Yank Saves U.K. Lens Maker: It Wins An Oscar
By CHARLES GOLDSMITH
Staff Reporter, THE WALL STREET JOURNAL, March 23, 2000
LEICESTER, England - When Les Zellan set out to buy a battered camera-lens factory, he never dreamed it would win an Oscar. But he already knew how to make a dramatic entrance.
And so it was, on a crisp, sunny day in March 1997, that Mr. Zellan breezed through the door at a Bank of Scotland branch at Trafalgar Square, opened a carrying bag and plunked two big lenses down on the desk of a bank officer. He wanted a loan for GBP 800,000 (1.3 million euros).
He had some strikes against him: He was an American. He wore jeans, a bright yellow shirt and a 20-year-old red tie. He had a beard and seemed poorly prepared. His calling card: "a very short business plan with almost no information a all," recalls the banker, Charles Wighton.
It might have been a scene out of a Jimmy Stewart movie: Against all odds, a modest Everyman scrapes together some money, rescues a small-town factory and becomes a local hero. But that's exactly what Mr. Zellan pulled off with Cooke Optics, a Leicester, England-based company whose new line of movie-camera lenses this month received an Oscar for technical excellence at a black-tie dinner in Beverly Hills.
The main event in the Academy Awards, of course, is this Sunday's telecast, where starlets and directors will take center stage. But Cooke lenses are also the talk of Tinseltown. They were deployed in the new Leonardo DiCaprio movie "The Beach," and created a buzz about "The Hurricane," the recent film about former boxer Rubin "Hurricane" Carter. "They're razor sharp but also very flattering on skin tones," says cinematographer Dick Pope, who used Cooke's new S4 lenses on multiple Oscar nominee "Topsy Turvy."
Few could have predicted this turn of events a decade ago. Although Cooke lenses have a rich history - explorer Ernest Shackleton used them for still photos during his 1907 expedition to the South Pole - the company had fallen on hard times by 1990. Cooke Optics's mainstay zoom lenses had gone out of fashion in Hollywood. And the company's owner, Rank Organization PLC, had let the business slide.
"The place was so run down that seagull feathers would float down through holes in the roof," says Steve Walsh, a veteran of 37 years in Cooke's glass-cutting shop. "The place came very close to shutting down," a shivering thought to dozens of workers in this faded Victorian city.
Enter Mr. Zellan, a former theater-lighting specialist who became Cooke's U.S. distributor in the early 1980s. Over the years, he had visited the turn-of-the-century factory, strolled around its workshops and chatted with craftsmen who were meticulously polishing circles of glass. He fell in love.
"As soon as I saw the place, I wanted to buy it," says the 50-year-old Mr. Zellan, a burly but soft-spoken man who lives in the New York bedroom suburb of Mountain Lakes, New Jersey.
More than romance was at work. As Mr. Zellan saw it, Cooke Optics produced marvelous movie-camera lenses but had failed to live up to its full business potential. That conviction grew during a trip to a Hollywood trade show in June 1996, where Mr. Zellan hooked up with a Cooke project manager, James Moultrie.
Mr. Moultrie had some prototypes that he wanted Mr. Zellan to see. They weren't ready to be shown to the public, so the two men met in a hotel room in nearby Santa Monica. There, Mr. Moultrie spread out early versions of the S4 series of "prime," or non-zoom, lenses. Mr. Zellan trained a director's viewer finder on the lenses and saw a gold mine.
The prototypes clearly answered a demand at many film studios, which were then seeking to match the quality achieved with the Primo, an acclaimed lens made by Panavision Inc. of Woodland Hills, California. Panavision only rents its equipment out through a closed distribution system, so operators outside the system wanted a new lens to fit rival cameras made by Germany's Arriflex and Austria's Moviecam.
Mr. Zellan's "first reaction was that it would be a great product - providing that Cooke could actually get down to making and marketing them effectively," recalls Mr. Moultrie, one of three Cooke engineers cited for the technical Oscar.
Trouble was, Cooke lenses weren't a high priority for Rank. Although Rank had funded the S4's development, Mr. Moultrie and others doubted Rank's commitment to making the new series a success.
Rank's lack of enthusiasm was hardly surprising. Rank had acquired Cooke's parent, Leicester-based precision-instrument maker Taylor, Taylor and Hobson, way back in 1946 - at a time when Rank was a broad industrial conglomerate. Rank was a leader in metrology and had an extensive film-related business. But by the 1990s, Rank was transforming itself into a giant in the leisure business; it was running resorts, casinos and the Hard Rock Cafe chain. Cooke Optics became a forgotten sideshow. A Rank spokeswoman denies that the company was indifferent toward Cooke, but acknowledges that it became "peripheral" to Rank's core activities.
Mr. Zellan had found a calling. From the day he saw the S4 prototypes, he would dedicate himself to setting Cooke Optics free. "It was clear that the lens business is a cottage industry that didn't belong in a large corporation," he says.
An early bid to buy Cooke in 1996 fell through when London investment bank Schroders PLC bought Rank Taylor Hobson and two other Rank businesses for more than GBP 50 million. Schroders was keen on Rank Taylor Hobson's precision-instrument business but apparently didn't know Cooke Optics was part of it.
