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PDIS to address credit management, post-bankruptcy collections

BY HBSDEALER Staff

Tough times require tight fiscal policies, as many dealers have learned during the spate of recent builder bankruptcies. The ProDealer Industry Summit will address this topic in a session called, “Running a Tight Credit and Collections Operation,” scheduled for Oct. 3 in Chantilly, Va.

Two speakers will approach the issue from different angles and address issues that affect businesses of all sizes, from single lumberyards to multi-state chains. Diana Perenza, vp and credit manager of Florence Building Materials in Huntington, N.Y., will offer strategies to improve accounts receivable, as well as tips on when to extend or cut off credit and how to double check a credit report and evaluate a new client. Perenza is a paralegal who has lobbied, at both the state and national level, to reform lien and bankruptcy laws.

Annie Catmull, a Houston-based commercial bankruptcy attorney, will advise building material dealers and suppliers on what to do after a customer files bankruptcy. An associate with Walker Wilcox Matousek, Catmull can address the issues of preserving supplier claims, joining court-appointed committees of unsecured creditors and handling demands and lawsuits from bankruptcy trustees for payments made by a customer prior to his or her bankruptcy filing. Catmull has represented debtors and creditors in chapter 7 and 11 court cases, involuntary bankruptcies, shareholders and parties purchasing assets from bankrupt entities.

The ProDealer Industry Summit, scheduled for Oct. 1 to 3, is a joint conference of the National Lumber and Building Material Dealers Association (NLBMDA) and Home Channel News. Former Speaker of the House Newt Gingrich will kick off the event at the Westfields Marriott. Ivy Zelman, one of the building industry’s most widely recognized analysts, will deliver her housing forecast and moderate a panel of industry experts.

Other educational sessions will include “The Supply Chain Revolution” and “Energy Star: What’s Next?” Jerry Howard, executive vp and CEO of the National Association of Home Builders (NAHB), will also address the summit. A golf tournament benefiting the City of Hope will round out the social networking events and tabletop exhibits. For more information about the conference, visit www.prodealer.com.

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Independents capitalize on impulse items

BY HBSDEALER Staff

Lauren Wagner, supervisor, category management for Do it Best, has a simple definition for the term “impulse item:” “something you don’t know you need until you see it.”

Falling into this category is a wide variety of products, most of them relatively small, inexpensive and easy to throw in with an order at the checkout counter. Examples include super glue, painter’s tape, night light bulbs — even ice cream — items that can be marketed on counter displays, dump bins, endcaps and clip strips. Major hardware co-ops and wholesalers have stepped up their impulse item programs in recent years, trying to capitalize on these last-minute sales.

“We’re really trying to bring the point across to members that this is an area they need to focus on,” Wagner said. “The margins are good — 50 percent or better on clip strips — and there’s quite a good turnover rate.”

Do it Best also offers “Problem Solver” planograms for each of the four seasons, including garden gloves and glass cleaner for spring; bleach pens and mosquito repellent for summer; chore gloves and lawn and leaf bags for fall; and extension cords and storm window kits for winter. The co-op also put together a series of planograms that represent the co-op’s best $1 programs, including “best of” hand tools, “best of” paint accessories and “best of” winter car care. Do it Best encourages members to market these not only as $1 items but as “10 for $10.”

“Like one sees in the grocery industry, this multiple price point really does encourage shoppers to buy in multiples of 10,” Wagner said.

Orgill also recently “reenergized” its impulse item program, according to Brett Hammers, vp-marketing. The product catalog contains more than 500 skus of clip strip, dump bin and endcap merchandise and bucket displays to help the store capture impulse sales at the product display and the point of purchase.

“We’re selling water, Gatorade, candy and other products, and we’ve expanded the program to include several drop-ship programs,” Hammers said at the company’s fall market in Chicago last month. “The nice thing is you can get into it easily. It’s more driven by customer demand than anything.”

True Value offers more than 200 planograms with more than 800 impulse items under its Visual Merchandising program, including batteries, candy, magazines, light bulbs, tape and flashlights. According to Rick Suptic, True Value’s planogram manager, industry studies have shown that items merchandised on endcaps can show a 25 percent increase in sales; items stationed at well-maintained checkouts can show an increase of more than 30 percent; and items placed in dump bins can produce a sales increase of more than 400 percent.

“We are continually updating our Visual Merchandising program and our offerings with new products and visually appealing displays, allowing our retailers easy access to the latest impulse ideas,” Suptic said.

Griffin Ace Hardware, a chain of three stores in Southern California, has two shelves of impulse items in the front of the store that vp-merchandising Kelly Hollingsworth changes frequently. There are practical products like batteries, light bulbs and tape, as well as fun novelty items like playing cards and cell phone cases — most of the items retailing for under $3. There are also six to eight clip strips at the front of each aisle related to the corresponding merchandise in those categories.

Absecon Do it Best Hardware in Absecon, N.J., carries impulse items near the main checkout counter as well, including candy, cold drinks and dollar store items. Because the store is located in a shore area, it also carries sunglasses, hats, bandanas and other related products.

“Actually, we find that the front counter is a great spot to add some extra dollars to the sale,” said owner Marilyn Weisman. “We show those inexpensive knives, the floral tools for ladies, new items, seasonal items, bug sprays, charcoal lighter, anything that the customer might have forgotten.”

Wagner believes impulse items — if done correctly — can account for 7 percent to 8 percent of a store’s sales. “They help build the average sale — and sales in general,” she said. “In challenging economic times, it’s an opportunity to continue sales as usual by looking outside the realm of traditional products.”

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Menards recalls cordless screwdrivers

BY HBSDEALER Staff

Menards has agreed to the recall of about 42,000 MasterForce 3.6-volt cordless screwdrivers due to an overheating problem.

The product reportedly can overheat and ignite during charging, posing a fire and burn hazard to consumers, due to a lack of overheating protection around the screwdriver’s lithium battery.

There have been three reports of fires and one report of a consumer suffering burns on the hand. Another consumer has reported suffering temporary hearing loss.

The recalled cordless screwdrivers are green and gray in color. They were manufactured in China and sold in Menards stores from Apirl 2007 through May 2008. The screwdrivers retailed for around $30.

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