LINCOLN, R.I. — In the spendthrift '80s, success for A. T. Cross Co. flowed as smoothly as the ink from one of its gold-filled pens.
Sales and earnings rose about 60% from 1986 to 1989 alone.
But business growth faltered as the new decade began, and it worsened during the recession.
"Everything that could possibly be right was right" for Cross in the 1980s, said Harry Wells, an industry analyst with Adams, Harkness & Hill in Boston. "You're probably never going to get that kind of environment again."
In retrospect, Cross executives say they made a few mistakes over the years, such as being too cautious entering the higher-priced pen market and not keeping tighter reins on the company's retail subsidiary.
Chairman Bradford Boss--who runs the 145-year-old company with his brother, Russell, who is the president--promises that Cross will bounce back to 12% yearly growth. But some analysts are skeptical about a decade that began with economic aches and pains.
As Merrill Lynch & Co. analyst Larry Rader put it: "Is the era of Gucci, Pucci, schmucci going to come back? Or is it over?"
Cross sales rose 60% from 1986 to 1989, to $247.4 million, and earnings jumped 68%, to $36 million. But 1990 sales were down 10%, to $222 million, and earnings fell 24%, to $27 million. This year's first quarter showed little improvement, with earnings falling 32%, to $2.5 million, or 15 cents a share, from $3.7 million, or 22 cents a share. Quarterly sales declined to $47 million from $48.7 million.
Cross had seemed to make all the right moves: It expanded overseas, diversified into leather and other gift goods, and maintained a commitment to quality evidenced by the lifetime guarantee on its pens.
But Boss, 59, a director since 1960, can tick off a list of things he should have done; chief among them would be maintain a tighter rein on the Mark Cross leather retail chain, where sales were off 22% last year.
"I might have been a little more hard with them in some of the things they were doing," Boss said. "We could have demanded certain things, but it's not really our style."
Managers at both Mark Cross and Manetti-Farrow, a leather products distribution subsidiary where 1990 sales were down 38%, have been replaced.
Boss also says the company, which did not introduce its pricier Signature pens until last fall, did not enter the market for pens priced at more than $100 fast enough.
"We missed it, I'll be very honest with you," Boss said. "Maybe we just didn't focus on it enough, and I have to take the blame for it."
Overseas sales remain encouraging, though. They increased 8.9% last year and now account for more than 31% of total sales. Cross markets its pens heavily in Japan, Germany, England, Spain, France and Ireland.