How to Get My Nickle Oven Racks Looking Good Again?

Regular readers of my Cars of a Lifetime series will know by now that I spent some time working for JC Whitney in Chicago. Given how deeply this brand is ingrained with US motorcar culture, I figured I would share my unique insider's perspective on the company, peculiarly of its downfall (yes, I know that technically JC Whitney is however around, simply not actually, as you shall meet).

While I normally dislike quoting Wikipedia in my posts, I will take some liberties here, since much of the Wikipedia article on JC Whitney was authored by yours truly. JC Whitney began as a scrap metal thousand on Chicago's s side, formed by Lithuanian immigrant Israel Warshawsky, who came to the US to escape religious persecution. Warshawsky named the company JC Whitney in club to give the visitor a less foreign-sounding name.

While Israel did alright for himself, things really started to pick up when his son Roy Warshawsky joined the concern in 1934. Possibly inspired by the success of boyfriend Chicago post-order giant Sears and Roebuck, it was Roy'south thought to expand the business beyond Chicago past entering the burgeoning mail-order itemize business.

July 1950

Initially, he started promoting the business with classified ads in magazines similar Popular Scientific discipline and Pop Mechanics. Many of these ads are available in the magazine archives at Google Books, which I've sprinkled throughout my mail.

The business really hit its footstep in the 1950s. The ads eventually blossomed from 4 liners in the classified section to full-folio spreads. With the widespread distribution of its now iconic catalog, JC Whitney was well on its way to becoming an institution.

February 1954 Pop Mechanics

Ah, the JC Whitney catalog: The pulp paper, the dense pages with tiny print, the minimalist line drawings. It is an interesting window into the automotive zeitgeist of the 1950s and 1960s. These decades marked the heyday of JC Whitney.

At the fourth dimension, JC Whitney yet sold a lot of what nosotros would later call "difficult parts." These are typically replacement items like alternators, brakes, body panels, and even complete engines, as shown in the ad above. Almost e'er made of steel or iron, hard parts are expensive to send, and have a relatively low profit margin.

But of course, information technology is not the hard parts that fabricated JC Whitney famous, but rather all those wild, wacky accessories. Dissimilar hard parts, accessories are inexpensive to make, purchase, and ship, and in later years were manufactured inexpensively in People's republic of china. Some of our most profitable accessories had gross selling margins upwardly of fifty%, and sometimes more.

Whether these gimmicks worked or not was nigh abreast the point. I'm sure deep down not many people expected paint on whitewalls to look as adept and last as long as the existent affair. They were selling the dream that Joe Lunchpail could have whitewall tires just like his snooty neighbors.

Whenever manufacturers added new styling, technology, or safety features, JC Whitney was always right behind to give wannabes in older rides the new car expect, whether information technology is the 1958 quad-headlight await for your 1957 car, or a third brakelight for your pre-1986 ride.

With their eclectic product mix and depression-budget outré, JC Whitney had something for everyone, and was able to bridge several otherwise not-overlapping automotive subgenres:

• The hardscrabble, down on their luck kinds, who need to go along their jalopy running with minimal cash outlay. After all, who else would need a VW hand starter?
• Those who wanted to accessorize their auto with styling cues and features of more than expensive cars.
• Those who wanted to individualize and customize their cars.

All were welcome under the JC Whitney tent. Income inequality? Not here. At JC Whitney, everyone tin can take a tertiary brakelight or continental kit on their car.

And and then information technology went, for several decades. By the 1970s, cracks were outset to show in the facade, as the combined forces of rising gas prices, primitive electronics, and emissions controls began to conspire to make information technology more difficult for the average owner to work on their car, a tendency that continues into the present day. Indeed, while researching this article, I discovered that JC Whitney filed for Chapter Xi bankruptcy in 1979, a fact not well known even to the employees of the company. Patently, they were able to successfully reorganize their debt, only these were the first hints of problem.

May 1992 magazine ad

By the 1980s and 1990s, the lower-margin hard parts began to disappear from the catalogs, replaced by an increasingly chintzy assortment of cheap (merely profitable) Chinese-made accessories, every bit the ad from 1992 higher up indicates. The tiny print and homespun line art were still there, just many of the products were now useless junk.

