Growing up with Orgill
Billy Plyler remembers when Orgill was a one-warehouse operation that sold furniture and flooring as well as hardware, plumbing and electrical. “I was little when my daddy used to buy from them,” recalled Plyler, whose father founded John Plyler Home Center in Glenwood, Ark., shortly after World War II. Located 97 miles from Little Rock, Plyler Home Center splits its business 60/40 between DIY and pro customers in this town of approximately 1,700 residents.
Both companies have grown considerably since then: Orgill has expanded into a number of product categories (but dropped furniture and floor covering) and operates five distribution centers across the country; and Plyler Home Center has acquired local businesses or incorporated buildings to form a 20,000-sq.-ft. showroom, hardware store, lumberyard and warehouse. Billy and his brother Johnny run the operation, with Billy’s wife Diane working as the bookkeeper and daughter Brandie in charge of accounts receivable, circulars and appliances.
Dealers who have decades-long affiliations with distributors and co-ops can often become disgruntled; they complain about an erosion in quality or they don’t approve of other changes they’ve seen. This is clearly not the case with Plyler, who applauds — and participates in — many of the programs Orgill has added over the years. He pays close attention to the “Priced Right Every Day” matrix and adjusts his prices accordingly. Most importantly, Orgill helps him keep a close eye on the prices at Home Depot and Walmart, his closest competitors.
“If we find something that’s not priced right, [Orgill] will send somebody out there to check it out and adjust it,” Plyler said. His favorite program, however, seems to be the Memphis-based distributor’s circulars. The Plylers like the “build your own” template, which gives them the freedom to choose as many of Orgill’s promotional items as they want.
“Sometimes we’ll change a few items, and sometimes we’ll change every item,” Plyler said. The store has also used the circular template for special events of its own, such as an anniversary sale.
These days, with new construction at a virtual standstill in his area, John Plyler Home Center uses its circulars to promote the kind of projects its customers are tackling: new decks, bathroom upgrades and, above all else, repainting. “We’re seeing a lot of little projects,” Plyler said. “Like the little girl who has grown from a 6-year-old to a 16-year-old, and she wants her bedroom redone. That’s 4 gallons of paint and the trim to go with it.”
Among single stores that buy from Orgill, John Plyler Home Center is the distributor’s largest seller of Valspar paint. Between Lumbermens Merchandising Corp. (LMC) and Orgill, Plyler supplies his entire home center. One exception is major appliances, which come from another distributor.
It’s the appliance circulars that underscore the attributes in Orgill’s program. “They come premade,” explained Brandie Killian, who puts together all the advertising inserts. It doesn’t matter what the home center typically carries; dealers must also pay to use photos of the products.
In comparison, any item sold at an Orgill show lends its photo for free in the circulars. And preparing a circular does not have to involve bulked-up orders unless the dealer wants to promote a particular set of products. “We can make them accordingly to what we have in the store,” Killian said.
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Orgill grows on Woodstock
Woodstock Home & Hardware prides itself on the fact that you can buy animal feed and Brazilian cherry patio furniture. Its assortment is so wide that one of its mottos is: “If we don’t have it, you don’t need it.” The home center keeps refreshing its other axioms, as evidenced by the ever-changing advice on the sign out front. A recent offering: “Avoid the crowds, the riots and the pepper spray. Shop local!”
Ironically, a large percentage of owner Larry Perry’s customers are not full-time residents of Woodstock, Vt.; more than 50% of homes in the community are vacation homes, according to the dealer. Yet 2011, measured by sales, was the second-best year ever for Woodstock Home & Hardware. “We were up in every category but one,” Perry said. “The second homeowners are starting to open their wallets. People are starting to spend again.”
Woodstock Home & Hardware began using Orgill as a secondary supplier in 2000 for locally popular items that Perry’s Ace warehouse didn’t carry. But over the past decade, his business with the Memphis distributor has grown. By 2005, Orgill was the source of 20% of his inventory, and now it’s about half, Perry estimated. (A third wholesaler, a small New Hampshire-based co-op named Standard Hardware, also supplies some items to the Vermont store.)
“Over the years, Orgill has become more and more important to us,” Perry said. “Their pricing on most stuff is competitive, and they carry some things that others don’t. It helps us round out our inventory. And [Orgill’s] inventory mix has expanded tremendously in the past few years.”
While assortment is important to Perry, having the ability to purchase items in small quantities is just as crucial, he said. “At 9,000 sq. ft., we’re a bit larger than the average Northeast [hardware] store,” he explained. His 60/40 split between DIYers and pros means serving a wide audience. Orgill’s liberal policy of breaking case on most items means that Perry can order a single plumbing elbow in different sizes, and offer three different SKUs of Titebond glue to his woodworking customers.
“We try to have a broad selection,” Perry explained. “It’s a space issue, not a dollar value issue.”
Perry likes getting two deliveries a week, one from Ace and one from Orgill. He also believes in sending his employees (his staff totals 15, including six buyers) to visit spring and fall markets, and four shows a year give him plenty of opportunity.
