Ritchie Bros. Auctioneers Inc.
Address:
9200 Bridgeport Road
Richmond, British Columbia, V6X 1S1
Canada
Telephone: (604) 273-7564
Fax: (604) 273-6873
http://www.rbauction.com
Statistics:
Public Company
Incorporated: 1963
Employees: 500
Operating Revenues: $106.1 million (2000)
Stock Exchanges: New York
Ticker Symbol: RBA
NAIC: 453999 Auctioneering, with Own Facilities, Open to the General Public; 561990 Auctioneering Service, on a Commission or Fee Basis, Not Done on Own Facilities (Except Currency and Tobacco)
Company Perspectives:
We've shown the world our innovative auction methods, our attention to detail, and our total commitment to the unreserved auction. This reputation for fair and honest auctions has instilled a confidence in our customers that they can count on Ritchie Bros. to deliver the results that they have come to expect.
Key Dates:
1962: The Ritchie brothers hold their first auction.
1963: Company is incorporated.
1987: Company's first auction abroad is held in Liverpool, England.
1990: Company expands to the Asia-Pacific region.
1991: The 1,000th auction milestone is reached.
1998: Ritchie Bros. goes public on the New York Stock Exchange and celebrates its 35th anniversary.
1999: Company opens offices in Nova Scotia, South Africa, Australia, and Panama; holds first auction broadcast live on the Internet.
2000: Ritchie Bros. holds its 2,000th auction and opens a facility in Chicago.
Company History:
Ritchie Bros. Auctioneers Inc. is the world's leading auctioneer of industrial equipment. With 80 locations around the globe, the company has over 300,000 customers from 190 countries in the world. Ritchie Bros. sells an array of used industrial equipment including equipment utilized in the construction, transportation, mining, forestry, petroleum, and agricultural industries. All auctions are unreserved, public auctions.
Colorful 1960s Beginnings
The modern day Ritchie Bros. bears little resemblance to its predecessor operation of humble and colorful beginnings. It all started in Kelowna, British Columbia, in 1958. Three brothers, Dave, Ken, and John Ritchie had a history of dabbling in sales. Entrepreneurs at heart, the brothers would spare no effort to finalize the deal. Brother Dave is said to have once driven 17 hours straight through to San Diego to bring a boat back to a customer.
In time, the brothers ended up running their family's small furniture store, selling new and used furniture. One day, they complained to a friend that they were short of cash and didn't know where to find the thousand dollars needed to pay the bank. The friend suggested an auction sale. Since they had excess in their furniture inventory, the brothers held their first auction sale. The event was a success; the money was raised, and the bank was paid.
The Ritchie brothers soon began running an auction every Thursday night. It was hard work, as the furniture was heavy, and the new furniture had to be moved upstairs every Thursday to make room for the sale items. After the sale was over, the brothers would open a case of beer and begin moving the new furniture downstairs again. In the beginning, the brothers hired an auctioneer. However, the time came when the auctioneer was unavailable, so Ken Ritchie decided to do the auctioning himself. Before long, the brothers were not only organizing the auctions but doing the auctioning as well.
As their reputation grew, the Ritchies received invitations to hold sales throughout the district, and thereby moved into the disposal of forest industry plants and equipment. In turn, that brought them in contact with heavy equipment used in road building. In 1962, the Ritchie brothers noticed a void in the industrial end of the auction business and decided to try their hand in that area. They had to put up $50,000 for their first industrial auction. For years, they remembered how hard they worked in Canada's north country to get equipment to market. That first equipment auction realized a $250,000 profit.
A new milestone was reached in 1963 when the Ritchies held a highly successful industrial auction in Radium Hot Springs, British Columbia, selling over $600,000 worth of equipment. That year, the Ritchie's incorporated their thriving business. The following year, Dave Ritchie moved to the Lower Mainland to open an office in Vancouver. Ken and John remained in Kelowna and continued to play an active role in the business.
The early Canadian auctions were fraught with hazards that made for good stories. For example, there was the time Dave Ritchie went to Watson Lake in the Yukon and had to 'walk out the big cats' (get the large equipment out) by building a makeshift ice bridge. On another occasion, he drove a truck for 250 miles at ten miles an hour during the frigid, Canadian winter.
