Stanley Black & Decker’s Jim Loree Has Big Plans To Electrify Gas-Powered Tools, Trimmers And Mowers

Jim Loree is the CEO of Stanley Black & Decker, a venerable toolmaker that has heavily invested in acquisitions to boost the company’s growth. We spoke with him last time (for a 2018 magazine article). It was Craftsman. Craftsman was a tool line that DIY-ers loved but decimated by the Eddie Lampert Sears regime. MTD Products is a manufacturer of lawn care and outdoor power equipment, with Troy-Bilt, Cub Cadet, and Robomow.

After a record second half of 2020, when both homeowners and landlords focused on renovations, the $14.5 billion revenue company announced plans to purchase the 80% of MTD that it did not already own. Loree states that MTD will be purchased for a small amount of $2 billion and that it will generate around $3 billion in revenues. We negotiated a very fair price for it.

Stanley Black & Decker’s biggest asset is its massive base of gas-powered trimmers, mowers and other tools. The quieter, more environmentally friendly tools that run on batteries outperform those powered by gas. This shift is already underway.

Loree, who also hates leaf blowers and is trying to relax in his Florida condo, has added MTD to his arsenal. He plans to invest heavily in electric mowers, power washers, and other outdoor products. Because gas-powered trimmers aren’t only noisy and cause environmental problems that aren’t controlled like automobiles, He says that a gas-powered leaf blower emits nearly as much carbon dioxide and other pollutants as a 2016 Toyota Camry when it makes a 1,100-mile trip in one hour.

“When you reach our site, you need to find large things with great potential. Loree states that outdoor electrification was a huge success. “We had always had a plan to electrify outdoor markets. We now have a $3 billion platform consisting mainly of gas-powered vehicles to convert over the next five years to electric.

Loree, now 63, was appointed CFO in 1999. He has overseen a turnaround in the company’s fortunes since then, including dozens of acquisitions. The MTD deal marks his first major acquisition since Craftsman. Loree paid $900million to acquire the name, several employees, and approximately $100 million in Ace Hardware sales. Loree states, “We believed we could grow it organically much more quickly.” “This year, Craftsman will cross the $1 billion thresholds… It is the fastest-growing brand of tools in the world.”

Stanley Black & Decker is experiencing a boom in business following the pandemic. Now, the company must figure out how to maintain its supply chain and keep its plants humming. He says that the company had diversified its semiconductor suppliers before the pandemic. This has meant that the global shortage of chips has not been an issue. The challenge was getting batteries.

He says that the electric vehicle market trends “to crowd out our tools.” He recalls that he had to travel to Korea to get a supply of batteries. It was his first international trip during the pandemic. He had to stay at a quarantined hotel. He recalls that it was like a mix of a dorm and prison. It took me just 15 hours to get the batteries. Then, finally, “I got the goods.”

Loree, who is closer to home, is trying to revive Black & Decker’s brand, focusing on e-commerce. He also plans to launch Reviva, a brand made of recycled plastics. He’s always open to other acquisitions, though they may be smaller. He says, “We have other ones out there. Some outdoor ones and some that are tool-related.” “There are more acquisitions.”

Stanley Black & Decker anticipates a slight decline in sales over the second half of this year, Loree states. The pandemic boom will not last forever. Nicole DeBlase, Deutsche Bank analyst, and Kevin Marek, Deutsche Bank’s chief economist, expect MTD to increase earnings by $1 per share in 2022. Earnings per share will grow from $11 this year to $17 by 2025. They predict that revenue will rise to $21 billion by 2025. In a recent research note, they wrote that “We are strong supporters of the outdoor opportunity.”

Stanley Black & Decker shares have increased more than 45% in the past 12 months to $198.

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Adam Collins
Adam writes about technology, business and economics. With master's degree in Economics, he's presented six papers in international conferences. As a solivagant in the constant state of fernweh, curiosity is the main weapon in his arsenal.

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