100-year-old Firm Has Lock on Growth

 By Victor Godinez in The Dallas Morning News, Jan. 3, 2006

Rolland Safe & Lock is evolving along with its tech-heavy industry.

You might call Rolland Safe & Lock a 100-year-old start-up company.

Invigorated by advancing technology and new business opportunities, the Dallas-based safe company is exhibiting all the traits of firms a fraction its age.

Revenue is growing at double-digit rates, new customers are pouring in, and the family-owned business has locked up a new chief executive to manage its growth.

Owner and president Rick Rolland said the industry has changed over the last several years.

"I think any small business, or any large business, for that matter is going to have to accept the change," he said. "It's been exciting for us because it really opens more doors than it closes."

One hundred years ago, the definition of innovation in the safe industry was an iron sphere lacked corners and seams and was thus resistant to dynamite.

Today, cutting-edge safes include electronic keypads, biometric sensors, time-delay devices and even Internet connections.

Mike Oehlert, technical adviser for the Dallas-based Safe and Vault Technicians Association, said that Rolland Safe & Lock has been more successful than many similar firms in reacting to shifts in the industry.

"They have focused more on the higher end of things, the commercial marketplace, than a lot of the other shops, the smaller shops, have, and that's what helped them to grow," he said.

Smart Safes

The $10 million company's most recent growth spurt has come from the pawn industry, thanks to the new PawnGuard 35 safe.

The safe, developed in conjunction with major pawn companies, has 35 steel drawers each linked to electronic time delays to prevent thieves from cleaning out the entire safe in a couple of minutes.

Austin-based EZ Corp., which has almost 300 pawnshops in 12 states and worked with Rolland to design the PawnGuard, has installed the $12,000 safes in 44 of its pawnshops since they went on sale in mid-2004.

Tony Gallo, director of loss prevention and risk management for EZ, said the chain is the target of 10 to 20 armed robberies a year, costing about $500,000 altogether.

In the stores with PawnGuards, there have been nine robbery attempts that, if successful, would have cost about $1 million.

Mr. Gallo said the future of the industry lies in the complex electronic safes such as the PawnGuard and upcoming models that can transmit warnings to a central office.

"I think that we're going to have what I refer to as smart safes as we go down the line," he said.

That transformation isn't lost on Mr. Rolland and his firm.

"We've all accepted the fact that we're not just selling steel anymore," Mr. Rolland said.

For example, a new line of safes includes Internet connections.

"Now, in Dallas, you can call up a safe in Seattle and see who went in it and how long they went in it," Mr. Rolland said.

Employers can also assign a different entry code for each employee and change or deactivate codes when employees leave the firm.

The locks -- called IP locks for Internet protocol -- essentially double as alarm systems.

"i think the real magic with the IP lock is what they call exception reports," Mr. Rolland said. "The exception report would be, say, three successive failed combination access attempts. That IP lock would then send out an e-mail message to their e-mail site or cell phone and say, 'Someone's trying to get into the safe who's not authorized.'"

When a customer comes to Rolland Safe & Lock, the engineers at the company design a prototype safe and outsource the safe and lock construction to firms around the world.

Custom Design

Rolland then assembles the two components, as well as handling installation and service, which can be just as critical as the design.

"If a jeweler can't open his safe on the 23rd of December, he's lost half of his yearly revenue in that one day, in most cases," Mr. Rolland said.

For most of its history, Rolland focused on small jewelry stores and other single-sale clients.

In the 1990s, the company began selling to large retail and restaurant chains, clients with hundreds of thousands of locations, each equipped with a safe.

The company's client list includes Hilton HOtels Corp., McDonald's Corp., J.C. Penney Co., FedEx Corp., the Container Store and Southwest Airlines Federal Credit Union, among others.

Roughly 60 percent to 70 percent of Rolland's revenue comes from those large commercial customers, who represent about a $500 million market, Mr. Rolland said.

For the Long Haul

Overall, he said, the broader market for vaults and safes has been growing at a healthy pace, fueled largely by banks expanding their branch networks.

Industry leaders, such as Diebold Inc., dominate the sector serving financial institutions.

The company also does work for the much larger financial sector, including bank vaults that can cost up to $150,000.

"Our growth has been double digits since we started focusing on chains in the late 1990s," he said. "We've projected almost a 20 percent growth for next year and have experienced 30 percent growth this year."

Two months ago, the company brought in a new chief executive officer with management experience at 7-Eleven and other large firms to formulate a growth strategy.

"The growth opportunity is there, the market opportunity is there, but as we bring in the additional business, it's important that we take care of the customers," said Mike Manor, the new CEO. "Don't go out there and just try to make sales. Take care of the customers for the long haul."

Mr. Manor said he wants to streamline the company's operations before considering major expansion, possibly through acquisitions. "We want to make sure our process is straight before we make it go faster," he said.