THE Promise Keeper

In 2001 when Berkshire Hathaway purchased Benjamin Moore Warren Buffet promised independent retailers that THE brand would forever remain in their exclusive purview. 

Years later when Benjamin Moore CEO Denis Abrams tried to make a liar out of Buffet Berkshire’s security detail escorted him from the company’s headquarters, the New York Post reported at that time that Abrams was heard muttering “what did I do wrong?” as he was exited from the building.

As if that was still the point. 

The Post also reported that Abrams had been ousted for his lavish spending, taking company executives on a pricey cruise to Bermuda against a backdrop of layoffs and declining sales.  A let them eat cake optic befitting of Abrams’ tenure.

Though that’s not what got him fired. 

What Abrams did wrong was make a deal to sell Benjamin Moore paints through Lowes stores nationwide, news which travelled from Montvale to Omaha—likely in the pocket of a whistleblower. 

That Abrams did not know what he had done wrong as he was escorted from the building goes a long way towards explaining his tenure, five-years which remain among the darkest in that company’s 142-year history.   

Sailing to Bermuda with Abrams that year was a young Vice President of Sales, already a 20-year veteran of the company though his time had yet to come.   

But after Abrams and some more dark days his time would come and in 2019 that VP of Sales was named THE company’s chief executive. 

And keeper of Warren Buffett’s promise.

At Berkshire’s annual shareholder meeting in Omaha last week Buffett announced his retirement as CEO of the conglomerate he founded.  In the crowd when he did was Benjamin Moore CEO Dan Calkins.   

Now steeped in Berkshire’s processes Calkins has no thought of a deal with Lowes or Home Depot, having learned from history’s greatest investor that independents add more. Allowing Calkins to double Ben Moore’s size, as independent home improvement retailers continue to regain market share from the behemoths. 

Beyond that increase and Buffett’s promise, Benjamin Moore has higher profit margins than most (all?) paint manufacturers, allowing the industry’s most stable and profitable platform for independent paint retailers.

For as long as Berkshire owns it.

Someone Had to Tell Him

Also staying dry under Calkins’ umbrella are the more than half of all Pittsburgh dealers who also stock Benjamin Moore.  Protected by Buffett’s promise and imbibed with the confidence that most (all?) of their Pittsburgh volume could be transitioned to Benjamin Moore were they ever to have that need.    

Circumstances which a recession could easily create. 

Because during a recession smart retailers will look to reduce inventory, right sizing their investment to reflect changes in demand.  Likely leaving Pittsburgh standing out in the rain.

In heady times products like Speed Hide and Ultra Spec can work complimentarily, deepening a store’s appeal in the market while expanding dealer profit margins as the two manufacturers offer discounts to gain shelf space and volume. 

But as demand recedes, retailers may find that they do not need both.  Bad news for Pittsburgh whose dealers already have questions about that brands longevity.

Not to mention its availability at Home Depot.

Hastening those decisions will be the frustration of Pittsburgh dealers who have waited more than six-months since private equity firm American Industrial Partners acquired that brand and still have no answers to their most pressing questions.  To wit: Can dealers depend on stability in ownership long enough to justify maintaining that brand? And what will be done to untie the knot left by PPG? THE one which leaves dealers to compete with both big box and company owned stores for their share of that brand.

In ignoring these questions AIP abandons all pretense of an operational strategy leaving this to look like just another private equity flip thus relegating Pittsburgh to also ran status for any dealers who also stock Benjamin Moore.       

When given the chance to address those concerns Pittsburgh’s newest CEO Brian Carson demurred, perhaps as unaware of his problem as Denis Abrams on that fateful day? 

Asked by HBS Dealer magazine recently about his priorities for 2025 Carson first mentioned the Drippy P before waxing poetic about the company’s new tagline leaving more ponderous unanswered. 

A paint neophyte, Carson may not be aware that without untangling his brands so that each maintains exclusivity in their own distribution channel it’s unlikely independent retailers will regain confidence in Pittsburgh.  And while working from that ill-fated strategy’s ground zero in Cranberry, it strikes me as unlikely he’ll ever get that message. 

But someone had to tell him! 

On Friday my fiancéeic and I depart for on a two-week sojourn with stops in London, Budapest and Vienna.  I won’t be blogging while away but if I can manage the technology you might get a new podcast episode each week while I’m gone.  Otherwise you’ll hear from me again when I return.