As a business strategy, the success of “keeping it in the family” may well be dependent upon the depth of the gene pool.
Throughout its 145 years, three families have had custody of the Watkins company — through it’s rise and fall and resurrection.
It was just three years after the end of the Civil War that 28-year-old Joseph R. Watkins mixed up a concoction of camphor, oil of spruce, extract of capsicum and other ingredients according to a recipe he’d purchased from a Cincinnati physician, bottled it, loaded it in his buggy and set off to the hinterlands to peddle Dr. Ward’s Liniment — good for man and beast.
Surprisingly enough, in an era where snake-oil and quackery were the rule, Watkins’ first product lived up to its claim — a claim backed by the first money-back guarantee. Sore muscled men and sore muscled mules provided a ready market and in 1888, taking advantage of a good labor supply and ready road, river and rail access to customers and suppliers, the J.R. Watkins company opened its first manufacturing plant in Winona — and J.R. Watkins was well on his way to becoming a very rich man and patriarch of a wealthy and powerful family.
1904 would be a year of personal joy and sorrow for the Watkins family. That year Grace Watkins, J.R. and Mary Ellen Watkins’ only surviving child, would marry Ernest Leroy (E.L.) King. It was also the year that Mary Ellen would die.
J.R. would live a widower until 1911, when he wed Martha King, mother of E.L. King — turning his daughter and son-in-law into step-siblings as well as man and wife.
Three months later, while vacationing in Jamaica, J.R. Watkins was dead.
J.R. Watkins had brought his nephew, Paul Watkins, into the company, and at J.R.’s death he took the reins of the family enterprise.
It was a time of expansion. The company product line expanded and a line of cosmetics and toiletries was introduced. By 1915, the company was the largest direct-sales company in the world, a status that was further boosted in 1919 when the city sale department was established, breaking the company free of it’s rural roots and introducing it to a burgeoning urban market.
Times were good for the company’s owners as well. Between art-buying jaunts to Europe, Paul oversaw the construction and decoration of the tudor-style manor house on Wabasha Street in Winona.
Not to be outdone, E.L. and Grace King, contracted with architect George Maher to build a 10,000 square foot Prairie School-style home along the Mississippi just south of Winona. The Kings supplemented a lavish social life with African safaris and other travel.
In 1931, Paul Watkins died and E.L. King took over leadership of the company. Despite the depressed economy, the company remained profitable — its sales based on household necessities — and continued to expand, entering the international market in 1935. By King’s retirement in 1944, there were 15,000 Watkins men in the field.
King’s son, E.L. “Bud” King took his place in the president’s chair. But the end of the war also marked the end of an era as changing consumer tastes and habits proved incompatible with Watkins’ approach to sales and marketing.
By the end of the 1950s, Watkins sales had stagnated, and King faced a challenge from his sister Mariel and her first husband, Ralph Boalt, backed by Grace Watkins King, all pushing for the sale of the company. The sale was blocked by Bud King, but by 1964, he was maneuvered out of the president’s office in favor of the first non-family president in the company’s history, James Doyle.
Doyle’s tenure was marked by continued decline, including a disastrous attempt to refocus the company’s product line on direct-sale cosmetics. By 1973, Bud King had regained a controlling interest in the company, deposed Doyle and installed his son, David King, as president.
In November 1977, despite repeated infusions of cash from Bud King’s personal accounts, Watkins filed for Chapter 11 bankruptcy protection in federal court, an audit showing company assets of $7.08 million, debts of $6.5 million and 1977 losses totaling $2.05 million.
For 13 months, the fate of one of Winona’s largest employers rested in a St. Paul courtroom, until on Dec. 27, 1978, Twin Cities businessman Irwin Jacobs laid down a $2 million cashier’s check that secured ownership of Watkins for Jacobs Industries — for a total investment of between $4.5 and $4.6 million.
For Winona, the news was somewhat unsettling. Jacob’s reputation as “Irv the Liquidator” had preceded him — his propensity for purchasing troubled firms and selling them off piecemeal was well known. But Jacobs pledged his intention to continue and expand Watkins’ operations.
Proving good as his word, Jacobs stuck with the firm, returning the company to profitability, revamping the product line and revitalizing its sales force and marketing approach. “The Watkins brand was so strong even 30 years of mismanagement couldn’t kill it,” Jacobs said in a 1992 interview.
In 1997, a second generation of the Jacobs family took the helm. Mark Jacobs, then 33, was appointed president after 16 months with the company. Seeing the need to raise the company’s profile as a key to increasing market share, for the first time Watkins products began to appear on retailers’ shelves — creating a brand awareness that can be capitalized upon by the company’s 80,000-strong direct sales force.
And yes, the original concoction of camphor, oil of spruce, extract of capsicum and other ingredients is still available ... catalogue No. 02317.