Schott to Exit Direct Retail Market, Focus on Systems

Schott Applied Power, citing a strategic shift in focus, will close its Redway, California retail store, purchasing department and customer service operation over the next two months.

Redway, California – September 18, 2002 [] Schott Applied Power (SAP) President Tom Starrs told News that the 19 employees of the Redway operation will be phased out beginning September 30 with the facility closing by mid-November. “A strategic shift for Schott Applied Power really requires this change to be made but we’re very sympathetic to meet the needs of our employees there,” said Starrs. “The decision to get out of retail is driven in large part that our dealers have long expressed frustration with our involvement with direct sales.” Starrs said Sap will change its focus from being a “one stop shop for the parts and pieces that go into a PV system” toward being a “true system integrator.” While SAP will continue to make component sales to dealers a core part of the business, the company will target electrical contractors who would like to install PV systems along with the more traditional electrical installations. The Redway retail store, a fixture in the small, Northern California community since 1979, was the original home of Alternative Energy Engineering, which was purchased by Idaho Power in 1999 along with Applied Power, Solar Electric Specialties and Ascension Technologies. That group was then purchased by Schott Glass creating SAP. Starrs said Idaho Power never effectively integrated the companies with each other leaving that to SAP, a task Starrs has been charged with since he joined the company in March. The final decision to close the direct retail operation, though, was made only within the last few weeks. The closure of the Redway store may be a temporary set back rather than a permanent end. David Katz, who founded Alternative Energy Engineering (AEE) in 1979 and will lose his job at SAP, told News that he would be interested in continuing the store, in the same location, possibly under the AEE name. “We might just become Alternative Energy Engineering again and go back into business,” Katz said, adding that the company could very well become a SAP dealer. At company meeting Monday evening, Katz said his current group of employees – all facing a tight job market in Redway – expressed their desire to stay in business in some form. Starrs said that is a real possibility. “No one would be more delighted than I would to see some kind of continued presence in the PV area there, Starrs said. The release of the AEE name, which SAP currently owns and any non-compete clause Katz may face, are issues currently under negotiation, according to both men. Katz sold AEE to Idaho Power in 1999 after posting sales of about US$5 million in 1998. He said he is optimistic about the future in part because SAP has been gracious during the closure. A closure Katz hopes is really another opening.


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