Kingfisher to tap Russian DIY market
Kingfisher, parent of U.K.-based big box home improvement chain B&Q, has announced plans to expand in Russia, according to a report by BBC News.
Kingfisher will open 50 stores in Russia under the Castorama banner over the next 10 years. The company now operates four stores in Russia, with one planned to open next month in Moscow.
The expansion plan is expected to cost 250 million pounds ($511.6 million).
According to the report, Kingfisher said the Russian DIY and home furnishing market is strong and could be worth 10 billion pounds ($20.4 billion), while it is estimated to be growing by 12 percent a year.
Kingfisher operates stores across Europe with banners including B&Q, Castorama, Brico Depot, Screwfix Direct, Trade Depot and Hornbach.
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Benjamin Moore Revamps Stores in ‘No Excuses’ Market
KING OF PRUSSIA, PA. —Benjamin Moore acquired seven Finnaren & Haley retail paint stores in the Philadelphia area last month. In doing so, the $176 million retail arm of the company’s paint and coatings business bolstered its presence in what it believes is a can’t-miss market, while offering a glimpse of its overall store design strategy.
“What’s happening now in the city of Philadelphia is a huge boom in building, especially in the downtown area, but also in the suburbs,” said Frank Strano, a market general manager for Benjamin Moore. “We call it a ‘no excuses’ market, in that there’s no excuse why we shouldn’t be successful here. Philadelphia is popping.”
Benjamin Moore acquired five F & H stores in greater Philadelphia and two in New Jersey. The acquisition also includes the F & H architectural coatings brand name but does not include its factory. F & H operates 15 other locations in the Delaware Valley region.
As a Berkshire-Hathaway company, Benjamin Moore prefers measured responses even while a market like Philadelphia appears to be heating up fast, according to Ed Klein, vp-retailing for Benjamin Moore.
“We’ve had a strong brand awareness in that market. There’s been a lot of consolidation in that market, but this wasn’t a knee-jerk reaction to some of the acquisitions that are happening,” he said. “We are about working for an independent and helping them to transition to being a premium retailer. This is a very strategic acquisition.”
Paint sector competitor Sherwin-Williams made an earlier acquisition in the middle Atlantic, only on a much-larger scale. It acquired M.A. Bruder & Sons, a manufacturer and dealer with 132 retail locations in 17 states. As HCN earlier reported, Sean Hennessy, senior vp-finance and CFO for Sherwin-Williams, said the company viewed now as the “right time” to make such an acquisition in the mid-Atlantic, in spite of a sluggish DIY market.
Benjamin Moore has sold through Finnaren & Haley stores for several years, and about a third of the company’s stores use Benjamin Moore’s signature paint store program, Strano said.
“Benjamin Moore’s [ownership] strategy is only for a short term,” Klein explained. “Our strategy is to spin those stores out to strong independents. We are not in the business of owning stores. We are in the business of fostering financially strong independents, which will be split off over an [approximately] two-year time-frame.”
Overall, the company plans to strengthen all stores it purchases by helping build them into more upscale retail centers that highlight Benjamin Moore as an upscale brand. Following that strategy, the recently acquired F & H stores will be getting a facelift designed to adjust the focus from the pro customer to the DIY customer.
Benjamin Moore has already helped transition existing F & H stores that carry its “signature” program into more upscale, DIY locations.
To illustrate the point, Strano and Regina Haley Pakradooni, a third-generation president of F & H, led HCN on a tour of two F & H stores—one “before” and one “after” a retail-focused renovation.
At the “before” store, located in Exton, Pa., the interior was clearly made for professional dealers. Utilitarian displays, chip racks and lighting surrounded a prominent, up-front cash register and service desk. The paint-mixing area was separated from the store by a large plastic curtain, making it difficult for employees to see the entrance while mixing paint.
At the “after” store, located in Paoli, Pa., racks and lighting were more aesthetically pleasing, with products organized by signs in categories such as “Wallcovering Supplies” and “Solvents & Removers.”
An area in the back included a long table where customers can sit and compare paint chips next to well-lit paint chip racks. Also, the register and service desk were moved to the back of the store. That makes it easier for customers to browse the store, Haley Pakradooni explained. One of the most important changes, she added, was building a room with a window, just behind the register, where employees can see new customers enter the store while they’re mixing paint.
“It’s more than doubled our [overall] sales,” said Andrew Perrone, manager of the Paoli, Pa., store.
Before the renovation, sales at the Paoli location were about 40 percent DIY and 60 percent professional, Perrone said. Now, DIY customers account for 60 percent of sales, while 40 percent go to professionals.
In the history-rich Philadelphia market, the company has seen brisk sales of its “Historical Colors” collection, while F & H has shown strong sales of its “Historic Colors of America” collection, Haley Pakradooni said.
Another factor that made the F & H acquisition appealing was its position as a manufacturer in an environment that is more unforgiving than usual for small paint manufacturers. With paint makers having to meet stiffer requirements for making low-volatile organic compound (VOC) paint, the burden has fallen heavily on smaller, regional paint companies with fewer resources, Strano said. For that reason, Benjamin Moore is looking to possibly acquire other companies across the country that fall into the category of both manufacturer and retailer.
“We recognized, from a smaller manufacturer side, it was an opportunity for them. We’d like to transition them from a manufacturer to a retailer,” Klein said.
In addition to its deal with Benjamin Moore, Conshohocken, Pa.-based Finnaren & Haley recently has divested other interests. In June, the company announced the sale of its marine and industrial coatings assets to Carboline Co. Finnaren & Haley marine coatings are used by the U.S. Army for new construction and maintenance, and by the Army Corps of Engineers, as well as other industrial clients.
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