Scotts Miracle-Gro Co. announced last week that it would close its remaining 56 Smith & Hawken stores by the end of 2009. But both founders expressed relief because the chain had long abandoned its original values.
"Scotts couldn't have been a worse corporate owner," Paul Hawken told the Marin Independent Journal. "Smith & Hawken had become just a ghost of itself."
Smith and Hawken opened their first retail store in Mill Valley in California in 1982 with a goal of providing organic gardeners with handcrafted tools from England with a lifetime guarantee. It eventually became an early role model for socially responsible companies.
Smith & Hawken changed owners a number of times, including a sale to CML in 1993, to DDJ Capital in 1999, and Scott in 2004. But the founders were particularly upset by the sale to Scott, best known for its Miracle-Gro plant food and Ortho weed killer.
"When Scotts bought it and Smith & Hawken was owned by the largest pesticide seller in the U.S., I suggested people boycott it," Mr. Hawkens said. "It had completely lost its roots."
Speaking to the San Francisco Chronicle, Mr. Smith said, "It's a boom time in the gardening business and Smith & Hawken is going down the tube because it went way off the roots of the company and became a frou-frou, knick-knack kind of store, instead of a serious gardening store."
At the time of the 2004 acquisition, Scott said it was hoping Smith & Hawken would expand the company beyond its "grow and kill" products and increase its appeal to women. Its initial plan was to turn Smith & Hawken into an outdoor living and gardening product line to sell to stores such as Home Depot and Lowe's.
"That proved to be a strategy we could not execute," Scott's spokesman Jim King, told the Chronicle. "It left us with a specialty retailer, and that's not who we are. We never meant to keep it as a stand-alone retail operation."
Meanwhile, the store branched out into outdoor living products such as furniture, fire pits, lighting and garden décor.
"How could you possibly have a gardening store in this economy and go wrong?" Mr. Hawken said. "I'll tell you why. This wasn't a gardening store anymore."
Scott said it was unable to find a buyer for the struggling chain.
Said Scotts' CEO Jim Hagendorn, "Unfortunately, the combination of a weak economy and the lack of scale proved too great to overcome."
Discussion Questions: What do you think was at the root of the demise of Smith & Hawken? What lessons does this offer in how to manage acquisitions and "green" retailers?