"We bought Rank Taylor Hobson and found something inside called Cooke Optics," says Robert Howard, part of the management team that ran Rank Taylor Hobson for Schroders. "Cooke was hidden and very nearly buried. It had been allowed to run down and run down. I was told to get rid of it and, if necessary, shut it."
A California company that specializes in precision optics, Tinsley Laboratories Inc. of Richmond, agreed to buy Cooke in 1996. But the deal never closed because Tinsley was first swallowed up by San Jose-based Silicon Valley Group Inc., which manufactures equipment for making semiconductors. Silicon Valley Group didn't want Cooke.
That gave Mr. Zellan another opening. "I called Robert [Howard of Schroders] right away and said, `Now it's my turn.' "
At first, Mr. Howard wasn't very sympathetic. "I told Les very bluntly that I didn't think it would work, that he was too small a player," Mr. Howard recalls. "He had to convince me that he was credible."
Mr. Howard set the bar high. For starters, Mr. Zellan had to cough up a nonrefundable deposit of GBP 100,000 just to launch exclusive negotiations with Schroders. And the bank was asking more than GBP 2 million for Cooke.
It wouldn't be easy. "We certainly weren't a big player," Mr. Zellan recalls with a laugh. "We were hardly even a little player." In fact, his New Jersey-based lens-distribution company, ZGC Inc., had two employees, Mr. Zellan and his partner, Guy Genin. "We were just doing it out of passion."
Passion only goes so far with bankers. Although Mr. Zellan had some minority partners in the U.S., he needed to borrow about GBP 800,000. Three big British banks dismissed his plan as a romantic no-hoper. Several American banks rebuffed his approach, too, arguing that a loan that small wasn't worth the hassle.
Increasingly despondent, Mr. Zellan sent his sketchy proposal to the Bank of Scotland in early 1997. Mr. Wighton, the associate director of corporate banking, wasn't impressed. "My gut feeling at the time was to listen to what this chap had to say, but not to expect too much from it," he says. "But that changed when Les came through the door."
With the two Cooke S4 lenses sitting on Mr. Wighton's desk, the scheduled 30-minute meeting stretched to more than two hours. "We were surprised that an American - or anyone overseas - had so much knowledge of Cooke," Mr. Wighton says. "He had a clear knowledge of the market and a clear vision of the company."
Still, it was touch and go. Mr. Zellan had to convince the bank that he could run the company while commuting back and forth from New Jersey. The bank also ordered up an outside marketing report on prospects for Cooke's new lenses. It glowed. The bank finally signed up in April 1998, and Mr.Zellan telephoned his wife back in New Jersey.
It was a tense moment. This "was something he wanted so much," his wife, Barbara, recalls. "If at the last minute it fell through, it would have been devastating for both of us . . . I asked, `Is it over?' And he said, `Yeah, that's it,' and I hung up the phone and cried."
Armed with the loan and backing from minority investors, Mr. Zellan bought Cooke in July and erected a new 21,000-square-foot (1,900-square-meter) plant - a bright, airy facility with a staff canteen and plenty of free parking. Oscar-winning director Richard Attenborough, who grew up in Leicester, came to the factory earlier this year to dedicate a plaque.
Cooke began to aggressively promote the new S4 lenses, and orders flowed in. The company under Mr. Zellan made pretax profit in its first year of GBP 522,000 on sales of GBP 3.2 million. (That compares with revenues of GBP 600,000 in the previous 12 months, says Mr. Zellan. No comparable profit figures are available.)
Employment nearly doubled to 60. Everyone now goes home at midday on Friday - after a meeting where even mailroom clerks and janitors are urged to voice suggestions. "The old management just didn't believe in this place," says 57-year-old Pat Webb, who joined Cooke as a depot clerk in 1964 and still works in the supplies department. "I could never really understand it."
The S4 lenses have been hailed as a breakthrough because their design makes focusing far easier. The lenses are also praised for having easier-to-use markings, those white lines that delimit the number of feet or meters to the subject.
"You have quite a nice distance in the markings between six feet, seven feet, eight feet," says Joe Dunton, vice president of the British Society of Cinematographers and owner of a London camera-and-lens rental company. He says S4 lenses also produce a very gentle depth of field.
"They're clear and sharp, and seem to read a bit more in the shadows," adds cinematographer Roger Deakins, who used S4 lenses in "The Hurricane."
The only gripe about S4 lenses, in fact, is there aren't enough of them to go around. "We now have 23 sets on back order," says Denny Clairmont, the owner of big rental house Clairmont Camera Inc. of Hollywood.
Cooke currently produces about 110 sets a year of the S4 series (list price: $100,000 per set of eight lenses). He plans to boost production, but cautions that it's tough to quickly ramp up assembly of such a precision product.
Throughout all his ups and downs, Mr. Zellan has managed to maintain an undimmed enthusiasm for Cooke's storied history, which stretches back to the 1890s. Touring the Cooke factory one recent morning, Mr. Zellan proudly points to a 1919 photograph of King George V and Queen Mary arriving at Cooke in a horse-drawn carriage. They had come to honor Cooke for its role in aerial photography during World War I.
But it's the lenses themselves that most excite Mr. Zellan. "There's something magical about lenses - how they look and feel and what they do," he says. "You can't put light in a bottle, but these lenses capture these beautiful images."
Copyright© 2000 Dow Jones & Company, Inc.
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