Libbey adjusts sales strategy to match online trends
than perhaps the consumer expects them to be,” Mr. Foley said. “We see consumers, for the right value, being willing to pay more.”
Libbey, which has been headquartered in downtown Toledo for more than 125 years, makes a variety of glassware that is sold to restaurants, consumers, and other companies that incorporate it in their products. It also sells flatware and dinnerware. In addition to its corporate headquarters, it also has about 750 hourly employees in Toledo, most of whom work at its Ash Street glass factory.
The company remains profitable. Last year, it had net income of $10.1 million. Officials also say Libbey is far and away the market share leader at providing glassware to U.S. restaurants, and that it maintains the top spot for casual beverage glassware in the retail sector.
Even so, the company has struggled to grow.
Its revenues peaked in 2014 at $852.5 million, but have taken a significant step back the past two years and coming in at $793.4 million in 2016 — the lowest figure since 2010.
Libbey’s stock price also has taken a beating.
Shares soared to nearly $42 in May, 2015, but have trended downward since. On the last trading day of 2016, shares closed at $19.46. They’ve since fallen another 58 percent to close at $8.25.
Mr. Foley, who came out of retirement in January, 2016, to lead Libbey, frequently says he believes the company’s best days are ahead. And he’s put his money behind that belief, buying 5,000 shares on the open market in March and another 5,000 shares in May.
Still, he’s candid about the challenges he faced when he took over the CEO job.
“We didn’t have an effective marketing organization. Our sales growth was essentially flat and we weren’t prepared to launch new products; in fact, we had stopped developing new products. The business wasn’t positioned well to market and wasn’t positioned well to grow,” he said.
Under his leadership, Libbey has built up its marketing team, begun relying more heavily on consumer research to develop products, and pushed the team to think beyond the tabletop for future opportunities.
“We now have a number of projects in queue that we’re executing against today that, as they unfold, will take us into new segments, will expand our penetration into new markets, and will serve as a foundation for the business to grow,” he said.
“We didn’t have any of that in place at all.”
The push to e-commerce is emblematic of that.
Libbey is probably five to seven years later to the game than it should be, Mr. Foley said. But it’s forging ahead fast.
Since late last year, the company has worked to build its technical capabilities, new content strategies, and a specialized marketing initiative. It also set up a third-party logistics system able to deliver most orders within 48 hours.
The idea is not to sell direct to consumers through its own portal — although that could be a possibility some day, it’s not on the horizon — but to provide far more options for shoppers at the websites they already frequent.
By using a third-party logistics provider, customers get the benefit of faster shipping and wider availability, and retailers benefit by not having to stock as much inventory.
Libbey hasn’t said how much the project costs, but officials have said it is significant. The system will launch in the middle of this year’s third quarter.
“I’ve seen some of the early content, it looks terrific. I’m really pleased with the progress. It’s been a herculean effort on the part of an awful lot of people to get this pulled together,” Mr. Foley said.
“I’m proud of the work they’ve all done.”
The company believes the benefits will be twofold.
Not only do they get deeper in the rapidly expanding e-commerce marketplace, but also they will have the ability to push products that have higher profit margins.