Our dealer of the year
In a little less than two months, Gaithersburg, Md.-based TW Perry CEO Michael Cassidy will be called to a podium at the Grand Hyatt in San Antonio, Texas, during the 2011 ProDealer Industry Summit, an event hosted jointly by the National Lumber & Building Material Dealers Association (NLBMDA) and Home Channel News.
Somebody will give him a plaque. Bulbs will flash. If the professional event planners are on the ball — and there is every reason to believe they are — it will be arranged that Cassidy accept the plaque with his left hand, while shaking the hand of the presenter with his right.
The plaque has not been ordered yet, but it will be engraved along the lines of: “TW Perry: 2011 Pro Dealer of the Year.”
(Note to event staff: Please follow through on this.)
I will use this space to explain why TW Perry has been selected. But first — paraphrasing Ivy League deans of admission — the editors claim no extraordinary powers of judgment. Selection is a very difficult process. There are many worthy candidates in the United States who can make a claim for an award based on the criteria of high-performance, innovation and commitment to the values of the lumber business. And there is only one spot for Pro Dealer of the Year.
Having said that, let us also say this: We’re proud of our choice.
TW Perry is ranked 33rd on the Home Channel News Pro Dealer Scoreboard, with 2010 sales of $107.7 million. The six-unit dealer had double-digit sales gains in 2010, and is looking to repeat that feat in 2011. The company is celebrating its 100th anniversary in 2011. (See HCN’s July 4 article: “A hundred years, and growing.”)
During a recent interview in the company’s headquarters, Cassidy revealed an impressive familiarity with industry statistics, something that he said is part of the culture at TW Perry.
“Everybody requires it of themselves,” Cassidy said. “They need to know their business, quantitatively — not just intuition and experience. So when we have a meeting, we decide right then, and we go.”
One of the stats that Cassidy shared reflects on the nature of TW Perry as a “destination employer.” Of the 337 employees, the company has about 32 who have at least one other family member on the payroll. Another group of stats reveals a management team that’s both young and experienced — an average age of 46, but with an average of 22 years in the industry, 16 with TW Perry. “This team can be intact for the next 22 years, and it has 22 years behind it,” he said.
Of course, numbers are only part of the story.
“We have a theory of running this company upside down,” Cassidy said. “The customer is at the top, the person interacting with the customer is next. The CEO is at the very bottom of this work chart.”
Enter Jaime Villanueva, the 26-year-old store manager of the S branch, for a quick quiz:
CEO: “Who owns the store next door?”
Store manager: “I do.”
Cassidy is a crusader for decentralized, upside down, entrepreneurial, fast-acting management. And it’s the kind of management he believes is built to succeed in tough times.
“Bigger isn’t better. Better is better,” he said.
We agree. And we look forward to congratulating the TW Perry team Oct. 26 to 28 in San Antonio.
— Ken Clark
Lowe’s seeks addition by subtraction
On the eve of the company’s second-quarter earnings announcement, Lowe’s closed seven underperforming stores.
Shuttered are locations in Meriden, Conn.; Riverdale, Ga.; Elgin and Schaumburg, Ill.; Kenai, Alaska.; Cambridge, Minn.; and Ticonderoga N.Y.
Obviously, the move upset the affected communities. For instance, Alaska Senator Lisa Murkowski complained of the lack of notice. But CEO Robert Niblock is paid to make tough decisions, which is how he described the seven closings.
“It was a fiscally responsible decision to further strengthen our financial position and drive shareholder value,” Niblock told analysts, the day after employees were informed.
Responding to a request to elaborate, Niblock said the slower-than-expected economic recovery factored into the decision. “We didn’t think there was enough opportunity in those markets to get those stores operating at the level that we need to,” he said.
Lowe’s opened two new stores in the quarter ended July 29, bringing its total count as of that time to 1,753 stores in the United States, Canada and Mexico.
Quality information — just when it is needed most
I’ve been in the home improvement industry for 25 years, and I cannot remember a time with so much divergent information on where we stand and where we are heading.
In late July I read a projection from the Joint Center for Housing Studies at Harvard, which reported that annual remodeling spending through the first quarter of 2012 will be down 4.0%. That is not encouraging for the industry. Then in mid-August I read a release from BuildFax saying that remodeling in June was at the highest level since it started measuring it in 2004, and it grew 23% year over year in July. Now that’s a completely different picture! What should one make of this and, more importantly, what are the opportunity areas?
Just in time to provide information in this period of great uncertainty comes the 2011 HIRI Home Improvement Industry Summit. The event will be held in Chicago Oct. 19 to 20. It will be a very different experience for those who are used to going to a typical industry show with some seminars added on. For attendees at this year’s summit, it will be a day-and-a-half immersed in important insights into the industry, where we stand and where we are going.
My take on the industry is that we have moderate growth in 2011. The most recent data from the U.S. Census Bureau show retail sales for building material and garden equipment and supplies dealers (NAICS 444) to be up 5.1% through July. This is somewhat higher than HIRI’s current forecast for the year (soon to be updated). Are we declining? Probably not. Are we growing at a rate of 23%. Almost definitely not.
So where in this environment do companies turn for growth? It comes down to understanding where there is demand and how customers are changing so you can meet their needs. That is where this year’s industry summit will help greatly. Included on the agenda for day one are:
• An update on the housing market from Zelman and Associates;
• Insights on the direction of the economy and its implications for home improvement from UBS;
• The current pulse of consumer plans for home improvement activity, primarily based on a proprietary monthly HIRI study done by NPD;
• The latest trends driving home improvement based on a HIRI study done by The Futures Company;
• The impact of the aging baby boom generation from data gathered by AARP;
• Changes to how consumers approach home improvement projects from before the downturn until today, as learned in a HIRI study done by Synovate research;
• The latest on how the Internet is being used within home improvement, from HIRI studies done by Decision Analyst; and
• A detailed look at what the various generations are buying and how they do their shopping from TraQline – The Stevenson Co..
Day two (morning) is equally packed with great information. Two tracks will be running simultaneously one with content coordinated by Home Channel News and the other by Hanley-Wood. Day two’s highlights include:
Not only will this be the premier event for information on our industry, it will also be a chance to celebrate an important milestone for HIRI: 30 years of service to the industry. As a nonprofit member organization, HIRI has and continues to pioneer vital research into how homes are maintained, repaired and improved. A celebration dinner will be held the first night of the summit at the beautiful Chicago aquarium.
More information and registration is available at www.HIRI.org.
Hope to see you there.
A 24-year industry veteran, Fred Miller is the managing director of the Home Improvement Research Institute (HIRI). He can be reached at [email protected]