The auctions themselves were events. A summertime auction held at Watson Lake was the social event of the year. Everyone in town attended, along with some 500 people from other areas. After the auction, the Ritchies rented the bridal suite of the local hotel and hosted what the Vancouver Province described as a 'rafter-rousing party.' At another auction, held during a heavy snowstorm, bidders sat in their cars and honked their horns to indicate a bid. An auction held (with permission) in Kootenay National Park to auction road-building equipment ended with a steak barbecue for 300 bidders.
The earliest auctions had a 'show-biz' flavor. The auctioneers, wearing orange hunting caps, kept up a steady patter of chatter while pieces of heavy equipment were sold. Speakers blared forth bouncy tunes and marches to energize the crowd while vendors circulated, selling drinks and snacks. After the auctions ended, the brothers packed up, like a circus, and moved the equipment out. As time passed, the auctions took on a more businesslike atmosphere, the 'show biz' elements were abandoned.
Items typically sold at a Ritchie auction included tractors, hydraulic cranes, rock crushers, trailers, cars, trucks, aircraft, and camping equipment. Ritchie auctions were always unreserved auctions. The Vancouver Province quoted John Ritchie as explaining, 'No reserves. No limits. No buybacks. You buy as is. Only guarantee is a clear title.'
These early auctions were held in British Columbia, and there were only a few a year. However, following the success of the Radium Hot Springs auction, the Ritchie brothers began expanding their operations eastward. They operated sales in Alberta in 1964, Saskatchewan in 1965, Manitoba in 1966, and eastern Canada thereafter. Breaking into French speaking Quebec was a challenge, but one that was soon overcome.
The Corporate 1970s
By the early 1970s, Ritchie Bros. Auctioneers employed 25 people and was handling sales approaching C$1.5 million. Major sales were carefully planned. Ritchie employees visited the site two months ahead of the sale; they carefully cataloged the equipment, inspected it, and prepared advertising and brochures that guaranteed that the items offered were as described. The sales also featured on-spot financing for those who needed it. Remarking on the increasing organizational expertise at a Ritchie Bros. sale, one spokesperson noted in the Vancouver Province that 'All the major finance companies set up trailers on the site, and there is real competition for business.' The sales began attracting bidders from Canada, the United States, and Central and South America.
In 1970, the Ritchies held their first auction sale in the United States in Beaverton, Oregon. Some C$110,000 worth of equipment was sold at the auction, marking the beginning of an expansion in North America that lasted for two decades.
By 1975, the economy in British Columbia was in a slump. Construction had slowed down severely and little road building was taking place. Many businesses were closing shop or leaving the province for greener pastures. In an interview with BC Business Magazine, Dave Ritchie said, 'What saves our company is, we don't rely on the buyers in BC to support us any more. We rely on the guys from Phoenix, Toronto and Edmonton. The bulk of BC contractors are working out of Alberta, now. More and more of them are moving over there. In every sale we've had here, better than 50% of the equipment has gone out of the province, 20--30% to the States, 20--30% to the rest of Canada.'
1980s--90s: International Expansion
For the next two decades, Ritchie Bros. continued to expand, forging into Europe, Asia, Australia, and the Middle East. The company opened sales offices in the Netherlands, Sweden, England, Germany, France, the Philippines, Australia, and the United Arab Emirates.
At home, in 1981, the company held a record-breaking sale of C$8 million in Edmonton, Alberta. The Vancouver Province reported that the company's sales had risen from $1 million a year in 1963 to a projected $100 million. Ritchie Bros. was ranked first in Canada based on volume of sales and at about fourth in North America. By that time, the company was handling about 50 percent of the auctioning of mining, forestry, oil, and machine shop equipment in Canada. Moreover, the company maintained permanent auction sites in Kamloops, British Columbia; Edmonton, Alberta; and Montreal, Quebec, as well as an operation in Portland, Oregon.
