Technology BOOM

Craig Capital LLC acquired Nalpac last year, and while on the surface things may have gone uninterrupted, underneath Nalpac is churning with improvements.

Steve and Andy Craig are fixers.
Not the George-Clooney-in-Michael-Clayton type, but the type gifted with high business acumen and the ability to execute on that vision.

And so it came to be in 2017 that the brothers—who are partners in Craig Capital LLC, a private equity firm based out of Detroit—acquired adult toy power broker Nalpac.
“What attracted us to adult toys was it’s a growing market, it’s becoming more socially acceptable and it’s one of the few real opportunities to help people but at the same time make money,” says Steve. “We felt there was this pent-up demand for products and people were ashamed or embarrassed to utilize these items. As a result, now that it’s becoming more socially acceptable people are talking about it at dinner parties, with friends, posting about it on Facebook. People are talking about sex, which means there’s real opportunity.”

Steve isn’t just tossing around the word “opportunity” to appease stock holders; Craig Capital LLC has backed its sentiment with its bankroll by bringing in new hardware and more than $1 million in new equipment. This technological upheaval is a sign of the brothers’ method of operation when coming in and improving a business.

Steve points to Kmart as an example of his firm’s philosophy—including how it’s handling Nalpac. Not too long ago, Kmart was one of the largest retailers in the world. However, Kmart chose not to invest in technology (or at least didn’t invest enough) while a competitor did.

That competitor was Walmart, now the largest retailer in the world. Prior to Craig Capital, Steve worked for General Electric and by virtue of working in management development and process improvement, he saw firsthand how bringing in new technology over time could improve and make things more efficient.

“Now that it’s becoming more socially acceptable people are talking about it at dinner parties, with friends, posting about it on Facebook. People are talking about sex, which means there’s real opportunity”
-Steve Craig

To that end, while the new hardware and million bucks is a clear-cut aim at improvement, thanks to the Craig brothers, Nalpac has developed a new app.

“This is huge for the industry because it’ll allow a store owner or a clerk to place orders live with their pricing, real-time, with their phones,” says Steve. “One of the biggest challenges they face is time management—small store, one clerk, you have to be present and on the showroom floor, but you still have to order product. The new app is a way to do that. Our real interest is bringing our customers into the next millennium.”

Steve stresses that Nalpac was doing fine, but they saw the burgeoning technology that could take Nalpac to new heights.

“We’re just getting started,” proclaims Steve, stressing the desire for customer feedback to bolster the app moving forward. And while the app, in version 1.3.0 as of this writing, will allow Nalpac customers to order, Steve wants the app to give those same customers the ability to educate their customers as they come in to their stores.

“Another challenge we’re seeing that retailers are facing is constant turnover at the store level,” Steve points out. “They have a clerk they bring in, they train them, they’re ready to go and they sell and they’re only there for two months and find a new job. So we’re going to bring technology in to help educate the consumers so we can support these brick-and-mortar stores that are competing with online retailers.”

The technological revolution underway at Nalpac is about the only thing the Craig Bros. have drastically changed since their acquisition. Perhaps it’s being brothers that have gone into business together—Andy calls Steve a bit more analytical, while he calls himself more operational—that fosters their mindset of not gutting Nalpac’s existing personnel.

“Change is difficult, no question, but we’re very lucky to have a great team of veteran industry experts who’ve been with the company many years,” says Steve. “They’ve been able to give us great guidance, and also accept our vision. As they’ve seen some progress and success, we’re starting to really come together and gel as a team, and I look forward to the growth with them.”

And where will that growth will lead to? Steve already has a vision in mind.
“Our goal at Nalpac is to be a leading distributor of these products, but also to be a resource for consumers, a resource for our customer base and a resource to the manufacturers we represent,” Steve says. “We’re going to continue to develop true partnerships within the industry and work with the companies that truly support us and provide the same type of support in return. We’re growing significantly, we’re looking for more team members, we’re going to be expanding in the next few years without question. We’ll utilize that technology as a way to help us stay ahead of the times.”

For more information, visit nalpac.com.