LifetimeBrandsto Acquire Reed & Barton
Reed & Barton, the last and oldest silversmith company in a city still known as the Silver City, will cease all operations in Taunton no later than June.
Chief Executive Officer Tim Riddle confirmed Thursday that the 191-year-old family business had filed Chapter 11 bankruptcy protection and will close its West Britannia Street facility in late May or early June.
Riddle blamed costly pension liabilities, ranging from $9.6 million to possibly $18 million, for sealing the fate of the historic business — which since 1824 has been operating in Taunton’s Whittenton neighborhood adjacent the Mill River.
“It absolutely killed us — for years it just drained the company of cash,” Riddle said of the pension costs.
“We hung on as long as we could,” he added, “But it’s been all-consuming for the past year and half.”
He said Reed & Barton now employs about 80 people, most of whom are office and management workers. He also said he doesn’t anticipate more than about five will likely be retained once a pending sales deal has been finalized.
Riddle, who was hired as CEO in 2001, said the company has a $15 million sales agreement with former competitor Lifetime Brands.
He said the Garden City, New York-based Lifetime, whose 30 or so brands include KitchenAid and Farberware, has offered $10 million in cash and a $5 million promissory note to buy Reed & Barton’s assets — including its brand name — but none of its real estate holdings.
“They won’t keep the buildings or buy the real estate,” Riddle, 58, said.
In addition to 27 attached and separate buildings on the Taunton site, those holdings include an Elm Street parcel in Norton, where up until it closed in 2007 — at which time 70 workers were laid off — Reed & Barton’s Eureka division manufactured jewelry boxes, flatware chests, humidors and other gift items.
Riddle said there is a 90-day bidding period before Lifetime Brands can be assured of a deal.
He said besides inventory assets being stored in the Taunton warehouse, the deal includes temporary use of two leased showroom sites, one in Atlanta and the other in Manhattan.
Chief financial officer Chuck Daly said the pension liability became something that “we could never get our arms around — it was a big cash drain.”
Daly said the final pension-cost estimate will depend on end-of-the-year, financial actuary reports.
He said nearly all of the nearly 900 former employees collecting pensions will not be affected. The federal Pension Benefit Guaranty Corporation, which insures defined-benefit pension plans, will eventually fill any funding gap.
Daly said generations of heirs to the Reed family, through “multiple trusts,” own the company and its real estate holdings. He said a final decision pertaining to real estate ultimately will be decided by an unsecured creditors’ committee.