Billiards Co. Playing Behind the 8 Ball
Five years ago, Craig Connelly was running a multi-million dollar billiards company in the United States, manufacturing and selling 10,000 top-end, furniture-style billiards tables a year. His Connelly product line developed a reputation for being some of the best billiards tables in the world, and the company became a leading sponsor of women’s billiards tournaments on ESPN.
At the peak of his business in 2005, Connelly had 175 employees, was doing $23 million in sales and had a goal of opening 50 retail stores across the United States. He had the third-biggest billiards company in the country and was supplying top distributors in the United States, Canada and Europe.
Then came the U.S. housing crash and economic meltdown, which was a particularly bad break for the billiards industry. As U.S. households tried to cut costs and reduce spending, luxury items such as Connelly’s high-end billiards tables, which sell for an average of $3,000 to $5,000, were one of the first things people crossed off their lists of things to buy.
Connelly fought desperately to save the company he had built from scratch. He liquidated several properties he owned in the United States and invested all the money he had into the struggling company, which was locked into expensive lease contracts on seven retail stores in Arizona. But the economy fell apart too quickly for Connelly to keep his billiard business racked together.
He eventually had to file for chapter 11 bankruptcy at the end of 2008. In the settlement arrangement he lost the U.S. business rights to his own name, which had made one of the most recognized brands in the world of billiards.
“They got my real estate, they got my factory, they got my name, they got everything,” Connelly said.
Now Connelly is trying to get out from behind the eight ball and rebuild his billiards company – only this time from Nicaragua.
Connelly first came to Nicaragua in 2004 in the heyday of his company. While other U.S. billiards companies started outsourcing production to Asia, Connelly chose the near-shore option of Nicaragua, which offers attractive free-trade zone incentives, a competitive labor force and close proximity to the U.S. market.
The first year his company started operating here with 40-plus local workers, he sent 4,000 tables’ worth of components to his U.S. factory, where the Connelly tables were assembled and shipped out.
“The idea then was to produce volumes of parts for my U.S. company to lower the labor costs,” he said.
But after the company went bankrupt in the United States, the outsourcing factory he had started outside of Granada was all that Connelly had left. The problem, he says, is that now he doesn’t even have the money to keep that running – making it impossible for him to meet the standing orders he has in the U.S. and Germany.
“You have to have money to operate, I don’t have any more. And I am suffering,” Connelly said, standing in his quiet factory filled with idle machinery.
Today, Connelly has only four factory employees who tend to custom orders from the small local market. Last year, the man whose name is associated with the best billiard tables in the world – and who literally wrote some of the industry standards for billiard table specifications – manufactured only 25 tables, which were sold to local billiard clubs and wealthy individuals living in Boaco and Managua.
Hoping for a Solid Break
Despite the hard times, Connelly admits the decision he made in 2005 to outsource to Nicaragua rather than Asia may have saved him from a complete scratch.
Many of his competitors who outsourced to Asia are now out of business entirely. Connelly, however, is chalking up his cue for the next game.
“I’m still here and they’re gone,” he said, adding that Nicaragua was “by far” a better choice for outsourcing than Asia. “And it could be unbelievably better if we could go back to the market.”
Still, Connelly remains optimistic. He says a lot of what he needs to get back in business can be found here in Nicaragua. Whereas Connelly used to employ a woodworking firm in California to do machine-carved detail work on the side paneling of his tables, he said the local Nicaraguan craftsmen – who do everything by hand – can produce much better detailed product than he was getting back home. And the leather pockets he used to import for his tables could be just as easily crafted in Masaya, he said.
Connelly also has access to a talented and eager labor pool in Granada. Company administrator Alvaro García said former employees come by the factory every Monday to see if there is work and to ask when production is going to start up again.
The only thing missing at this point, Connelly said, is money. And for the man who claims he lost $5 million in the economic collapse of the past four years, the amount he needs to get back to work seems small by comparison.
With $100,000 Connelly says he could get back in the game and start shipping containers of parts and tables to the United States, as well as to Central America’s untapped market.
And with $300,000, Connelly says he’d have enough to open a small distribution warehouse in Texas and start supplying his old sources with top-quality tables again. Unlike when he started the business the first time in 1980, when he was in his mid-20s and fresh out of ArizonaStateUniversity, Connelly, now 53, has a lifetime of industry knowledge, a factory full of equipment and world-class reputation with the top names in the industry.
He said he’s not even afraid to compete against his old Connelly brand name, in the event some other billiards company purchases his old U.S. company before he can raise enough money to buy it back.
“Any domestically produced product in the U.S. I can beat from Nicaragua,” he said. And the billiard tables being produced in Asia are no competition at all, he says.
“The Asian product comes in three colors and two sizes. I offer five sizes, so we have much more ability from Nicaragua to meet the demands and needs of U.S. consumers,” he said.
Plus, he added, the quality of the materials and craftsmanship from Asia is much lower than what he can – and has – produced for the past 30 years.
“I have over $1 million and 5 years of my time invested in Nicaragua,” Connelly said. “We have the machinery, the knowledge and the labor. We are all ready to go.”
Indeed, Connelly says, all he needs to start running the table again are a few investors to help him get the ball rolling.
To learn more, visit Connelly’s webpage www.connellybilliards.com, or contact Craig directly at email@example.com, tel. (505) 8853-1315.
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