Mass. (In 2009, it moved the last of its production from Massachusetts. It is now done by subcontractors, mostly in Asia.) This has caused considerable despair locally, as Reed & Barton is considered the last silversmith in Taunton, a town that used to be so known for them it was called the silver city.
The bankruptcy “underscores the demise of the once-great silversmithing industry that extended from Greater Providence through Southeastern Massachusetts,” wrote one local paper. “The region has yet to replace the skilled, middle-class jobs that the industry once generated.”