You might ask why a holding company with sales of more than $800 million would be interested in buying a specialty cataloger/retailer with approximate sales of $4.5 million. For San Antonio, TX-based holding company Rush Enterprises, the answer is simple: to grow its direct-to-consumer business.
On Sept. 8, Rush acquired western apparel and gear marketer Smith Bros. Catalogs for $2.3 million in cash. Martin Naegelin Jr., Rush’s chief financial officer, says the new parent company will immediately begin to integrate Smith Bros. into its D&D Farm and Ranch Supermarket subsidiary, which Rush acquired in March 1998. D&D is a chain of superstores catering to ranchers and farmers in the greater San Antonio, Houston, and Dallas-Fort Worth areas. Rush intends to operate Smith Bros.’ store as a Rush Retail Center and plans to build a flagship store on its 20-acre property in Denton, TX.
Rush Enterprises, which also operates John Deere construction equipment dealerships in Texas and Michigan, and the largest network of Peterbilt heavy-duty truck dealerships in North America, “is looking to expand its presence in the business by getting into catalogs and online marketing,” Naegelin says. Expanding its western-lifestyle business may also buffer Rush from the current softness in the truck industry.
Cross-marketing opportunities The acquisition gives Rush access to Smith Bros.’ house file of more than 120,000 customers, not to mention the ability to offer D&D’s expansive merchandise line through a print catalog and online. Smith Bros., which carries the tagline “the premier western store online” on its Website, already sells a broad range of products, from cowboy hats to horse bits. D&D offers additional merchandise such as fencing and horse trailers. Naegelin says Rush plans to add D&D products to the Smith Bros. book, which it will then mail to D&D customers, as well as to existing Smith Bros.’ buyers.
But Rush has no plans to launch its own Websites or catalogs. In fact, Naegelin says, “we wanted alternative avenues of distribution, which include catalogs and the Internet, but we didn’t want to start from scratch. We wanted to acquire a company established in those areas, and Smith Bros. was available.”