What do you get when you combine two wildly entrepreneurial brothers with a nimble and innovative community bank?
Roaring sales and Lowe’s as your new best friend.
Louisville natives Tom and Steve Scanlan, founders of Estate Products, Inc. in Germantown hit upon a brilliant invention, when Tom created AirStone, a decorative featherweight home décor stone made from recycled crushed wine bottles. AirStone is used indoors or outdoors for fireplaces, kitchen backsplashes , accent walls, outdoor grill areas, home foundations and chimneys . “It weighs almost nothing and you put it up with adhesive. Do-it-yourselfers are hooked!
“Tom presented the product to Lowe’s and Lowe’s wanted all they could produce,’” says Debbie Prewitt, Citizens Union Bank market president. Prewitt collaborated with the brothers to create a financing deal that enabled Tom and Steve to buy an additional building and rapidly expand AirStone production. With financing from CUB and the Small Business Administration, the brothers founded Baton, LLC, purchased a 169,000-square-foot building on Kentucky St in downtown Louisville and designed a customized manufacturing production system for AirStone.
Baton LLC is a wholly owned subsidiary of Estate Products. Tom heads up Baton, and Steve leads Estate Products, a major manufacturer of masonry and brick-related products sold primarily through brickyards and masonry-supply distributors.
Company growth has been phenomenal.
“In the first half hour of our first meeting with Lowe’s, they said okay, how fast can you get this product into all of our stores? At the time, we were still using a hand mixer to mix the stone. Each year for our first three years we tripled in size.”
This is when CUB provided a solution. While large banks were turning the brothers down for financing because they were considered part of the real estate/home improvement industry, combined with a sluggish economy in 2010/2011, CUB saw an opportunity to partner with a couple of Louisville entrepreneurs who had a record of success.
“They got painted with a broad brush by other banks because they were in the housing and home improvement sector and nobody wanted to make loans to them,” Prewitt says. Tom and Steve had to trust a community bank and we had to trust their entrepreneurial process and innovations. The transparency with this client was absolute. Our trust, honesty and belief in each other was absolute.”
Steve says big banks weren’t willing to take a risk on the brothers’ innovation and success history. “There was this feeling like ‘you’re in the building industry, we’re not interested.’ With all of the banks, the story about what you do and how well you do it didn’t really matter. It was more like ‘how much can we loan you and still have our backsides covered?’ With CUB, it was different. It wasn’t just a sales guy saying ‘here, fill out a form.’ CUB’s board members got involved. We had direct access to CUB’s CEO. There’s a difference between meeting face-to-face with David, CUB’s CEO, and meeting with another bank’s regional sales guy who reports to someone who reports to someone else.”
Baton currently produces 18,000-square-feet of the proprietary man-made stone each day at the highly-automated Kentucky Street facility. Lowe’s home improvement stores take delivery of all of it and are asking for more. AirStone comes in three different color blends – Spring Creek, Birch Bluff and Autumn Mountain. The natural-looking stone is strong and lightweight. It can be cut with a hacksaw and no grouting is required. . Each carton contains 8 square feet and retails for $59 a box at Lowes.
“It really creates a natural look in the home,” Tom says. “You can see various gradations of color in the stone.”
Baton has spent zero dollars on marketing – demand is driven by word-of-mouth, do-it-yourselfers’ YouTube videos and Pinterest.
“All of a sudden, AirStone was showing up everywhere on Pinterest,” Tom says. “It was amazing!”
The two brothers, both Trinity High School grads, are a perfect complement to each other as business partners. Tom, 54, is a creative tinkerer and inventor, and Steve, 49, is a whiz with logistics, sales and process design. When they get together, they feed off of each other’s energy.
“They both have great personalities and are fun to work with,” says Prewitt. “With Baton, the excitement is working with such a dynamic company that is evolving so quickly. This is what makes my job worth it. There’s a lot of pride in that.”
For now, CUB and Tom and Steve are enjoying the ride of their lives with the company’s enormous success.