Frank Filmeck, president and CEO of Busy Beaver, talks like a modern-day retailer who has been running a hardware store for several decades. But he joined the regional chain — which is marking its 50th anniversary this year — in 2002. Before that, he worked for ICI/Glidden Paint as a senior VP, handling such companies as Home Depot, Sears, Walmart and Kmart. Filmeck still remembers what it was like to sit in an airport — in this case, Cleveland — and wait for a flight that would take him to a meeting with Menards. But now he presides over a chain of 15 stores in Pennsylvania, Ohio and West Virginia with chairman Chuck Bender, who purchased the company in 1984 with a team of investors, and is active in strategic decisions.
You worked closely with the big boxes, and now you compete against them. Did you take away any lessons that help you now, as a retailer?
When the big boxes moved into the market, a lot of panic set in. [Independents] started putting in some things that didn’t make a lot of sense. They got away from the core DIY [assortment].
Can you give me some examples?
Towels, sheets, other domestics. It confused the customer.
Who is Busy Beaver’s main customer?
People think because our name is Busy Beaver we have this big contractor following. But our business is almost all DIY and has been for a long time.
Tell me about your remodeled store in Canton, Ohio. You’re testing out some new concepts there?
It’s a 35,000-sq.-ft. store with an outdoor lumberyard, but we noticed that we weren’t selling much lumber and building materials. So we said, ‘Let’s really make it into a hardware store.’ So we put in new fixtures and made it easier to shop. We moved lumber inside the store and de-emphasized the longer length [boards].
I noticed that the vast majority of the products in your recent circular are outdoor living.
Lawn and garden has been the fastest growing part of our business. We have a monstrous five-year plan to double it. If you don’t have that kind of plan, it won’t happen.
What kind of changes will that require?
We know it’s going to require some changes to our stores. We’ve always sold annuals and perennials, but now we’re adding shrubs, trees, big planters, soils and mulches. Commerce is our supplier for much of lawn and garden.
You’re not affiliated with any of the co-ops or buying groups.
We use Orgill and Emery-Waterhouse, and do a fair amount of importing ourselves. We have our own distribution center [in Ambridge, Pa.], which greatly enhances our buying power. But it’s not a stocking DC; things come in and get redistributed immediately.
You worked for Glidden Paint for 17 years, yet none of your stores carry the brand. Why is that?
On Glidden, we only needed one national brand in addition to our private label. We put it out for bid, and Sherwin-Williams gave us a better overall program. I still have a fondness in my heart for Glidden. We do carry Liquid Nails, which is part of the Glidden family.
Tell me about your buying staff.
We have four merchandise managers, director of purchasing Mike Slobodnik, and two re-order buyers. I make sure that our buyers understand that although we are a small regional player, we can still negotiate hard and get the best deal that we can.
What else gives you a competitive edge?
We train our people not to avoid customers, or to point to products, or ask yes or no questions. Instead they ask, ‘What are you working on today?’ It’s project selling.
How do you measure the results?
We secret shop our stores twice a month. If we have an individual who cannot or will not do these things, usually they don’t last very long. We measure customer service all the time through surveys.
What do you look for in an employee?
We use a predictive index [test] before hiring employees. It can tell us things like whether they’re shy or introverted, or willing to take risks. For example, we have floor-ready [receiving] stock. We do audits now and then, but if a company has a near 100% [accuracy] rate, they blow right through to the sales floor. All of our replenishment is automated at the point of sale.
That’s pretty sophisticated for a company of your size.
We [also] have our own loyalty card program where customers earn points and [then] rebates on purchases. I’ve signed off on $500 in rebates. Although that’s not typical, of course.
How about the company’s financial metrics?
Well, our average ticket was up 64 cents in the first quarter, and sales were up 4%.
You spoke about your five-year plan. What about the immediate future?
We’d love to expand, but that’s not in our two-year plan. But if we find the right place at the right cost in a small town where we can put a hardware store, that’s what we’ll do.