“[Orgill’s] shows have become as big as the [co-op] shows,” Perry said. “They’re doing pallet alley, and their drop-ship orders don’t have any adders (freight charges) on them.”
This past winter, when New England got clobbered by snow, Perry used both his wholesalers to stay on top of demand for shovels, ice melt, snow blowers and the usual defense mechanisms against Mother Nature’s wrath. He has nothing but praise for the distribution centers of both his main suppliers, who arranged special deliveries of merchandise to keep his shelves full and his cash registers humming. Even Standard Hardware came through. “They had roof rakes,” Perry said.
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Islands of opportunity
The Caribbean island of Tortola in the British Virgin Islands is known throughout the world as a vacation destination with remarkable beaches and unbeatable sailing and diving.
For Micheal Thomas, the second-generation general manager of CTL Home Center, Tortola is also an island of home improvement opportunity. It is here where the company’s transformation from plumbing supply house to showroom to full-service LBM dealer and home center is under way.
It’s also here where the challenges of the high cost of imports and competition from suppliers in the neighboring U.S. territories of St. Thomas and Puerto Rico have combined to keep the company sharp, especially in maintaining its customer base and controlling the cost of shipping, freight and import duties.
“We have to have prices that make sense to our customers,” Thomas said. “Our operating costs here are higher than they are in those U.S. islands. But we’re able to manage that. And our customers tell us they appreciate us. We even get some from St. Thomas.”
The business was founded by Thomas’ father Clarence Thomas, who ran a plumbing construction business in the 1960s and found a ready market for imported materials left over at his job sites. After Clarence Thomas Ltd was founded in 1967, the business transformed steadily, expanding to contracting and marine supplies and adding a location on the island of Virgin Gorda in 1996.
Today, the company that has been shaped mightily by geographic and political boundaries is on the verge of another big step in its evolution.
Thomas and his team, which includes his brother David, who heads the IT and marketing functions, are bringing a new dimension to their offering and to the island in the form of a drive-through lumberyard — phase one of a larger transformation to step up home improvement and building material distribution in the BVI.
“We took a hard look at the future of this business and this island,” Thomas said. “And the next logical step for us to complete the cycle was to add a lumberyard.”
Early efforts about five years ago to sell lumber from a shed at the Tortola location weren’t paying off. But taking the advice of a colleague in the industry, Thomas took a trip to Louisiana to visit the widely respected operation of Stine Lumber. What he saw made an impression in a couple of ways.
“I never met [the Stines] before, but a lot of our retail concepts were the same,” Thomas said. “Then we went through the lumberyard, and I said, ‘This is it.’ It makes all the sense in the world.”
He listed some of the benefits of a drive-through lumberyard: It’s organized to sell, it’s weather-proof, and it’s convenient for the staff and customer. The facility in Louisiana was designed by Ron Johnson, who has made a name for himself as an authority on and designer of drive-through yards. CTL engaged Johnson for an 11,000-sq.-ft. project on the site of a competitor’s hardware store that closed last year.
In December 2010, CTL’s drive-through lumberyard opened. The challenge of training new people in a new field was daunting, but Thomas likes what he sees so far, describing the addition as a “dry run” for an even bigger project on the drawing board.
CTL is continuing its business evolution. And it already has the blueprints drawn up for a facility that Thomas describes as a game changer for the industry in the BVI. The new home center will consolidate the two existing Tortola stores in one location just a little outside the island’s major city of Road Town in an area called Fish Bay. The new version of the 45-year-old business will combine a larger drive-through lumberyard and a larger home improvement center — totaling about 50,000 sq. ft. Located on waterfront property, the facility will allow customers to carry merchandise by boat back to their home or project. It’s about a year away, but expectations are running high.
“It’s going to change the face of retailing in the BVI,” Thomas said. “Our plan right now is to build a comprehensive offering to serve customers’ projects from the ground up. And I’m just looking forward to bringing our store concept to more people.”
The setting may be unusual, but the retail principles are familiar, according to David Thomas, marketing manager for CTL Home Center: Your people, your products and your service determine success.
“We’ve done our best to give our customers really great products, really great pricing and keep the stores looking good and comfortable to shop,” David Thomas said.
CTL describes Orgill as the company’s primary supplier, and estimates that more than 60% of its inventory is ordered through the Memphis, Tenn.-based distributor.
Several years ago, when Home Depot opened in St. Thomas, Orgill representatives arrived on the scene to develop a price strategy with CTL to find competitive and margin opportunities. And last month, Orgill’s team provided new planograms for the Virgin Gorda store. “They came in and reset the entire store. We can already see that it’s made a big difference.”
While building is at a lull across the British Virgin Islands, sales have grown about 5% a year in the last two years. While it’s not the high-margin areas of plumbing and construction, housewares is one of the fastest-growing categories for the company.
“We’re growing, even in the bad economy,” Micheal Thomas said.
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