Hudson Fastener Rethinks Nuts and Bolts

YOUNGSTOWN, Ohio -- In 1992, Lisa Kleinhandler took over Hudson Fastener, a business that distributed structural nuts, bolts and screws that had been in her family since the 1940s.

“The only thing I didn’t understand was fasteners themselves,” she says with a laugh. “But if you have the gift of gab along with some others skills, you can learn that.”

Kleinhandler was a quick learner. More important, she had a vision for what Hudson Fastener could become and how to make it last and assure its future. The business likely would be unrecognizable to Emanuel Kleinhandler, who founded it in 1946 along the Hudson River in New York.

At the beginning, Hudson Fastener found itself ideally located to serve the Long Island area; at the time much of the city was being rebuilt. Kleinhandler’s father, Eugene, took over the company from her grandfather and the warehouse became a place of fond memories for the young Kleinhandler.

“I used to box fasteners by the gross. Now they box them by the hundreds,” she recalls, “but I remember when we boxed them by the gross.”

In 1996, Cris Young came to the company from Boston, bringing with her the idea to start using technology to make the business more efficient.

“It was tough back in the beginning. We had no computers. We did everything by hand,” Young says.

One of Young’s first idea’s was to change the way the company accounted for inventory based on the system Emanuel developed years ago. The granddaughter resisted the idea because of her sentiment for her grandfather. “I thought, ‘No way you’re getting rid of my grandfather’s cards.’ ”

The system consisted of a huge wall of drawers filled with index cards, one card for every item held in stock. Each card was handwritten in pencil and listed the number of items in stock and their location.

“And if you took some out, you would cross out the number and then you’d write how many you had now on the next line,” Kleinhandler remembers.

“And you had to re-count everything every time,” adds Young.

Today they talk about it the way people talk about the clothes they wore in the ’80s – slightly uncomfortable but pointing out the fashions of those times.

But it wasn’t until the late ’90s that the idea for the future of the company came to them, the inspiration written on the wall of another business headquartered nearby.

“We would drive by the headquarters every day and we would look at the name on the side of the building, ‘1-800-FLOWERS,’ ” Young recalls.

“We thought, ‘Why don’t we be like 1-800-FLOWERS? But we’ll be the fastener version of it,’ ” Kleinhandler says.

Their sole problem was not owning a computer. They remedied that shortcoming by spending each evening at the public library where they set up their website and email and conducted business.  “As soon as we went up on the Internet in 1999, we started selling all over the world,” Kleinhandler says.

Hudson Fastener was never the same. The speed of technology opened it to new markets and completely changed its business model, making the bricks-and-mortar warehouse obsolete.

“We went from having one central warehouse on Long Island, serving the Long Island community, to having 65 virtual warehouses located throughout the United States,” Kleinhandler says.

As a result, Hudson Fastener improved delivery times and reduced cost.

“We’re really technology-based and that’s the way we see our future,” Kleinhandler says.

In 2011, she took part in the emerging leadership program at the Williamson College of Business Administration at Youngstown State University and emerged with a plan for strategic growth. It earned the approval of Jim Cossler, CEO of the Youngstown Business Incubator, who invited Hudson Fastener to become a tenant.

Today the business employs four and looks more like the headquarters of a tech startup in Silicon Valley than a worldwide distributer of building materials. The three-room office contains computers, flatscreen TVs, marketing materials and a small dog named Tyler that never leaves Young’s side.

Kleinhandler and Young say they’re working on something big and hope to hire 30 people for technology and sales positions in the next three years.

Today the U.S. Small Business Association will present the company with its Jeffry Butland Family-Owned Business of the Year Award. The award is presented annually to a family-owned and operated business that has demonstrated longevity and remained profitable over the generations.

“What she’s done is really unique,” says Gil Goldberg, district director of the SBA. He says Kleinhandler has taken what was the norm and “brought it into the 21st century.”

If the award were an Oscar, Kleinhandler’s acceptance speech would contain a great many thank- yous to people, businesses and organizations in the Youngstown area. And the orchestra would play reminder after reminder to wrap up her expressions of gratitude.

“We really feel like Youngstown has become a new family to us,” she says, citing the help from the YBI, Mahoning Valley Economic Development Corp. and the city of Youngstown among others.

Asked if they could imagine their current success had they remained in New York, Young and Kleinhandler immediately responded, “No,” in unison.

The two say the area is a model of cooperation, “the place to be” for businesses involved in technology or manufacturing. Their goal is to see Hudson Fastener grow on the YBI campus before eventually occupying their own building.

“I want to thank the people in Youngstown who have helped us get where we are today. It’s because of all that support we’re able to make our dreams come true in Youngstown,” Kleinhandler says.

Editor's Note: This story appears in the MidMay edition of The Business Journal, in subscribers' mailboxes today.

Copyright 2014 The Business Journal, Youngstown, Ohio.
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