Sunday, October 19, 2003

One business under the Theo Davies name is the TheoDavies Euromotors on Kapiolani Boulevard. Below, a file photo taken in the 1890s in Boston shows Davies with Princess Kaiulani. He was her guardian while she studied music, literature, French and German in England for four years.

Disappearing from view / A kamaaina company retrospective

Rumored sales of Theo Davies'
businesses may signal its end

Theo Davies' growth

1845: Theo H. Davies & Co. Ltd.'s predecessor, trading company Starkey, Janion & Co., is established by Englishmen James Starkey and Robert Janion.

1857: 23-year-old Theophilus Harris Davies arrives in Hawaii aboard the Quatre Bras and goes to work for Starkey-Janion successor Janion, Green & Co.

1881: Robert Janion dies, company control goes to Davies. Davies incorporates his sugar and other operations.

1898: Theo H. Davies dies.

1973: Hong Kong-based Jardine Matheson Co. Ltd. buys Theo Davies; further diversifies holdings.

1984: Davies exits sugar industry, selling Hamakua Sugar to company executive Francis Morgan for nearly $70 million; proceeds used to expand remaining interests.

2003: Jardine moves to sell Theo Davies' restaurant, automotive and heavy-equipment businesses.

A prospectus for its quick-service restaurant business, a reported $100 million sale of six auto dealerships and rumored sale of a heavy-equipment business seem to signal the absolute end of a former Big Five Hawaii company.

The story of Theo H. Davies & Co. Ltd. began the day Theophilus Harris Davies landed in Hawaii aboard the Dutch bark Quatre Bras in 1857. He was 23 years old and had suffered failures while working in a counting house in his home in England.

The son of a minister well-schooled in grammar and the Bible, he was less adept at mathematics and was offered a fresh start as a shipping clerk at a British-owned trading company in Honolulu: Janion, Green & Co.

The company's predecessor, Starkey, Janion & Co., founded in 1845, is credited as being the forerunner of Theo Davies.

Starkey & Janion had business through China with Jardine Matheson Co. Ltd. of Hong Kong in those earlier days, as Hawaii was even then a major trans-shipment port.

Little by little Davies worked his way up in Janion-Green. After company principal Robert Janion returned to England to stay, Davies looked after Janion's interests in the business, which Davies felt Green was squandering on bad investments.

Eventually the Janion-Green partnership was dissolved and Davies became Janion's partner.

In 1876, Davies incorporated Honolulu Iron Works with Janion, Janion's wife, Green's mother and Alexander Young.

Janion died in 1881, leaving Davies in control, and Davies brought corporate structure to the partnerships that made up his growing sugar interests.

Along the way, he also made his own personal investments, until friends speculated he was well on his way to becoming a millionaire.

Succession through subsequent generations of Davies heirs saw the boom and decline of sugar. In 1973, as there were no further family members interested in running the business, the company was sold to Jardine Matheson.

Stanley Hong, now president of Waste Management of Hawaii Inc., served Theo Davies as general counsel and vice president at the time of the sale.

"It was a friendly takeover because the Davies family and stockholders were in favor of the sale," he said. He doesn't remember the value of the transaction.

Hong moved to Hong Kong for two years to learn the Jardine Matheson ropes.

"It was a great experience for me to be able to move to Hong Kong and to learn how global the economy really was, because I had never been to Asia up to that point," Hong said.

He returned to Hawaii in 1976 and continued to serve as general counsel for Davies and as vice president of administration.

"The company continued to grow, and then we acquired the Mercedes-Benz franchise and also acquired Pizza Hut, Taco Bell, and later they acquired Jaguar and other different lines of cars," he said.

But Hawaiian sugar was in trouble. In 1984, a company executive, the late Francis Morgan, bought Hamakua Sugar from Davies for a reported $70 million.

"He thought sugar would last forever," said former Big Five honcho J.W.A. "Doc" Buyers, now principal of D. Buyers Enterprises LLC.

The Theo H. Davies building was built in 1921.

All the Big Five companies were involved in sugar production and were owners of California & Hawaii Sugar, a California sugar refinery. Alexander & Baldwin later bought the others out, Buyers said.

"The Big Five pretty much did things the same, a little bit here, a little bit there, often going in different directions, but they always stuck with sugar," Buyers said. "The first one to get out of sugar was Theo H. Davies. It changed the company and their relationship with the Big Five.

"They became their own company," he said.

Pacific Machinery is Theo Davies' distributor for Caterpillar heavy equipment for Hawaii and Guam. "And of course they did the maintenance and repair for all Caterpillar products in Hawaii and Guam," Hong said. The division provided substantial revenue for the Hong Kong-based parent.

"Theo Davies sort of introduced Jardine Matheson to Caterpillar and as a result, other Jardine ports like Australia and Singapore and others, they also became Caterpillar distributors, and also Mercedes-Benz," Hong said.

Maui Land & Pine Chairman David Heenan was at Davies' helm from 1982 to 1995, overseeing and nurturing the diversification process.

"During my tenure, it was primarily repositioning a fairly sleepy sugar operation into a more diverse, hopefully more aggressive marketing-oriented service company," Heenan said. He described Pacific Machinery as the biggest business unit of Theo Davies.

The Theo H. Davies New Honolulu Iron Works building in Kakaako was later replaced by One Waterfront Plaza. In 1876, Davies incorporated Honolulu Iron Works with four others, including Robert Janion and Alexander Young.

"All of the companies, to the last of my knowledge, are very strong franchises, very dominant in their marketplace," Heenan said. "Caterpillar, Pizza Hut, Taco Bell, the Mandarin, Mercedes, Jaguar -- they're a purposely put-together collection of very powerful leading brand names."

Among the powerful names in Hawaii, Theo Davies is no small potatoes, but it appears it will disappear with impending sales.

"(Jardine is) not concerned really any longer about Hawaii," Buyers said. "We might as well call a spade a spade. We're not a big enough deal for them. Things have changed."

Reports of Jardine's almost total withdrawal from Hawaii do not surprise Heenan. "I think companies are always reevaluating," he said, and a huge, multinational company like Jardine has to determine where to put emphasis. "Priorities, over time, shift," he said.

Even though Davies has not been a Hawaii company for decades, "it is, to a certain extent, rather sad to see Theo Davies literally disappear because it's an old kamaaina company," Heenan said.

Jardine will not be completely withdrawing from Hawaii with the sale of Theo Davies' assets. It still owns a 40 percent interest in the chain that operates the Kahala Mandarin Oriental.

Theo Davies has a long history in Hawaii, and while its name may eventually disappear from the business scene, its legacy remains archived at H 338.76 H, in a book on the shelves of the Hawaii State Public Library.

The book "Davies: The Inside Story of a British-American Family in the Pacific and its Business Enterprise," written by Edwin P. Hoyt, chronicles the family and its business through the early 1970s.


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