The Man Who Said No to Wal-Mart

"The meeting started with the vice president of the category saying how it was clear that Lowe's was going to build their outdoor power-equipment business with the Cub Cadet brand, and how Home Depot was going to build theirs with John Deere," says Wier. "Wal-Mart wanted to build their outdoor power-equipment business around the Snapper brand. Were we prepared to go large?"

Talk about coming to the table with different agendas. Wier was in Bentonville to pull his mowers from Wal-Mart's stores. The vice president was offering a greater temptation: Let's join hands and go head-to-head against the home-improvement superstores.

Which is when Wier said no.

"As I look at the three years Snapper has been with you," he told the vice president, "every year the price has come down. Every year the content of the product has gone up. We're at a position where, first, it's still priced where it doesn't meet the needs of your clientele. For Wal-Mart, it's still too high-priced. I think you'd agree with that.

"Now, at the price I'm selling to you today, I'm not making any money on it. And if we do what you want next year, I'll lose money. I could do that and not go out of business. But we have this independent-dealer channel. And 80% of our business is over here with them. And I can't put them at a competitive disadvantage. If I do that, I lose everything. So this just isn't a compatible fit."

The Wal-Mart vice president responded with strategy and argument. Snapper is the sort of high-quality nameplate, like Levi Strauss, that Wal-Mart hopes can ultimately make it more Target-like. He suggested that Snapper find a lower-cost contract manufacturer. He suggested producing a separate, lesser-quality line with the Snapper nameplate just for Wal-Mart. Just like Levi did.

"My response was, we would take a look at that," says Wier. "The reason I gave that response was, it was a legitimate question. In my own mind, I knew where I'd go with that"--no thanks--"but at that kind of meeting you at least have to be willing to say, I'll investigate." And that was it. "The tone at the end was, We're not going forward as a supplier."

No lightning bolt struck. Except that Snapper instantly gave up almost 20% of its business. "But when we told the dealers that they would no longer find Snapper in Wal-Mart, they were very pleased with that decision. And I think we got most of that business back by winning the hearts of the dealers."

Snapper was successfully integrated into Simplicity, which in 2004 was itself bought by Briggs & Stratton, the company that makes many of the engines in Snapper and Simplicity mowers. Simplicity and Snapper operate as independent divisions, and Wier remained CEO of both until last summer, when he resigned to join the private equity firm Kohlberg & Co. In McDonough, business is strong. Shane Sumners plans to add a second assembly line for both walk-behind and riding mowers.

One serious hazard to Wier's strategy is that independent lawn-equipment dealers face all the same pressures that have killed, for instance, many independent hardware stores and toy stores. "That is a legitimate question and a legitimate concern," says Wier. "I think we have a part in that outcome. Can Snapper, as a major supplier, continue to supply [the independents] with great product, and a product different than you can buy at Wal-Mart?"

"I believe Wal-Mart has done a great service to the country in many ways. And it may be that along the way, they've driven some people out of business who shouldn't have been driven out of business."

Wier says, "I'm probably pro-Wal-Mart. I'm certainly not anti-Wal-Mart. I believe Wal-Mart has done a great service to the country in many ways. They offer reasonably good product at very good prices, and they've streamlined the entire distribution system. And it may be that along the way, they've driven some people out of business who shouldn't have been driven out of business." Wier wasn't going to let that happen to Snapper.

Wier had determined to lead Snapper to focus on quality, and through quality, on cachet. Not every car is a Honda Accord or a Toyota Camry; there is more than enough business to support Audi and BMW and Lexus. And so it is with lawn mowers, Wier hoped. Still, perhaps the most remarkable thing is that the Wal-Mart effect is so pervasive that it sets the metabolism even of companies that purposefully do no business with Wal-Mart.

And the power and allure of Wal-Mart is such that even Jim Wier, the man who said no to Wal-Mart, a man who knows all the reasons why that was the right decision, has slivers of doubt.

"I could go to my grave, and my tombstone could say, 'Here lies the dumbest CEO ever to live. He chose not to sell to Wal-Mart.' "

Charles Fishman (cnfish@mindspring.com) is a Fast Company senior writer.