Fenchel Lampshade Case Study

We're America's Favorite Lampshade Company

At fenchelshades.com, we encourage and embrace your creativity by manufacturing custom lamp shades and replacement lamp shades according to your dimension and fabric specifications, and not according to what we think the next trend will be, making the design possibilities that we can offer virtually endless! It's a philosophy that's a bit out of the ordinary, but one that we believe best serves your needs.

Our limitless design potential is highly-valued and has greatly contributed to the growth and diversification of our client base, which includes the retail, hospitality, interior design, direct consumer and commercial markets, as well as do-it-yourself related publications and television network programming, like Martha Stewart Weddings, HGTV and the DIY Network.

All of our finished lamp shades are hand-crafted right here in the United States. Round, oval, square and rectangular formats can all be accommodated, and an always-growing selection of fabric styles are available from which to choose.

We pride ourselves in our fast production turnaround time, our no minimum purchase requirement and our simple, by-the-inch pricing structure, which renders the most reasonable lamp shade prices in the industry!

Let us bring your design ideas to light with customized Fenchel Lamp Shades. Your style is our inspiration--limitless designs, limitless possibilities!

Enjoy!

We've been doing this a very, very long time
Fenchel Lampshades, in business since 1925, is a national brand of lampshades available at most furniture stores. Often, these stores have their own private-label brands, but we do the manufacturing for them.

Fenchel shades are also well known in the hospitality industry. Interior designers love the Fenchel brand because they can get any size shade they need in a day's notice. For many years, our shades have been featured on HGTV. If you've ever been to a wedding costing over $50,000, it's likely that our shades were above your table. If a lampshade doesn't say "Made in China" it probably was made in the USA by Fenchel.

We supply most of the largest hotel chains with our shades. A typical hotel room has at least 5 lampshades in it, and these are replaced approximately every 5 years. Many thousands of our shades are made each year just for the hotel industry.

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Flenchel Lampshade Company

Case Analysis

Summary

Steve and Michele Rogers heartiest wish was to own their own business, which they could seebeing true as they found a business about their choice, which was well appealing for them,according to its previous cash flows, and accounting history and market it was operating in.

They wanted to buy “Fenchel Lampshade Company”

which was managed by 65 year old

Kenneth Fenchel 

whose father and uncle had founded the company in 1926. The companymanufactured the premium price lampshades with total sales volume about $1million.Steve and Michele both were graduates from Harvard Business School, and were doing well intheir respective jobs. Steve currently was consulting at Basin & Company in Boston, andMichele was in admissions office at Harvard Business School. Both of them will have to leave

their respective jobs if they opt to own the “Flenchel Lampshade Company”.

Fenchel Placed a $800,000 total value of the company and insisted that all money to be paid upfront. For Steve and Michele this was an unacceptable demand, given the inevitableuncertainties associated with taking over any business and with out seller financing it mightalso be much more difficult to arrange other elements of the financing plan.Steve was convinced that he could get the Fenchel family to take a $75,000 note back for partof the agreed-upon $745,000 purchase price. He and Michele were prepared to invest$50,000 of their own money as a starting point. With respect to the other capital, there werea number of options.

Steve could get Small Business Administration loan up to 85% of the principle amount.

The city of Chicago had a program of debt financing from which Steve hoped to raise$100,000.

$50,000 from State of Illinois loan program.

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