Tidewater Workshop crafts an IPO

When Peter Caporilli was employed at W. Atlee Burpee Seed Co. in the early ’90s, his woodworking skills came to the attention of company executive John Burpee, who encouraged him to build a cedar bench to sell in the Burpee catalog. From that simple request, Caporilli grew Tidewater Workshop. Now, with projected sales of $10 million this year, the Egg Harbor City, NJ-based manufacturer/cataloger of cedar garden furniture is preparing for an initial public offering “at the end of the summer,” Caporilli says.

A veteran of Smith & Hawken and Hanover Direct as well as Burpee, Caporilli launched the Tidewater Workshop catalog in 1992. It now has 800,000 names in its house file, and rents another 400,000 from co-op databases Abacus and SmartBase.

As for circulation, Tidewater plans to mail 1.5 million catalogs this year and at least 3 million next year. Last year alone, Caporilli says, the company doubled its revenue, to $8 million. The company also has a Website, which generates about 20% of all sales and 40% of holiday sales.

During the peak period, between March and July, Tidewater uses about 100 subcontractors to help make products. But to retain control of the merchandise, Tidewater handles the final assembly, finishing, and shipping on the premises. Tidewater ships 450,000 pieces of furniture a year.

“We build to order,” Caporilli says. “We purchase all our lumber directly from the mills. Tidewater uses just-in-time inventory and keeps only about a half-day’s merchandise in its warehouse.”

Size doesn’t count

The market turbulence that has led some larger players, such as multititle mailer Cornerstone International, to delay their IPOs isn’t deterring Caporilli from taking Tidewater public. Nor is Tidewater’s relatively small size. Derek Leckow, an analyst with Chicago-based investment firm Barrington Research Associates, says that at $8 million, Tidewater’s annual sales are low compared with those of most companies filing IPOs.

But even small companies can have successful public offerings, Leckow adds. Investors are more interested in the company’s expansion plans, such as “going into new markets or building new distribution capabilities to grow the business,” he says.

For his part, Caporilli says, “Investors like the fact that we have locked up the supply chain, in that we don’t rely on manufacturers because we are the manufacturer.”

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