Parks Sausage Co., the largest black-owned manufacturing company in Baltimore, is seeking an investor or buyer to rescue it from too much debt and declining sales, company Chairman Raymond V. Haysbert Sr. said yesterday.
Mr. Haysbert said he has retained Baltimore-based Equity Partners Inc. to find investors willing to provide the approximately $7.5 million he believes is needed to keep the Parks Circle sausage factory operating.
He also will offer the company for sale, including to competitors who would probably want to close the 220-worker Baltimore factory and headquarters, and move production of his sage-and-pepper-flavored pork sausages to lower-wage plants in the South.
"It could very well wind up that way," Mr. Haysbert said. "And I would feel very sad," especially for his inner city workers.
"That is the reason why I kept the business in the city," he said. "That vision would be wiped out."
If he doesn't get an offer, he said, it might mean the end of a company that made famous the phrase "More Parks Sausages, Mom . . . Please."
"It is a case of expand or die," said Mr. Haysbert, who joined the company a year after it was founded in 1951 by Henry G. Parks Jr. in an abandoned dairy plant near the junction of Pennsylvania and North avenues.
From $119,000 in sales in its first year, the company went on to become one of the largest black-owned businesses in America, and Mr. Parks became a prominent player in Baltimore's political and civic worlds. Mr. Parks died in 1989.
Meat industry analysts said yesterday that Parks' difficulties are a result of a trend toward consolidation among food companies. "More and more small mom-and-pop packers are going out of business," because of competition from corporate behemoths such as Tyson Foods Inc., said Kurt Funderburg, who follows food companies for Ferris, Baker Watts Inc. in Baltimore.
The loss of the $10-an-hour union jobs would be a blow to a city that has seen a free-fall in high-paying manufacturing jobs. In the past four years, the number of manufacturing jobs in the city has fallen from 43,805 to 36,428, according to the state Department of Economic and Employment Development.
Through his spokesman, Mayor Kurt L. Schmoke said yesterday that he was concerned about the company's difficulties and was "trying to move toward retaining those jobs."
But, added spokesman Clint Coleman, "These are obviously tough times. We don't have a lot of money."
Mr. Haysbert, who with his son Reginald owns the company, said Parks' finances have grown steadily worse since he moved the factory from its longtime home near Camden Yards to a new $16 million factory at Parks Circle in 1990.
Move brings trouble
After the Maryland Stadium Authority paid Parks $9 million to move from the site that later became part of Oriole Park at Camden Yards, Mr. Haysbert was wooed by cities around the country, but accepted an offer of $2 million from the city to build a larger factory near Druid Hill Park.
And that, Mr. Haysbert said, was the beginning of the trouble.
In a fit of optimism, Mr. Haysbert built a 133,000-square-foot factory -- twice as big as he needed. But instead of growing into it, Parks started shrinking because of the costs associated with the expensive new factory.
"We moved into the heart of the minority community because we felt it had such symbolism value, but it cost us tremendously," he said.
"I went ahead and gambled on a bigger plant" and lost, he said. Just after the move, Parks lost about a third of its business when two large sausage customers -- Pizza Hut and Domino's Pizza Inc. -- shifted to lower-cost sausage makers.
Parks started raiding its advertising budget to cover operating expenses, and that hurt supermarket sales, he said.
From a high of about $28 million in 1990, Parks' sales have slipped to about $20 million this year, he said, and the plant is currently operating at 35 percent of its capacity.
Parks' sausages are currently sold in only about 4,000 supermarkets, down from a high of about 12,000 stores, he said.
Parks, which has assets of about $15 million, is "seriously behind" in payments on its $8 million debt, which is held mainly by the city and NationsBank Corp., he said. Parks started missing debt payments about 18 months ago, Mr. Haysbert added.
He declined to say whether the company was profitable.
Looking to expand
Besides paying off debts, Mr. Haysbert said he would use about $2 million of the money from a new investor to buy new equipment to produce precooked sausages increasingly favored by McDonald's and other fast-food breakfast servers.
Another $2.5 million would fund Parks' drive to expand its sales region from the Northeast to include Chicago, Atlanta and Richmond, Va.
And he would like to spend about $1.8 million to advertise new products, including a new low-fat sausage.
He said that he has already held preliminary talks with city and state officials asking for help but that he was told "this being an election year, it is not a very good time to talk about that."
Mr. Haysbert said he feels pressed to take action by personal concerns as well. He is 75 years old, "semiretired," and would like to resolve the company's fate.
Daniel P. Henson III, commissioner of the city's Housing and Community Development Department, yesterday said that the city has already agreed to extend Parks' $2 million Urban Development Action Grant loan and is trying to find other financing to bail out the company.
"Parks is a symbol for African-American businesses across the country," Mr. Henson said.
"We do not want to lose Parks Sausages," he said.
Officials at Equity Partners Inc. said yesterday that they would be contacting competing sausage makers, including Smithfield Foods Inc., which bought longtime Baltimore hot dog maker Esskay Inc. and closed its local factory in 1993.
John L. Herman Jr., president of the search firm, said he plans to talk with the 100 largest Maryland companies as well as the unions representing workers at the plant, in an effort to find someone willing to either invest in or buy the company.
He said that Parks will explore almost any option but that it is not currently considering selling stock to the public. He said Mr. Haysbert hopes to have various options in hand within 90 days.
Parks was the first black-owned business in the country to go public, selling its shares in 1969. The company was taken private by a Miami company in 1977. In 1980, Mr. Haysbert saved it from liquidation by other corporate owners by engineering a management buyout.