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A bright idea?

BY Brae Canlen

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Every week, Bob Rosenzweig gets emails from irate consumers who accidently stepped on CFL light bulbs and had to visit the hospital emergency room because of mercury poisoning. Other U.S. citizens resent the federal government dictating what lights bulbs they can and cannot buy. And then there are the Europeans, who haven’t been able to buy incandescent bulbs for years.

They all contact Rosenzweig because his South Carolina factory, AAMSCO Lighting, makes a commercial-grade incandescent light bulb that fits within the Energy Independence and Security Act regulations. “We decided to stop and read the [regulations], and it turned out there was an exception,” said Rosenzweig, who worked for GE’s commercial lighting division before starting AAMSCO in Summerville, S.C.

The AAMSCO bulb has a brass base and is sturdier on the outside. It contains non-hazardous materials on the inside, making it, in many people’s opinions, a superior choice over existing energy-saving light bulbs. The bulbs and the packaging are both made in South Carolina assembly plants. And at $1.65 for a 100-watt bulb, they are affordable for consumers who want that option.

Most of AAMSCO’s sales are over the Internet. “We sell (100-watt) bulbs in 23 countries,” said Rosenzweig. “It’s crazy over there in Europe.” Both Texas and South Carolina made an attempt to block the federal mandate to phase out older incandescents, but neither state was successful. But the resulting popularity put AAMSCO, which vowed to continue making 100-watt bulbs for consumers, in the national spotlight.

“We wanted people to know it’s not criminal to buy a 100-watt light bulb,” Rosenzweig explained.

More to the point, it’s entirely legal for consumers to buy commercial bulbs, which Rosenzweig and other manufacturers — including Sylvania, GE and Feit — continue to make. Homeowners just have to be willing to pay a little more for “rough surface” bulbs.

One big difference between AAMSCO and the larger lighting manufacturers is politics: Rosenzweig doesn’t have to toe the line about energy efficiency. And his factory in South Carolina is the only U.S.-based plant that makes the 100-watt bulbs. This, combined with the proposed South Carolina legislation, got him mentioned in both GQ magazine and the New York Times. AAMSCO’s website got so many hits after the articles that they crashed the server. Rush Limbaugh’s people also phoned. Rosenzweig, a transplant from Queens, N.Y., who would stick out at a Tea Party rally, never returned the call.

Although he could clearly capitalize on this niche, Rosenzweig is only running production on this line three days a week. He does have plans to expand manufacturing, but first he has to make some minor changes to the design. Then he hopes to ramp up to 1,500 to 1,600 a day and perhaps hook up with a regional distributor. His website (aamsco.com) also needs some work, he said.

But Rosenzweig is not about to neglect his other product lines, which include a number of commercial bulbs exempt from the new regulations. His obvious favorite, Ferrowatt, required trips to Prague and Vienna to reclaim the family’s original lighting business. Ferrowatt now produces antique reproductions of lighting fixtures and light bulbs for movie sets, hotel restoration projects, vintage railroad lines and other specialty jobs.

Seized by the Nazis after his Uncle Otto fled Europe during World War II, the Ferrowatt factory eventually became a Socialist book repository in Czechoslovakia. After the fall of Communism, Rosenzweig was able to recover an old piece of machinery in the Czech Republic and also the company brand. One look at the Ferrowatt line, many of them one-of-a-kind creations, explains why. 

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The dawn of a new HCN

BY Ken Clark

On Jan. 13, 1975, National Home Center News published its very first issue, which was described on the masthead as “A newspaper for retailers serving homeowners and contractors.”

Competing for attention on page one were a handful of stories of varying degrees of historical value — from the activities of 84 Lumber’s most recent corporate Christmas party (logrolling, tobacco spitting) to a profile of Dart Home Center’s help-yourself warehouse approach in Charlottesville, Va.