During this time, Ritchie Bros. received some of its first unfavorable press, when critics noted that the auction company thrived only when somebody somewhere went out of business. A company spokesperson, quoted in the Globe and Mail, admitted that 'When times are good, we do well. When times are tough, we do better.' However, he noted, 'Ritchie Brothers helps bankrupt companies realize some money for their debtors.'
In 1987, the company held its first Ritchie Bros. auction in Europe. The sale, held in Liverpool, England, sold off equipment that had been used to rebuild the infrastructure of the Falkland Islands following the war there. Later that year, the company held its first auction in The Netherlands.
The 1990s brought several interesting auctions, along with further international expansion. In 1990, Ritchie Bros. began conducting unreserved auctions throughout the Asia-Pacific region. Ritchie auctions were held in Australia, New Zealand, the Philippines, Hong Kong, Japan, and Thailand. Moreover, Ritchie Bros. auctioned more than 20 hectares of new and used equipment accumulated by Exxon during the cleanup of the Exxon Valdez oil spill in Prince William Sound. Exxon sold most of its equipment to Ritchie Bros. for an undisclosed price, and over 8,000 bidders from around the world registered for this sale held in Anchorage, Alaska. Bidders were given a 335-page catalogue to keep track of the items, while auctioneers used a rolling, elevated, glass-enclosed booth to move through the crowds.
In 1991, Ritchie Bros. held its 1000th auction. Some of the more memorable auctions held over the next few years included the 1993 auction in Nyborg, Denmark, at which Ritchie Bros. auctioned the equipment used to build the Storebaelt Western Channel Crossing. In Hong Kong in 1996, the company auctioned the equipment used in the platform construction of the Chek Lap Kok Airport, and in 1997, Ritchie Bros. conducted Australia's largest auction to sell off mining equipment from Leo & Green Pty. Ltd. in Brisbane.
The year 1997 was particularly active for the company. In June, the auctioneers conducted a sale in Prince Edward Island, Canada, to auction the equipment used in the building of the Confederation Bridge, the bridge linking the island to the mainland of Canada. Also that month, the company held its first auction in Yokusuka City, Japan, followed, in October, by its first auction in the Middle East in Dubai, United Arab Emirates.
December 1997 marked another first for Ritchie Bros, when the company held its first videolink auction. This three-way auction allowed bidders at St. Paul, Minnesota, Beloit, Illinois and Kansas City, Missouri, to bid on equipment at any of the locations via live video conferencing. Each location provided 52-inch video screens featuring the Sony TriniCom 5100 video conferencing system. Regional manager Will Marsh said in a press release, 'This is an industry first, and we're proud to make that first step in bringing industrial auctions into the high tech world. It's been years in the making.'
Embracing a high-tech approach to the auction business, in late 1997 the company launched what they described as a new and improved user-friendly web page. The new site allowed visitors to enter a profile of equipment that interested them, then, on their next visit, they could instantly see where and when that equipment would be auctioned in the future. The site also offered full color brochures, an up-to-date auction calendar, and the ability to print out a 'sale day' catalog.
In March 1998, Ritchie Bros. went public with an offering on the New York Stock Exchange. The offering was a success and the capital raised went towards expanding the network of facilities and to upgrade existing facilities. The next month, the company opened a new facility in Atlanta, Georgia. In September, Ritchie Bros. expanded in Canada, opening a 65-acre site at Bolton, Ontario. The new site, replacing a former Ritchie site a few minutes away, was said to be a state-of-the-art facility and the first of its kind in Canada. The facility featured 40 acres for equipment display, a 2,000-car parking lot, and seating capacity for 1,000 people. The Bolton grand opening was held in conjunction with Ritchie Bros. 35-year anniversary.
During the third quarter of 1998, the Ritchie team held its largest auction in its history. Held in Olympia, Washington, the sale grossed over $21 million. Shortly afterwards, in November, the company broke its own record, this time in Rotterdam, The Netherlands, with a sale garnering over $59 million.
