Hailstorm Takes a Bite of Bear Creek Crop

Sep 01, 2004 9:30 PM  By

One of the orchards of Bear Creek Corp., the parent firm of food gifts catalog Harry and David and horticultural gifts title Jackson & Perkins, was hit with a hailstorm on Aug. 2. The Medford, OR-based marketer’s Royal Riviera comice pear orchard suffered $750,000-$1 million worth of damage. An estimated 6%-8% of the company’s “trademark” pear crop was damaged or destroyed, according to president/CEO Bill Williams.

Some pears were knocked off the trees prematurely; others were gauged or otherwise bruised by the hailstones. The company’s peach crop, located on a higher slope in the same farm, emerged from the storm relatively unscathed because the hail didn’t hit that area as badly, Williams says.

Bear Creek, which as a rule doesn’t take out crop insurance, has its orchards spread out around Medford so that when storms hit, they affect only limited areas. Williams believes that despite the crop losses, the company should manage through the upcoming fall/holiday season with minimal difficulty.

As part of the company’s business plan, “we have more acres of pears than we need,” Williams says. But this year pollination didn’t occur as thoroughly as it normally does, so the company might not have its usual surplus. “This puts us in a little deficit position,” Williams says, “so we’ll have to exercise a couple of options.” These include substituting Bosc pears from other orchards or substituting other fruit, such as apples. Another possibility, he says, is to dip into the company’s holiday pear reserve. But the company won’t know until mid-October, when Bear Creek tests its pear harvest to see how much of the fruit will be saleable, whether it will have a substantial enough reserve. Ninety-five percent of the Bear Creek crop is sold from September through December.

POSTSALE LAYOFFS

The day after the hailstorm came a storm of pink slips for Bear Creek. The company laid off 60 employees in information technology, finance, and human resources. Williams says that although about 10 of those let go were part of a company downsizing, the others had previously worked for Yamanouchi’s Shaklee Corp. unit as well as for Bear Creek. When Tokyo-based Yamanouchi Pharmaceutical sold Bear Creek for $260 million in June to New York-based private equity investment firm Wasserstein & Co., Wasserstein acquired only the catalog properties, so the Shaklee-related work went away.

Some people said they didn’t have the same workloads as they did before the sale, Williams says, and “they offered to put their hats in the ring, and their jobs were appropriately eliminated.” The 60 positions represent 1.5% of the company’s workforce and about $3 million in salaries, he says.