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TOP 100 2013: R.S. Mowery, Primitives by Kathy experience giant upswings

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Kathy Phillips, CEO of Primitives by Kathy Inc., started the company in her garage in 1997. The company now has 125,000 square feet of warehouse and store space in Lancaster County.
Kathy Phillips, CEO of Primitives by Kathy Inc., started the company in her garage in 1997. The company now has 125,000 square feet of warehouse and store space in Lancaster County. - (Photo / Stuart Leask)

While there is still a Kathy behind Primitives by Kathy Inc., company products and annual sales are far from primitive today.

The East Lampeter Township-based wholesale home decor and gift company, which boasts 6,000 active items and a client list that includes many of the nation's top retailers — T.J. Maxx, HomeGoods, Marshalls, Nordstrom, Barnes & Noble and Hallmark — has grown to a $27.7 million operation.

Primitives by Kathy, which started in Kathy Phillips' garage in 1997, grew by 50 percent in 2012. The company has 125,000 square feet of warehouse and store space in Lancaster County, along with showrooms in Atlanta and Dallas.

"You surely don't expect that (type of growth)," said Phillips, an introvert who says it's still a challenge to step out and shake hands at trade shows.

The company was under $10 million in revenue until 2005 and dipped back below that market in leaner economic times in 2008 and 2009. It has more than quadrupled since then, according to Business Journal records.

How? Product turnover. The company changes up about 30 percent of its product line each year to keep it fresh and trend-oriented, Phillips said.

"I focus my time and efforts on product development," she said.

All of the design is done in Lancaster County. Phillips has a graphics team that helps create her vision, and prototypes are then shipped to manufacturing plants in China and India.

Today about 40 factories make her products, which also are sold to some 12,000 mom-and-pop gift stores around the country and abroad. The company's product line, which has morphed from a primitive country theme, has international distribution in the United Kingdom and Canada.

Phillips is constantly walking the trade shows and following decorating trends online and in print. She also draws plenty of inspiration from key accounts and colors or themes they are planning for various seasons and holidays.

"We'll apply our design sense and present products to them," she said.

Phillips, who worked with her mother in retail for about 10 years, said she has no desire to sell directly to consumers. A very small percentage of sales — about 1 percent — comes from the company's website, she said.

"With the volume we're doing, there is more to be had (in wholesale)," she said.

Plus, she would be stepping on the toes of her core customers.

With the economy picking up and consumer spending and retail on the rise, Phillips said her business is running about 35 percent ahead of last year's record pace for sales. Her focus is on growing her retail presence in untapped areas, such as outdoor chains like Cabela's and Bass Pro Shops.

"Our strength is custom development very quickly to meet the needs of new customers," she said

She also is planning to open a showroom in Las Vegas. In addition, Primitives by Kathy has considered diversifying the brand to include new collections such as Christmas by Kathy and Jewelry by Kathy.

"It's such a product company. If you don't have what the customer wants, you won't have the sale," she said.

Returning to form

Silver Spring Township-based R.S. Mowery & Sons Inc. also responded to market trends in a big way last year. The general contractor nearly got back to pre-recession revenue — $101.24 million in 2012 compared with $53 million in 2011 — by capitalizing on developer need for new warehouse inventory.

Last year, R.S. Mowery built a $40 million warehouse for California-based Panattoni Development Co. in the Key Logistics Park in Penn Township, Cumberland County.

That 1.4-million-square-foot facility was completed in November and is home to London-based home and personal care products distributor Unilever.

"We have seen an uptick in business, particularly from repeat clients that are now continuing to invest in their assets," said Perry Heath, director of business development.

In addition to the warehouse and distribution center opportunities along interstates 78 and 81, R.S. Mowery has seen growth in higher education, health care and senior living.

Heath noted significant opportunities at Bucknell and Susquehanna universities, as well as Wilson College.

R.S. Mowery also has done renovation work for several auto dealerships, Heath said, including projects for Freysinger Automotive Group.

"We think it looks like it can be sustained," he said. "There is more and more opportunity in the private sector. Everything we're doing is in the private sector."

Until the recession, the Cumberland County firm had a 12- to 18-month backlog in projects, Heath said. The company has regained a backlog of about 9 to 12 months.

One is a $25 million to $27 million athletic project for a school in Bucks County. R.S. Mowery also is pricing about 3 million square feet of warehouse and distribution space spread across multiple sites.

If any of that work comes to fruition, it's going to be another good year for the company, Heath said.

On the List

See Primitives by Kathy Inc. at No. 75 on page 22.

See R.S. Mowery and Sons Inc. at No. 25 on page 17.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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