Small Business Profile: Raising Expectations
Although it provides only temporary products, Academy Tent and Canvas has become a permanent fixture from Oscars to Tournament of Roses parade.
By AMANDA BRONSTAD
Staff Reporter
Tom Shapiro has a way of popping up wherever the action is.
There he was at the 2002 Winter Olympic Games, the Academy Awards, the Kentucky Derby. That’s Tom at the Rose Bowl, movie premieres and presidential inaugurations.
Power broker? Celebrity? Gadfly? No, Shapiro makes tents.
The chief executive of Academy Tent and Canvas Inc. has sold, rented and leased tents for use on aircraft carriers, cruise chips and Alcatraz Island. His tents have been in Native American casinos and city street festivals and this year, they were atop a wind-blown Utah mountain during the Winter Olympics.
“We’re in the construction business,” Shapiro said. “Just like house builders build custom homes, that’s what we do. These are prestigious events. Clients need to differentiate their tent from any other.”
Shapiro has had a career in textiles of one sort or another.
Before founding Academy Tent in 1981, he ran his family’s garment business in downtown L.A. for several years, until industry slumps forced him to liquidate the 54-year-old company in 1976.
He took a purchasing job at Canvas Specialty Inc. in L.A., now a competitor to Academy Tent, in the hopes of eventually buying the company. When the owners opted not to sell, he left to start his own company.
Help from a friend
Shapiro brought in Maury Rice, a friend who had been president of a family lighting business that had been sold to larger company.
“I knew nothing about the business of tent rentals or manufacturing,” said Rice, now president of Academy Tent. “What I knew about Tom was that he was honest and aggressive. On that faith, we went into business.”
Shapiro and Rice opened a tiny warehouse in Watts with little more than “a couple sewing machines and a heat welder,” Rice said. Shapiro recruited a few clients from his previous job, and the business outgrew the office in three weeks.
They relocated their 20 employees to Ceres Avenue downtown, and later to a 30,000-square-foot building on Alameda Street. The business started a decade-long run, Shapiro said.
Its tents went up at the 1984 Summer Olympic Games in L.A., and Academy Tent began to pitch its products nationally. Ten years later, the company expanded to its current location on Gifford Avenue in Vernon.
Today, Academy Tent has 200 employees with annual revenues of $25 million, which Shapiro said he wants to double in the next 10 years. Half its revenues come from sales, the rest from leasing and rentals.
Earlier this year, the company purchased a 20,000-square-foot building across the street from its 80,000-square-foot headquarters at 5035 Gifford Ave.
Academy Tent has grown with the rising popularity among event planners of massive, sturdy tents freestanding structures as big as buildings made of heavy-duty, pre-stressed fabricated vinyl.
“It doesn’t make sense for us to build a brick and mortar site,” said Mitch Dorger, chief executive of the Pasadena Tournament of Roses, which has used Academy tents for more than a decade for the Rose Bowl and the Rose Parade. “Yet what we need are areas that can protect people and property. So a tent is a perfect solution.”
Academy Tent has a product line of a half dozen standard tents, and hires a handful of freelance engineers to address special design requirements for custom jobs. It can equip tents with air conditioning, carpeting, electrical distribution, lighting, glass walls or security stations.
Depending on size and materials, tents sell for anywhere from $500 to $300,000 and rent for an average of 50 cents per square foot, Shapiro said.
Academy Tent, which sells predominantly to party rental service companies, is one of the few manufacturers that competes with its customers.
“It’s unusual,” said Pete Mogavero, president of Evansville, Ind.-based Anchor Industries Inc., a manufacturing competitor. “If you are also renting tents yourself, it’s a challenge to sell to someone who views you as a competitor. Academy Tent has somehow been able to overcome that hurdle.”
Shapiro said his biggest challenge is keeping his business in California. He said he spends 10 percent more on overall business costs than his competitors, most of which do not operate in the state.
Workers compensation, energy surcharges, a higher minimum wage and a more worker-friendly overtime pay schedule make competing nationwide very difficult, he said.
While business fell after Sept. 11, Shapiro said 2001’s revenues rose 12 percent from a year earlier, on par with the company’s annual growth since the mid-1980s.
PROFILE: Academy Tent and Canvas
Year Founded: 1981
Core Business: Tent manufacture and rental
Revenues in 2001: $25 million
Revenues in 2002: $28 million
Employees in 2001: 200
Employees in 2002: 200
Goal: To expand capabilities to include military and government business, swimming pool covers and industrial textile products.
Driving Force: Growing a business through acquisition of smaller tent companies.
