Reviving Red Wing
By Nick Woltman
St. Paul Pioneer Press
RED WING, Minn. — Along U.S. 61 in Red Wing are two businesses that each represent half of the city’s once-great eponymous pottery company: Red Wing Stoneware — an earthenware manufacturer on the western edge of town — and Red Wing Pottery — a retail salesroom that has been operating since the 1950s.
For the first time since 1967, they’ll be one business again. Red Wing residents Bruce and Irene Johnson bought both of them late last year. Beloved by collectors, and with a history inextricably linked to that of its namesake city of 16,000 people, Red Wing-branded pottery has existed for 140 years.
The Johnsons are keenly aware of this legacy and its importance to the community. They hope to be good stewards of the brand, but to ensure its survival they’re going to have to reinvent the business.
Plenty of others have an interest in seeing the Johnsons succeed. First, there’s the town, where the retail shop and the pottery (the common name for a factory that produces ceramic products) are big tourist draws.
Then, there’s the base of die-hard collectors who are watching this trajectory very carefully.
“There are people who collect very specific things and people who want one of everything,” said Stacy Wegner, executive director of the Red Wing Pottery Collectors Society, a nonprofit group headquartered a few blocks from the old factory.
Then there are members of the Gillmer family, most of whom have moved away from Red Wing. Their legacy with the business goes back more than 70 years.
Scott Gillmer, who sold the retail side of the new business to the Johnsons in November, still keeps in touch. He is hopeful for the future of the business his family helped build.
But first, changes must be made.
“If we don’t grow, we’re going to be obsolete,” Bruce Johnson said. “The market is out there.”
Commercial pottery was a cornerstone of Red Wing’s economy for roughly a century, but the area’s prominence as Minnesota’s ceramics manufacturing hub was millions of years in the making.
The Pleistocene glaciers that worked their way across the area left rich clay deposits in the hills around the Hiawatha Valley, where the town is situated along the Mississippi, about 40 miles southeast of St. Paul.
German immigrants began making traditional salt-glaze stoneware — mostly jugs, crocks and bowls — from these clay beds in the early 1860s. It quickly caught on, and commercial potteries began popping up.
The Red Wing Stoneware Co. was incorporated in February 1877, and opened a factory along the banks of the Mississippi the following year.
Over the next 15 years, two major competitors emerged within blocks of Red Wing Stoneware — the Minnesota Stoneware Co. in 1883, and the larger North Star Stoneware Co. in 1892.
To compete, the two smaller firms — Red Wing Stoneware and Minnesota Stoneware — formed a cooperative in 1894, selling their wares under the name Red Wing Union Stoneware Co.
This venture proved so successful that the cooperative was able to buy out North Star in 1896. The two remaining Stoneware companies merged fully in 1906, operating as Red Wing Union Stoneware.
But both plants continued to operate independently — one called Factory M (for Minnesota Stoneware) and the other Factory R (for Red Wing Stoneware) — until the mid-1940s, when Factory R was razed. The Red Wing Pottery retail sales room was later built on the factory site.
Over the next couple of decades, the company expanded its manufacturing line from strictly stoneware — crocks, butter churns, mixing bowls and flower pots, among other products — using local clay, to incorporate dinnerware made with imported materials.
By 1936, the company’s stoneware line had ceded enough ground to its dinnerware line to necessitate a name change. That year, the company became Red Wing Potteries Inc. It would phase out stoneware completely by 1947.
The next decade was marked by relative stability for the company, which boasted revenues of between $1 million and $2 million annually.
But beginning in the early 1950s, a combination of market forces and labor issues began a cycle that would prove disastrous for the company.
‘Potteries is dead’
As cheaper imports — largely from Japan — began displacing American-made ceramic goods on department store shelves, potteries began going under in the United States.
Between 1948 and 1954, the number of potteries operating in the U.S. dropped from 24 to seven, according to a trade publication. The industry shed nearly 8,000 jobs — roughly two-thirds of its workforce.
As Red Wing Potteries began seeing more red ink in its ledgers, the company’s shareholders ousted one president after another.
In 1958, they promoted Richard A. Gillmer, Scott Gillmer’s grandfather, to the position. Gillmer had gotten his start with the company as a sales representative in 1942.