In February 1999, the company purchased Forke Auctioneers, a major auctioneer of industrial equipment with headquarters in Lincoln, Nebraska. This was the first acquisition in Ritchie Bros.'s 36-year history. The Forke acquisition added sites in Florida, North Carolina, and New Mexico to the company's existing 21 sites and also provided it with the option to assume leases held by Forke on a number of auction sites.
In March 1999 the company broadcast an auction live on the Internet for the first time. The event took place during ConExpo, the Las Vegas-based premier construction and construction materials exposition. During the first two days of the show, Ritchie Bros. broadcast an auction live from Olympia, Washington, which was followed, on the third day, by broadcast of an auction in Las Vegas.
During ConExpo, Ritchie Bros. launched another update to their web site. The new site featured on-line absentee bidding. Absentee bidding had been possible previously by phone or fax, but now bidders could place their absentee bids on the web site. With live Internet broadcasting, the bidders could watch the auctions on the web and know immediately whether the bid was successful. Ritchie Bros. reported its first successful absentee bid placed over the Internet during the ConExpo auction. A buyer from Oregon placed an absentee bid on Ritchie Bros.' new web page and ended up being the successful buyer.
Also in 1999, Ritchie Bros. expanded to new markets in South America and Asia. It opened new offices in Panama and Singapore and held first-ever auctions in these locations.
The 21st Century
In 2000, Ritchie Bros. continued expansion, opening sales offices in South Africa, Jordan, and Saudi Arabia. New sites in the United States were under development in Los Angeles, Chicago, Baltimore, and Phoenix, while in Canada new sites were projected in Montreal and Edmonton. Further afield, the company hoped to establish new presences in Dubai and Singapore. In a press release to Business Wire, CEO David Ritchie said 'Since 1997, we have invested over $100 million in our network of auction sites and increased our infrastructure in order to take Ritchie Bros. to the next level. We are about two-thirds the way through our current aggressive expansion program and I believe we are better positioned than ever to take advantage of future opportunities in the used equipment market.'
In December 2000, the company experienced a new record-breaking auction at its site in Bolton, Ontario. There Ritchie Bros. realized gross auction sales of $30 million, making it the largest sale ever held by the company in Canada. Shortly thereafter, Ritchie Brothers conducted its largest agricultural sale in company history in Stratford, Ontario. After completing its final auction for 2000, the company had achieved record gross auction sales just over $1.23 billion for the year.
With 20 permanent auction sites, five regional auction units, and over 80 sales offices, Ritchie Bros. planned to continue expanding its operations globally while remaining committed to the quality of service that has worked effectively over the years. All Ritchie auctions were unreserved, meaning that the company guaranteed there would be no reserve bids, no minimums, and no owner buy-backs. Additionally, the company planned to continue offering comprehensive services covering all consignment details, including inspection and appraisals, marketing and advertising, repair or refurbish plans, lien searches, and the collection of sale day proceeds for the seller.
Principal Competitors: Neff Corporation; FreeMarkets, Inc.; Western Power and Equipment Corporation.
Further Reading:
'Bruce, Alex, 'Ritchie Auctions Pull in Millions,' Globe & Mail, December 8, 1984.
Ford, Ashley, 'Going Once, Going Twice,' Vancouver Province, May 10, 1981.
Hays, Walt, 'BC Auctioneer Gets Big Spill-Cleanup Job,' Los Angeles Times, October 11, 1990.
Moir, Nikki, 'Nothing's Too Big For Them,' Vancouver Province, January 5, 1972.
Nutt, Rod, 'Ritchie Bros. to Acquire Forke Auctioneers in U.S.,' Vancouver Sun, February 23, 1999.
------, 'Tough Times for Many Boon to Auction,' Vancouver Sun, November 12, 1998.
'Ritchie Bros. Auctions Increase As Companies Leave,' BC Business, September 1975, p. 23.
'Ritchie Bros. to Celebrate 35th Anniversary Year,' press release, March 4, 1998.
'Ritchie IPO Makes Splash on NYSE', Vancouver Sun, March 11, 1998.
Taylor, Len, 'Auction Kings Started Small,' Vancouver Province, July 3, 1974, p. 13.
Source: International Directory of Company Histories, Vol. 41. St. James Press, 2001.
