Easy does it: Offering how-to kits and in-aisle education, sundries manufacturers are making it easy to tackle projects
The paint sundries category is big, accounting for $3.1 billion in U.S. sales in 2006, according to the Paint and Decorators Retailers Association.
With those kinds of numbers, it’s no surprise that manufacturers and retailers are constantly looking to upgrade their assortments to reach new and existing customers—both professionals and DIYers alike.
Brushes are the dominant element of the sundries category, with more than $613 million in sales last year. Other big sellers in 2006 were roller covers, with $519 million in sales; caulks and sealants, with $454.6 million; and hand tools, with $434.6 million.
The innovation in the sundries category covers brushes and extends well beyond to areas including caulk and spackle, and even tape is seeing new developments and trends. One trend within the sundries category that has manufacturers excited involves kits: packages containing all the tools and materials needed to do complete household repair and faux finish projects.
Purdy now carries a four-piece painters kit, including a brush, roller, roller cover and pan.
“Painter kits are growing in popularity, and this product fills a large gap in the marketplace by combining premium, professional-quality tools into a single item at an attractive price,” said Tom Hatcher, senior product manager for Purdy. Hatcher said that consumers often purchase good quality paint and then use low quality applicators to finish the job. “Now, that same consumer can get professional-grade tools in a specially priced kit.”
Even the well-known “For Dummies” brand offers a wall and ceiling repair kit, complete with spackle, tools, tape, mesh and a how-to guide.
“I think it’s been a great way for manufacturers to slice and dice your product to help out consumers, but that’s only half the equation. It’s one thing to select the right tools for the consumer, but it’s another to provide the information on how to do it,” said Susan Moehl, director of new product development for Welco, the manufacturing company licensed to produce the “For Dummies” repair kits.
The “For Dummies” brand has been a publisher of how-to guides since 1991 with the release of its “DOS For Dummies” book. Welco negotiated the exclusive rights to use the “For Dummies” brand two years ago to bring the kits into the market. Moehl compared the pairing with the “For Dummies” brand as the equivalent of receiving the “Good Housekeeping” seal of approval. “Only it’s more hip,” she said.
The company will be releasing two more kits into the market soon; “Complete Interior Paint Kit For Dummies” and “Trim and Tight Spots Paint Kit For Dummies.”
According to Hyde Tools, consumers are increasingly seeking more information about what type of paint applicator or tools are best for the job. Manufacturers and retailers have reacted by providing education materials as part of their in-store displays.
“There’s a growing interest in increasing sales at the point of sale,” said Karen Wilson, a spokeswoman for Hyde.
According to Wilson, more effort is being put into the sophistication of displays. Education, packaging and marketing is a huge and growing change in the market she said.
“The Home Improvement Research Institute and other market observers now consider in-aisle communications to be the number one vehicle for informing consumer purchase decisions,” Wilson said. “Of course people still read and use the Internet and ask friends for advice about products. But more and more, they rely on packaging, signs and store personnel to guide their choice of products; helpful aspects for the consumer.
“You’re going to see more and more kits and more and more merchandising,” said Wilson.
True Value, for example, has seen the importance of marketing sundries prominently. In a recently launched new store format, the co-op displayed colorful paint rollers prominently by size and kind, packaging paint tools alongside a centralized, up-front paint color center.
At newly revamped Benjamin Moore stores in Pennsylvania, paint tools and supplies—including all-in-one packages—were given an easy-to-find spot in the store. The stores included special signs designating “faux finishing products,” “tools & supplies” and “wallcovering supplies.”
Another new marketing angel, the “green” trend, is getting more and more attention in sundries.
“The drive toward sustainable products is a major corporate objective for retailers in every channel. Wal-Mart, for example, is serious about minimizing packaging and giving floor space (and advertising time) to sustainable products,” Wilson said.
Wilson said that Home Depot has recently started carrying Hyde’s PaintMiser, a new hand tool designed to help use up to 7 percent more paint per can by scraping it back into the can from around the edges and sides. While that may seem like a small amount for DIYers who paint once every few years, for contractors and professionals, the savings can add up fast.
Wilson said it will also reduce the amount of paint that ends up in landfills. “Discarded paint is the number one cause of household hazardous waste,” she said.
The sundries category is also seeing an increase in house brands and private label merchandise.
“Every one of the major retailers does it,” said Howard Soled of Allway Tools. “It’s a trend; it’s not one that we like. We and our competitors have worked very hard to build up our brand as one that people know and can depend on. We don’t like this trend, but we go along with it because it’s profitable.”
While private label has often been associated with low cost/low quality, Soled said there has been an increased interest by retailers to contract well-known manufacturers to offer higher-end house brands.
Lumber Liquidators closes IPO
Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.
The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.
The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.
Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.
Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.
The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”
NKT Holdings withdraws initial public offering
Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.
The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.
The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.
The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.
NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.