Moving Metal

In July 1979, Reliance began looking ahead towards the next decade. In a strategic concept paper, Gimbel suggested that the time was right to conduct a tax-free spin-off of the SupraCote subsidiary to Reliance shareholders. After more than a year of planning, the spin-off took place in February 1981. The spin-off provided that anyone owning stock in Reliance received one share of SupraCote for every share of Reliance that they owned.  Over time that changed as people bought and sold SupraCote and Reliance shares indepen- dent of each other. Six years later, the new shareholders sold SupraCote to Broken Hill Properties at a significant profit. The SupraCote spin-off also capped two decades of tremendous growth and technological improvement for Reliance. At the time, the company was the third largest metals service center company on the West Coast, just behind Earle M. Jorgensen and Ducommun. It had a book value of $23 million, but its liquidation value was at least double that. The company stocked over 6,000 items in state-of-the-art racking and retrieval systems and served more than 10,000 custom- ers. Twenty years before, Gimbel had developed many of his plans alone, but now, with Joe Crider taking on a greater role, management began developing new plans that would bring Reliance to even greater success in the decades ahead.

start beyond Kilsby. Gimbel was intrigued and instructed him to gather some preliminary data for the Board of Directors. In April 1976, Hollar returned with the numbers and a formal proposal for a new division within Reliance. It would have the same status as a metals service center, with Hollar serving as Manager and reporting directly to Gimbel. The plan called for construction of a 44,000-square-foot facility in Santa Fe Springs, California, north of the Santa Ana Freeway and east of Route 605. The cost was an estimated $3 million. The Board approved the plan in May, and Tube Service Co., opened later that year. This first step in a strategic push towards “specialty stores” was an instant success. Reliance opened a second Tube Service location in Milpitas, California, three years later. Reliance acquired its second specialty store in 1977 with the purchase of Bralco Metals, a processor of brass, aluminum, and copper products founded in 1946 in Pico Rivera, Cali- fornia. In 1978, Reliance bought the Los Angeles branch of Meier Metal Service Center and merged it with Bralco. Two years later, Reliance acquired Foucar, Ray & Simon, a specialty tube distributor in Hayward, California. But that specialty operation could not survive on its own and two years later was consolidated into the Reliance Santa Clara division. “Foucar was probably the second oldest service center in California, with a good reputation,” Gimbel later explained. “They’d done well over the years, but I guess they’d gotten rigor mortis. We thought that we could change all that.” He continued, “We tried and tried to change it, and it didn’t work. So we had to admit defeat and close up the place.” A Portland, Oregon, branch of Foucar, also purchased in 1980 and renamed Reliance Metalcenter, fared no better and was eventually closed.

71