Roy Warshawsky retired from the business in 1991 and died in 1997. Roy'due south last surviving sister sold the visitor in 2002 to The Riverside Company, a private equity investment firm. At this bespeak, JC Whitney was no longer a family-owned visitor, but for the time beingness, was still Chicago-based. Although details of the transaction were never made public, informed speculation around the office was that the sale was for somewhere around the $60 million figure, for what that the time was a company with $170 1000000 in sales. This was already down from peak sales volumes n of $200MM in the '90s.

In 2006, Riverside made i concluding-ditch attempt to revitalize the business. Riverside acquired my employer, truck accessory catalog company Stylin Concepts and shoved us together in a shotgun marriage.

Riverside had correctly identified that the automotive aftermarket business organisation was ripe for consolidation and figured that JC Whitney would be the musical instrument for that consolidation. Towards that finish, they created Whitney Automotive Grouping as a kind of a parent holding company, with an eye towards other acquisitions and brand expansion. Riverside brought in a young, hotshot executive from Dell to boost our eCommerce street cred, and created a new vice-president of G&A (merger and acquisition) position. We moved into fancy new digs on the top flooring at the corner of Michigan and Wacker Bulldoze, right at the doorstep of Chicago's Magnificent Mile. In an effort to give the identify a startup vibe, the dress code was relaxed to jeans, and the de rigueur foosball table placed in the lobby forth with a video wall.

Roy was long gone by the time I joined the company, just his legacy was everywhere. Portions of his collection of antique gas pump globes and other automobilia however busy the office, along with pictures of some of the cars from his large personal collection of cars (with a particular fondness for thirty'due south luxury brands, including a V-xvi Cadillac one time owned by the Rex of Denmark). The conference room that housed nearly of these items was nevertheless called "Roy'south Garage."

We had all kinds of bang-up ideas, many of which were long-term bets that may take eventually paid off had we been able to wait it out. Among them:

• Install Pro – While Whitney long catered to the DIY (Do It Yourself) market, we idea we could carve out a new niche in the DIFM market (Do Information technology For Me). We gear up a network of installation shops (similar to what Tire Rack does), where the customer could pay for installation along with the production, and we would transport the parts directly to the installer. A good idea, merely nosotros weren't able to put enough endeavour into information technology to get together a large enough network of installers, nor were nosotros able to market it properly.
• carparts.com – JC Whitney's business concern was constantly under assault by what we chosen ankle-biters – modest fly-by-dark companies with a search engine optimized storefront and not much else: No inventory (strictly drop ship), no customer service, and none of our fixed costs. Carparts.com was our attempt to create a no-frills website in the aforementioned vein that could compete on cost with the ankle biters. In commutation for bargain basement prices, it had no phone number and outrageous restocking fees for returns. Information technology likewise made very little money.
• Sears at the time was trying to fashion itself into an eCommerce portal like to Amazon, so we entered into a co-marketing agreement where we would create and maintain the auto parts portal on sears.com, and nosotros would handle the fulfillment. In render, it seems, Sears got most of the profits, and we simply got some contribution dollars to fixed costs.
• Nosotros spent enormous sums of free energy looking at many potential concern acquisitions, ultimately without consummating a unmarried bargain.

Readers of this site will be well familiar with the concept of a flywheel. A similar concept applies to the core business concern of any company, which in Whitney's case was its core auto accompaniment business. A flywheel can take a tremendous amount of attempt to get spinning, but once it gets going, momentum volition keep it spinning greenbacks with petty to no investment for seemingly forever. Simply alas, flywheels eventually slow downward, and then information technology was with JC Whitney'southward. With all these efforts spent towards growing and expanding the business concern, the cadre business was withering away due to inattention faster than the new business concern opportunities were growing.

A funny thing happened on the road to recovery in 2008: The financial plummet that sparked the Nifty Recession intervened. Credit became not-existent, effectively killing whatsoever M&A activity. Worse, we were trying to reposition JC Whitney upmarket (with carparts.com moving in towards the lesser end) at the worst possible time. Remember the companies that were doing well between 2008 and 2010? Low-end consumer companies like McDonald's and Walmart. With JC Whitney, we had a brand name synonymous with cheapness, and instead of capitalizing on it, we were running abroad from it.

They however make this stuff?

