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Interview


for 25 percent of its U.S. sales last year. Trepp says one reason for the that growth is the company’s efforts to communicate with customers. “It used to be in the very early days [of


the internet] that you would put your prod- uct up online and get a number of sales,” he says. “Now, you are in a very heated battle with your competitors to make sure that, when a consumer goes in to look at a coffee maker, you are in full discussion with them.” That focus has “allowed the Hamilton


Beach brand to be the No. 1 selling small- appliance brand through the e-commerce channel through 2017,” he says. The growing e-commerce trend,


however, has reduced foot traffic at Kitchen Collection stores, which are located primarily at outlet malls. The retail chain recorded a net loss of $2.9 million in HBBHC’s second quarter as revenue declined to $22.8 million from $25.9 million in the same quarter the year before. Kitchen Collection has culled under-


performing stores while negotiating with landlords for shorter-term and more favor- able leases. In the first six months of this year, the number of stores declined from 210 to 199. Trepp says that number even- tually will decline to 100 to 150 stores. “Kitchen Collection has certainly


been through a tough few years. Sales have been declining,” he says. “What I feel really good about is that we have a really strong team at Kitchen Collection who has done a good job trying to adjust with the times. We downsized the stores to 199, and while doing that, very importantly, we’ve protected very strong gross margins. We’ve been around 40, 45 percent gross margins,” he says. Excluding Kitchen Collection,


HBBHC’s portfolio of brands includes Hamilton Beach, Proctor Silex, Weston and Hamilton Beach Professional plus licensed brands Wolf Gourmet and CHI. Last year, 87 products were introduced. Trepp says about three times that many products are in the development pipeline. “One of our keys to our culture is


called good thinking. If you are developing a new product, you talk to consumers, see what is important to them. What are their pain points and how do you solve their pain points?” he says.


52 NOVEMBER 2018


“If you are developing a new product, you talk to consumers, see what is important to them. What are their pain points, and how do you solve their pain points?”


— Gregory Trepp


Six employee teams — whose mem-


bers represent areas such as marketing, engineering and design — are responsible for developing products in a variety of categories, such as cooking or beverage. Each Thursday, teams make their case for product ideas to a group of executives. This review, which resembles a pitch


competition, begins a three-stage process in which teams getting an initial green light continue working on their proposals. At the third stage, “you’re approved


to go. You have all the funding you need. Now all you have to do is development,” Trepp says. “The key is that those team leaders are driving that innovation … as opposed to it being one person because that is not a healthy long-term business strategy.” Trepp joined Hamilton Beach in 1996.


He had attended college in Richmond, earning a bachelor’s degree from the Univer- sity of Richmond. He holds an MBA from the University of Connecticut. Trepp and his wife, Ann-Marie, have


four children, two sons and two daughters. The three oldest children are in college. The youngest child is in sixth grade. The Trepps are supporters of the Anna


Julia Cooper Episcopal School in Rich- mond, which provides full-tuition scholar- ships to fourth- through eighth-grade students with limited economic resources primarily from the city’s East End.


Virginia Business interviewed Trepp


at his Richmond office on Sept. 5. The following is an edited transcript.


Virginia Business: What is your timeline to increase your [Hamilton Beach Brands business segment] rev- enue to a billion dollars? Trepp: If we can get to the $750-million- to-a-billion-dollar range, to get a 9 to 10 percent profit for the Hamilton Beach business, it will get us to a much stronger leadership position in our industry. We implemented a number of strategic initia- tives back in 2012. We’ve been adding a few [more] as time goes on. Those are really starting to help drive growth on a quarter-to-quarter and year-to-year basis. We haven’t set an exact timeframe, but we feel that we can get into that $750-million-to-a-billion-dollar range in the not-so-distant future. Then we’ll go from there.


VB: Let’s talk about your growth initia- tives. One that caught my eye was the “Only the Best” strategy. Would you give us some explanation of that? Trepp: You’ve probably heard of the term “good, better, best.” Hamilton Beach and Proctor Silex are brands that are plus- or-minus 100 years old. They are very well known, very well respected and have


Photo by Caroline Martin


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