Also on page one, a reader roundup of retailer strategies: “Home centers plan new slump tactics.” Companies were getting lean, and it turns out they were right to do so. Residential construction in 1975 would produce a mere 1.165 million housing starts, the lowest figure up to that time since the government began keeping track in 1959.

Ladies and gentlemen, there was no such thing as Home Depot. Lowe’s was a chain of contractor-focused lumberyards. ProBuild was decades from climbing to the top of the pro dealer list.

Times have changed. And HCN has changed with them.

For example, in 1996, recognizing the power of the World Wide Web, we launched NHCN online. In 2004, we changed our title to Home Channel News, a response to the massive consolidation of the home center business. In 2010, we stepped up our news mission with HCN Daily, bringing industry news and views to the inbox of an industry clamoring for timely information. Earlier this year, we launched HardwareStoreConnect.com, a professional, high-tech industry forum for hardware store owners and operators.

Our next evolutionary step will take its place at the front of the line with all the others. We’re calling it, “Extreme makeover: HCN edition.” Beginning in December, you’ll notice the following:

• New look and feel: Our art directors went to town on the design of the logo, the cover, the sections. They’ve created bigger pages to better display the products that generate traffic, sales and margin opportunities.

• New structure: We took a hard look at the publishing business and realized we can’t keep doing the same old thing. Future issues will rely on three components: news analysis fit for a monthly magazine and a busy readership, product reports for retailers looking for an edge on the shelves, and market intelligence for business people to make better decisions.

• New name: HCN.

Today our research tells us that our print readers want the information to help them grow their businesses. We intend to deliver.

Our hands itch to get started.

For almost 40 years, the editors of the information delivery system that is now HCN and HCN Daily have had a front-row seat to some of the most amazing innovations in retail, and some equally amazing housing industry stories. They saw the rise of the warehouse home centers, the entry and retreat of established retailers into home improvement space, the explosion of spending on the house and home, and — of course — the housing bust that makes 1975 look like a walk in the park.

Here’s a prediction: Businesses that sell products to homeowners and contractors haven’t seen the last shift of their paradigms. We will be there to cover it online, as well as in print.

— Ken Clark
[email protected]

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HIRI event starts strong, raises cautions

BY HBSDEALER Staff

Chicago — Before the first speaker could take the podium at the Home Improvement Research Institute (HIRI) Fall Conference, a residential construction report for September stole the show with news of a 15.0% increase in total starts.

The tone was set. One presenter pointed to an average forecast of 924,000 starts in 2013, a figure drawn from 10 estimates ranging from a high of 1.1 million and a low of 800,000.

But home improvement retailers were also warned of various challenges — among them were the rise of the mass merchant and the move to online shopping.

A Stevenson Co. presentation pointed to the emergence of discount retailers as a source for home improvement project materials (see chart). Lurana McParland of Stevenson described the 27% shopping rate for stores such as Walmart, Target and Meijer as a possible “game changer” for home improvement retailing. And Walmart is going hard at home improvement with a Projects Made Simple that blends in store simplicity with online details.

Amazon, meanwhile, is expected to expand in home improvement. Keep an eye on Amazon’s Subscribe & Save program, according to Kantar’s Laura Kennedy. It’s an automatic-replenishment program that started in grocery and is spreading to new categories — including the hardware store staple of pet supplies — with 5% to 15% discounts. The online giant is also looking to “snag pros” with a replenishment program called Amazon Supply, she said.

Hardware stores were offered a slice of good news, also. As Kantar stats showed 11% of all shoppers said they are visiting hardware stores more often than they did in the previous year, younger customers said it more. Generation Y had 13% step up their hardware store shopping, and Generation X had 14% do the same.

Hovering over all the numbers are societal trends that are changing the way we shop. As a result, home product marketers need to adapt to a world of instant communication and online damage control, according to Winston Ledet, chief operating officer for Premium Retail Solutions and former Home Depot merchant.

Almost 40% of consumers are using social media to research home improvement, Ledet said. “If you’re not managing this part of your business, then you’re leaving a huge amount of value on the table.”

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