Nearly that brand: Major companies spend millions of dollars promoting their make, keeping it top of consumers' minds. JC Whitney, on the other hand, spent virtually goose egg on branding, and every bit a result, it was quickly becoming an aging brand among the likes of Ovaltine or Prell. People kind of vaguely knew nigh JC Whitney, just information technology didn't really resonate anymore. Indeed, the about mutual reaction I got from people when I told them I worked at JC Whitney vicious into two categories: "My Dad used to buy from you," and "Yous guys are still around?" Not the kind of give-and-take association you want for your make.

Over the next few years, the cadre JC Whitney business continued to founder. Customers connected to age and die out of our mailing listing (whose average age was in their 50's). Sales continued to spiral downward to around the $120 million marker, as a whole new generation of buyers who had never heard of JC Whitey went to places like eBay, Amazon, and Google for their parts.

It is said that the only thing harder than managing growth in a business is managing decline. We were shrinking towards beingness a $100 one thousand thousand business, just we still had the toll structure of a $250 million business. We couldn't reduce our costs fast enough, then we ended up piling on debt. Nosotros were leveraged to the hilt: We borrowed against every asset we had, and had gotten to the point where we were essentially financing the business on the backs of our vendors. Equally we connected to delay payments to our suppliers, it had gotten to the indicate where some were refusing to sell the states products or extend the states any more credit. Anybody knew that the end was near.

At this point (around the summertime of 2010), Riverside announced to the earth that they were shopping for a buyer for WAG. Our ideal outcome would be an "affections investor" who would exist willing to make the necessary investments to revive our moribund brand for the 21st century. Our worst case would be a competitor who would shut the states down and strip the states of our 2 main assets – our brand and our customer list.

While we had numerous potential suitors come through our doors (including nigh of the major brick-and-mortar car parts resellers), in the end, the outcome was the worst-case scenario I outlined in a higher place. Rival competitor Usa Auto Parts ended up acquiring Whitney Automotive Group (along with all its debts) for $27.v meg on August 17, 2010. I idea this was a good toll; more than, really, than I thought what was essentially a break-even business was worth by the time y'all subtracted all the liabilities.

One time the deal closed, USAP moved chop-chop to reduce headcount, including the unabridged WAG executive team. I was one of the lucky ones (forth with well-nigh of my It team), who got to spend the next seven or eight months winding downward the Cleveland and Chicago offices, and migrating all the JCW systems over to USAP's platform. I must requite credit to U.s. Automobile Parts for how they handled the acquisition. I ever felt like an agile participant in the integration, and not just watching from the sidelines. They handled everything very professionally and made certain I was taken care of with a decent severance packet.

Us Auto Parts is not the villain of this piece, all the same. Whitney's wounds were self-inflicted, and USAP was merely at that place to scoop upward the pieces. USAP paid a heavy price for their buy: Whitney was in much worse shape than the brief discovery menstruation before the auction closed allowed them to fully realize. Their stock has been stagnant for the by vii years, and they are only now returning to profitability.

As I insinuated at the beginning of this commodity, JC Whitney however exists today, but only equally a storefront for US Auto Parts. Other than the proper name, at that place is no longer any connection to the Chicago-based company founded by State of israel Warshawsky 102 years ago. The Chicago role is long gone, although the distribution center in La Salle notwithstanding exists, along with the outlet store, they are both owned by US Auto Parts. The general print itemize, which was an enormous marketing expense, is by and large a affair of the past. Only two specialty books still exist, and they are for the largest and most profitable segments: Jeep and Truck. All the other specialty catalogs (Archetype VW, Motorbike, Auto) are long gone.

Postscript

July xvi, 2020: US Motorcar Parts Network (now rebranded as CarParts.com) announced that information technology is shutting downward the jcwhitney.com website and ceased all print catalog publication. JC Whitney will live on only as a individual label brand for some (presumably cheap) CarParts.com machine accessories.

Related Reading

Autobiography: Confessions of a J. C. Whitney Abuser -The iPhone of its Fourth dimension, or How to MM in Five Like shooting fish in a barrel Steps

Curbside Newsstand: JC Whitney to Cease All Sales

References

https://world wide web.hemmings.com/mag/hcc/2006/10/Roy-Warshawsky/1351501.html

http://multichannelmerchant.com/news/j-c-whitney-sold-01082002/

walkerdombant.blogspot.com

Source: https://www.curbsideclassic.com/blog/nostalgia/jc-whitney-the-rise-and-fall-of-an-automotive-icon/

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