Minnesota-based Mills Fleet Farm courting suitors for potential sale
BRAINERD --Mills Fleet Farm may have a new ownership later this year or early in 2016. Mills Fleet Farm confirmed this week it is in the process of looking at a large pool of business suitors to find the right one to take the company to the next ...
BRAINERD -Mills Fleet Farm may have a new ownership later this year or early in 2016.
Mills Fleet Farm confirmed this week it is in the process of looking at a large pool of business suitors to find the right one to take the company to the next level of growth for the future.
The family company, which makes its headquarters in Brainerd, first started serving customers as Fleet Wholesale Supply in 1955 and now employs about 6,000 in Minnesota, Wisconsin, Iowa and North Dakota. The company's 36th store is currently under construction in Hermantown, near Duluth, and will continue for a planned 2016 opening.
Stewart Mills III said no final decisions have been made on what a transaction would be at this point, but it's more than likely the Mills family would be leaving the business with this transition. The Mills Automotive Group, with 12 franchises, is not part of this transaction.
"We have several interested parties, but we are sorting through those interested parties to make sure they are the best fit for us organizationally and also the best fit for our employees," Mills said. "We care very much about our employees and we want to make sure whoever the new owners are they take very good care of them. (The employees) have taken very good care of us."
Mills Fleet Farm's employees learned of the news in company meetings hosted at each location last Friday.
Mills said the company reached a point where, in order to continue to grow at a speed to be competitive, it needs to look for outside sources for capital and can't continue to finance growth solely through its own checkbook. Mills said they could sustain a much slower growth rate, but they know the business potential is there for more and the decision to move forward was made by the family as a group.
"For the long term, this is what is right for the business, this is what is right for our employees," Mills said. "It's a very, very painful decision for the Mills family."
But Mills said the other stakeholders in the business have to be taken into account and put first and foremost-customers, employees, suppliers and the communities the business serves-ahead of the family. The company was started with the idea of combining products for "life, work, home and recreation" all under one roof. But the family name and business activity goes even further back. Stewart C. Mills Sr. founded Mills Companies when he purchased the Lively Auto Company in Brainerd in 1922.
Looking at the total picture-the company's past success and where it could go-at a certain point the decision has to be made that is right for the business, Mills said. The company's warehouse and distribution system needs a significant upgrade requiring considerable capital investment to remain competitive, he said. With a modernized warehouse and distribution center, Mills said he personally could see a growth of three or four stores annually.
An outside consultant was brought on board to look at different options and the family company came to the decision selling the business was the best alternative for the business itself, the employees and communities served. The company ownership has been considering options for months. Once it was known in the business industry there was an investment potential in Fleet Farm, suitors called and asked to be added to the list of interested parties.
"In the last several years business has been extremely strong and that strength has been enhanced by very successful new store locations," the company reported in a written statement. "Continual reinvestment back into Fleet Farm has fostered that healthy growth. Fleet Farm has now reached a point where to continue that necessary pace of growth, it needs to look for outside sources of capital in order to remain competitive and keep creating and maintaining good paying jobs with excellent benefits. To ensure the strength of business going forward, the company is in the process of bringing in an outside partner to work with and enhance the current management structure.
"This very, very tough decision was made because it is ultimately in the best interest of our wonderful team members, the company and Fleet Farm's ability to meaningfully impact the many communities it serves. The possible transition to new ownership structure will create additional opportunities for our team members and allow Fleet Farm and its team members to prosper while continuing to meet the needs of our customers for years to come."
From the beginning, the Mills ownership has been a quiet but strong philanthropic force in the community from support for the Fourth of July parade, to honoring the fallen and the survivors of the Bataan Death March, providing area scholarships, and donating to individual requests by those who want to make a community difference even as they are suffering from the final stages of terminal cancer. The family has supported Shriners Hospitals for Children and The Salvation Army, among other charities through the generations.
"The Mills family isn't going anywhere and our philanthropic efforts are still going to be here for the community," Mills said.
Mills said no one had a crystal ball, but he believes any new ownership would retain the name because the brand is so strong. He added the family is proud of the company, its legacy and its economic impact throughout the Midwest and the thousands of jobs created. In the end, he said, the family company had to make a hard decision and it was based on what was best for the employees and the growth of the company. Mills said he thinks people understand this is the next progression for the business.
Mills said he will no longer be involved in the company as the transaction is completed, probably sometime next year. The potential sale of the business, he said, has nothing to do with his political aspirations. Discussions on the company's future predate his interest in politics, Mills said. He ran for the Minnesota 8th District congressional seat in 2014 and expects an official announcement on his intentions for the next election within the next two weeks. Mills said his personal intention for his future is to engage in "very quiet philanthropy, but also very loud public service."
Brainerd Lakes Chamber of Commerce President Matt Kilian said it was his expectation any new owners should have the same bonds with the community as the Mills family.
"Mills Fleet Farm is the ultimate business success story in the lakes area," Kilian said. "It's a family-owned company with family values. They have a deep-rooted commitment to their employees, to the community and to the economy."