He immediately began cutting costs, eliminating 27 administrative employees and keeping a close eye on the company’s spending.
According to a book by Gillmer’s son, Richard S. Gillmer, the belt tightening breathed “new life” into the company, though profits continued to shrink over the next decade.
In 1967, the company’s contract with its unionized workers was set to expire, and through negotiations that summer, the two sides could not come to an agreement.
The elder Gillmer was unable or unwilling to raise his employees’ pay — a base rate of $1.70 an hour — to nearer the industry average of $2.57 an hour.
Red Wing’s workers walked off their jobs on June 1, 1967, shutting down production. It would never resume.
The bitter and ugly strike lasted 85 days and divided the community. The company’s shareholders voted on Aug. 24 to liquidate the company.
The following day, the Red Wing Republican Eagle broke the news with a headline that covered two-thirds of its front page: “Potteries Is Dead.”
Richard A. Gillmer, who by then owned more than 50 percent of the company’s stock, used the proceeds of the liquidation to purchase the retail showroom, which was across the street from the factory for $76,000. He kept it open to sell off the company’s remaining inventory, which he also bought.
The store proved so successful that he decided to continue running it even after the remaining Red Wing stock was sold off.
The storefront operated under the name Red Wing Pottery; it began trafficking in dishware made by other companies.
Richard S. Gillmer and his sister, Susan, assumed ownership of the store when their father retired in 1978. Susan Gillmer took over its day-to-day management.
Under Susan, the company diversified its sources of revenue, opening Loons & Lady Slippers, a gift shop, next door to the showroom.
In 1984, John Falconer, a trained potter who had recently moved to Red Wing, bought the rights to the Red Wing Stoneware name from the Gillmers. Under it, he opened a pottery in a pair of old farm buildings, and ceramics once again were being manufactured on a large scale under the Red Wing name.
By 1990, he had moved into a new 8,000-square-foot production facility with another 2,000 square feet of showroom and office space.
About that same time, the Red Wing Pottery retail store was again being passed down through the Gillmer family, this time to Richard S. Gillmer’s son Scott.
Scott Gillmer began to see big-box retailers like Target and Walmart carrying the same products as he was, and — buying in bulk — they could afford to sell at prices well below his.
“All of the sudden there was more competition for our little store,” Scott Gillmer said.
He decided to set Red Wing Pottery apart by emphasizing its history. He set up three full-time potters in the back of the store, hand-turning old-fashioned salt-glaze stoneware on a small scale.
He also struck a deal with Falconer to become the exclusive retailer of Red Wing Stoneware’s products in the city.
‘On the rebound’
This relationship continued even after Falconer sold Red Wing Stoneware to local businessman Tom Woodruff in 1998.
By 2007, the market for pottery had begun to contract, and Woodruff found it difficult to keep the store in the black.
“From 2007 to 2013, it was tough — real tough,” Woodruff said. “I think the market’s on the rebound now, though.”
Even so, as he approached retirement age, the 59-year-old Woodruff began thinking seriously about selling the business to “some new blood.”
Across town, Scott Gillmer was considering putting the Pottery up for sale, too.
Gillmer was finding it increasingly difficult to compete with the big-box stores. Additionally, dinnerware manufacturers such as Mikasa and Pfaltzgraff had begun opening suburban outlet stores.
Consequently, customers had plenty of more convenient — and cheaper — places to shop for their everyday dishes. The only way forward Gillmer could see was to ramp up the store’s stoneware manufacturing efforts and get out of mass-produced dishware — something he didn’t have the money to do.
Enter Bruce and Irene Johnson — native Minnesotans who have lived in Red Wing since 2003.
After spending five years helping build a software company called Recombinant Data, Bruce and his partners sold the business to professional services firm Deloitte.
Tired of spending 90 percent of his working hours on the road — Recombinant Data was based in Massachusetts — he and Irene decided to use the proceeds from the software company sale to go into business for themselves in Red Wing.
“I called Minnesota home, but I lived in hotels,” Bruce Johnson said of his career at Recombinant Data.
Irene had been working part time for Woodruff at Red Wing Stoneware for eight years, and in June, the couple approached him with an offer for the company. Six months later, they had a deal.
