China as a retail frontier
(The following is a response to an article about Kingfisher’s efforts in China.)
“It took far too long for Kingfisher and HD to recognize that [China] is different and requires core rethinking. While the goal of improving living conditions is similar to western economies, the fact is that China jumped over many of the steps that led to big-box DIY in the West.
“It was difficult to make this argument 10 years ago when those in power to make decisions on investments never left their comfort zone, even when visiting China. They stayed in exclusive western-style hotels, took tours of factories and ancient tourist attractions, but never investigated Chinese life.
“In Shanghai or Shenzhen, for every two-income family able to afford a condo, there are three or four legal or illegal workers happy to do anything for $1 per hour. Because condo owners make as much as $40 an hour combined and work 60 to 70 hours per week, including side jobs, they do not see a value in the ‘pleasure’ of doing it themselves.
“The argument for showrooms over DIY big box was made to the HD execs from the inside in 2002 and in 2008 to Kingfisher from the position of a supplier. Several years and millions of dollars invested later, these two well capitalized and talent-laden companies are finally believing the facts on the ground.
“It will be amusing to see the next 10- to 20-year cycle when the Chinese showroom home improvement retailers try to bring their model to the U.S. and Europe. I am confident they will make the same kind of mistakes.”
— Name withheld
Down on Main Street
“Struggles of small businesses in today’s market are more than just tight credit, regulations and a poor economy. This inevitable crisis was years in the making while we all stood by watching.
“We live in a society in which no one wants to take responsibility for their own actions, and it is expected for someone or the government to step up and bail us out of the mess we have created. It’s as if the average American feels it is owed to them, and not because they have earned it. We have trained [people since they were children] that everybody is a winner, when in ‘real life’ that is not true.
“Lawsuits are rampant, and we settle unjustifiable suits because it makes economic sense, not because we are guilty. Therefore, we have created the ‘easy money’ plan for attorneys and plaintiffs.
“We have allowed people who cannot handle their money to file bankruptcy will little or no consequences. Small businesses are caught in the crossfire of this and are the ones that crawl away wounded or dead. Then we allow the offenders to do it all over again.
“Too many times our local governments will court the competition based upon vague promises, all under the pretense of creating jobs. Hardly ever has the government come to the local small business and asked, ‘What can we do to help you grow?’ The only time they appear is when informed of the impending closure, and they can’t understand why this store cannot make it. After all, they created all those new jobs, so you should be doing fine. How many city officials from Harrodsburg, Ky., went to Coleman Lumber and asked what they could do to help the 100-year-old company? How many Representatives or Senators looked for grant money for this company or worked on an SBA loan? The government only thinks about small companies when they are gone, and the tax revenue is no longer coming. Then they look at the rest of us to shoulder the revenue they lost.
“We need to vote in the upcoming elections for a true change, or it will never happen.”
— Arthur Mize
Associated Lumber Industries
“ ‘Too much regulation’ is such a generic, undefined broad-based sound bite that it has lost all its meaning. Let’s not forget that it’s the lack of regulation that got us into this mess. Exactly what regulation hurts retail? Health care? Minimum wage? Unemployment benefits? These costs affect everyone the same. This is simply the echoing of special interest groups with a much broader political agenda.
“The issue with the economy is unemployment and the lack of disposable income for the lower and middle classes. For years we have had access to home equity that never really existed, and now it’s time to pay the piper.”
— Frank Douwes
“Anti-business attitudes from Washington aid and abet this threat [to small business]. Underwater home value; lack of confidence in our leaders; and direction of our country, health care, taxes — as the old saying goes, ‘It is what it is.’ We will take these challenges head on and somehow succeed. Because that’s what we do.”
— Paul Gabbard
A retail visionary on retail vision
When Bernie Marcus talks, people listen. That’s one reason you can catch him on the television business news programs.
Home Channel News spoke to the co-founder of The Home Depot for the purpose of promoting the 30th anniversary of the City of Hope research and treatment facility. Of course, the conversation strayed to home improvement. One of his lessons to retailers of any stripe: Keep your eyes open.
“I visit all stores. I visit Lowe’s. I visit everybody. Walmart, Costco, I go to Menards when I’m in Chicago. It’s good to know what’s out there,” Marcus said. “One thing you have to know is nobody has a lock on brains. There are a lot of people around who have a lot of brains, and when somebody comes up with something that’s smarter than what you do, you have to adjust your business and your thinking.”
While The Marcus Foundation, his Atlanta-based charity, keeps him busy every day, Marcus said he still enjoys keeping in touch with his Home Depot executives and even walks stores with them. “I love to share with them, and they do listen to me when I’m right,” he said. “Sometimes some of the old things still work in the new world.”
All American Home Center closes its doors
All American Home Center in Downey, Calif., was famous in the home improvement industry for a number of things, chief among them its size: 150,000 sq. ft. plus an outdoor garden center. But most people admired the family-owned home center for the fact that it survived the opening of a Home Depot right next store in 1996. In fact, the two retailers have adjacent parking lots.
Lanny Gertler, whose father opened the store in 1952, remodeled the large home center several times, and All American had a loyal clientele in its working class neighborhood in Orange County. But Gertler passed away in February 2010, and last month, the retailer hired Gordon Brothers Group to liquidate the store’s inventory, a process that will run into next month. Third-generation owner Tamar Kane has given no official reason for the store’s closure, although she issued a statement that said: “Our customers have shown us great loyalty for decades, and we hope they take advantage of these incredible savings on home improvement supplies.”
Industry insiders told Home Channel News that a group of senior managers tried to buy All American from Kane but were rebuffed.
In addition to being widely known within the industry, the store was also seen by television viewers. All American served as a setting in the HBO series “Big Love,” in which it played the role of the fictitious Henrickson’s Home Plus.