Bank switch helps company grow

For the Warner family, owners of St. Paul, Minn.-based Warners' Stellian Appliance Company, rising to the occasion has been a generational affair. The family entered the appliance business in 1954 when Jim Warner returned from the Korean War to marry, to begin his family and to find a career. .A few months of searching yielded an interview with Stellian Appliance, a small company whose owners, Steve and Lillian Farkas, had named it by combining their first names. Having just opened in 1951, the company needed a bookkeeper. Warner told Steve Farkas that he didn't know the first thing about the appliance business. He was assured he would be trained..As Warner found out, his training would be of a different kind. On his first day at Stellian Appliance, Farkas greeted Warner at the office in the morning, showed him his small basement office and left for lunch, for the rest of the day. Warner waited on customers, sold appliances and kept the books with no training. When it was time to close shop, Farkas returned to lock the door. .By 1971, Warner had gathered the experience necessary to strike out on his own. To his surprise, Farkas suggested he buy Stellian Appliance. The two struck a deal with Jim Warner and his cousin, Rick Warner, becoming joint owners. The company became Warners' Stellian, a business which today has been run by three generations of the Warner family. .Managing the business through the last 42 years has been no easy task. Much like the banking industry, Warners' Stellian would need to grow to survive. In 1979, the year Jim Warner bought out his partner, there were about 50 neighborhood appliance stores in the Minneapolis-St. Paul area; a number which has shrunk to about eight today..But Jim Warner would be helped in the push to grow the company. In 1983, he suffered multiple heart attacks. With the sole owner of the company out of commission, the eldest three of his nine children stepped up and ran the business for two months. In the years that followed, Jim Warner began sharing ownership with his children. By the early 1990s, even the youngest of the family − twins Bill and Bob Warner − worked in the company..And the company grew, adding two more locations to the business's original location. "After my brother Jeff took the torch from Dad, he had a young man's ambition," Bob Warner said. "The company entered growth mode and began to look for new store acquisitions.".But then the company outgrew its banks' lending limit. The two community banks which had partnered to provide the company's financing began requiring personal guarantees from family members, a security the family felt was too much. "They were over-cautious at a time when we had no other debt," Bob Warner explained. "Businesses love to be loyal. But we felt we had to end the relationship. The new bank didn't require that kind of security and offered a borrowing limit twice the size.".The company moved its entire relationship to the new bank − which now finances Warners' Stellian's equipment, holds its deposits and provides the company credit card accounts. The new lending limit helped the Warners open five new locations. The company boomed throughout the 1990s and into the 2000s, growing at an average rate of 15 percent per year..Then, in 2008, three years after the company finished its new 156,000-square-foot headquarters, the housing bust hit. Since the appliance industry depends on the housing industry, Warners' Stellian felt the aftershock. Standard sources of revenue declined and the company turned to its line of credit to buy inventory and to meet expenses. The line's doubled size allowed the company to absorb these costs. And the payments fit the revenue stream, even in time of crisis..The new bank also provided aid by advising the company on another way to stretch its revenue. "Our banker suggested we move the funds in our operating account to an overnight investment account which paid interest based on LIBOR. The interest came and helped us pay our bills," Bob Warner said. .The family feels fortunate that it chose a bank which allowed them to grow. "If we had remained satisfied with one or even two locations we would not have survived as a one of the top 25 appliance dealers in North America," Bob Warner said. "We have been able to do well because we have taken market share. Now, we are back in growth mode."