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'Chainsaw' to sell Sunbeam
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October 23, 1997: 5:09 p.m. ET
Controversial turnaround executive declares victory at appliance maker
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NEW YORK (CNNfn) - Sunbeam Corp. Chairman Al Dunlap declared victory Thursday in his stewardship at the home appliance maker and said he is putting the company up for sale.
On Wednesday, Sunbeam said it had solid earnings of $34.5 million, or 39 cents per share, for the third quarter. That compared with a loss of $18.1 million for the same period one year ago. Dunlap took over the company about 15 months ago.
"Having successfully completed the turnaround of Sunbeam and being well on our way to dramatically growing the business, we feel that the timing is right [for a sale]," said Dunlap.
To that end, Sunbeam has retained Morgan Stanley & Co. Inc. to serve as its financial adviser while looking for a buyer.
While Dunlap has been at the helm, Sunbeam has raised its international sales by 50 percent and its domestic sales by 23 percent.
Sunbeam, based in Delray Beach, Fla., makes household appliances under the brand names Sunbeam and Oster.
Dunlap has earned a reputation taking over struggling firms and gained the moniker "Chainsaw Al" by cutting costs and also thousands of jobs. At Sunbeam, he cut about half of the company's 12,000 employees.
Sunbeam tangled with the American Medical Association in August after the AMA withdrew its endorsement agreement for some of the company's products. Sunbeam consequently sued the AMA for $20 million.
Despite his sometimes bad reputation, Wall Street has loved Dunlap, pushing Sunbeam stock (SOC) to more than $48 per share Thursday from about $12 at the beginning of his tenure.
Prior to joining the Fort Lauderdale, Fla.-based company, Dunlap had similar success at Scott Paper Co. As a result of his cost-cutting, Scott's stock skyrocketed nearly four-fold in less than two years.
Executive recruiters speculate that because of his success in leveraging consumer brand names, Dunlap would be an ideal candidate for companies such as Ben & Jerry's.
"Companies that start off with great identification and then, for whatever reason, are lost in the eyes of consumers" would be suitable places for Dunlap to lead next, said Eric Segal, president of Kenzer Corp., which specializes on the retailing sector.
"When you hire him, he comes in with a strategic mind and great analytical skills," Segal said.
Still, his short-term approach often leaves companies that he advises without a long-term strategy, as in the case with Scott Paper Co.
After turning around Scott, the company was eventually sold to Kimberly-Clark Corp. for $9.4 billion, giving Dunlap $100 million for his efforts.
"I would say that based upon the track-record … he doesn't see himself as a long-term player. He really comes in as a specialist doctor, not a general practitioner," Segal said.
-- by staff writers Randy Schultz and Robert Liu
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