Just as the Johnsons were about to close on the sale, Scott Gillmer approached Woodruff about buying the Red Wing Pottery storefront from him.
Although he wasn’t interested, Woodruff related Gillmer’s offer to the Johnsons, who decided to contact him after they got the Stoneware up and running. The Johnsons were hoping to continue — if not grow — the partnership the two businesses had.
But the day after the Johnsons closed on the Stoneware business, Scott Gillmer announced that he would have to sell the Pottery business, or — failing that — close.
“I thought, ‘Oh, he’s really serious about wanting to sell,’ ” Bruce Johnson said.
The Johnsons wasted no time in calling Gillmer, hoping to help him find a buyer so the store could remain open. This proved more difficult than they’d expected, and after a couple of weeks it was clear to the Johnsons that, to save the Pottery, they would have to buy it themselves.
A man named Clay
By late December, the Johnsons were the new owners of two struggling businesses in an industry that, as many of their friends pointed out, wasn’t exactly booming.
“We knew we had our hands full here,” Bruce Johnson said.
They temporarily closed the Pottery retail store to focus their attention on retooling the stoneware factory — which turned out to be tricky.
“I think the biggest challenge was probably the lack of process on the production and manufacturing side,” Bruce Johnson said. “It was somewhat chaotic.”
Potters were working on items that didn’t have customers waiting for them, while orders they did have were going unfilled.
The pottery that was awaiting shipment was laid out on shelves, loosely categorized.
“It had a lot of production problems,” Woodruff said of the stoneware business. “I guarantee Bruce is going to solve the problems I couldn’t solve.”
To that end, the Johnsons brought in some help.
Eric Clay, who contracts as a business consultant under the name Clay’s Innovative Logistics, is a former Army captain whose most recent job was coordinating 300-vehicle motor pools in Iraq and Afghanistan.
He’s using many of the skills he learned in the Army to overhaul the stoneware’s production controls.
“The goal is to eventually work myself out of a job,” Clay said. “At the end of the day, there shouldn’t be a reason for me to be here.”
One of the first things he did was reorganize the shipping area, moving high-volume items closer to the door, and labeling the shelves with barcodes corresponding to the company’s roughly 2,000 products — even attaching photos of each item for new employees.
He also streamlined the company’s manufacturing operations, starting with creating a production schedule that prioritized items with the highest profit margin.
To continue this work, Clay recommended the Johnsons hire a demand planner, which they did last month. Once Clay finishes training her, he estimates he would be able to wrap up his work in two weeks.
Internet and inventory
Another of Clay’s recommendations was the installation of a networked point-of-sale system that will tie the Stoneware and the Pottery together, syncing their inventories and making sales numbers easier to track.
Johnson hopes to have the point- of-sale system running by the time he reopens the Pottery in late spring or early summer — just in time for the annual convention of the Red Wing Collectors Society, which is held in Red Wing each July.
The 3,600-member organization also is planning a pottery museum in the original Minnesota Stoneware building, now called Pottery Place Mall, to open around the same time.
But the point-of-sale system will be among the least noticeable changes the Johnsons will have made to the Pottery.
Gone will be the mass-produced dishes and glassware the store has carried for decades. The only non-Red Wing dinnerware the shop will carry will be Fiesta ware, Johnson says.
The rest of the shelf-space will be occupied by goods manufactured at the Stoneware across town -- the iconic earthenware the company is known for.
He also plans to use the two potter’s wheels in the back of the store for pottery education programs.
The Johnsons also are looking to expand the market for their products nationally through their website.
Although the store has had an Internet presence for several years, it has never been a significant source of sales. The Johnsons are hoping to change that. Bruce Johnson is already working to create a complete online catalog and an Amazon.com-style check-out system.
He’s also eyeing the branded merchandise market — making small-batch custom pieces for business clients. The company just rolled out an order of stoneware wine goblets for the Contented Cow, a restaurant in Northfield.
The Johnsons expect to more than double the Stoneware’s annual revenue during their first year running it. His goal for the Pottery is more modest — a 25 percent increase in sales over the first year.
“There is demand for the product,” said Scott Gillmer, the former owner. “My greatest problem was that I couldn’t meet that demand.”
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