Roark acquires home improvement installers
A nationwide network of home improvement installers has been acquired by Roark Capital Group, a private equity firm that owns some of the best-known restaurant franchises in the nation. Roark’s plans for The Home Service Store (HSS), which already provides installation services for Lumber Liquidators, Costco and BJ’s Wholesale Club, are equally ambitious; the Atlanta-based investment firm has put Robert Sheft, who helped develop Home Depot’s first foray into installed sales, in charge of its expansion plans.
Sheft now serves as group managing director at Roark, a position he has held since 2007. But in 1998, Sheft was CEO of RMA Home Services, a replacement windows and siding business that Home Depot hired to conduct a pilot with seven stores in North Carolina. Eventually the windows and siding installation became a nationwide program, and Home Depot bought the business from Sheft in 2003.
Sheft’s background in home improvement services will be instrumental in casting a wider net for HSS, which contracts primarily with national retailers. Relying on a network of independent contractors, it coordinates installation jobs for its partners with a system that calculates pricing, processes payments and manages the service. In some cases, HSS generates leads and sales. The Kennesaw, Ga.-based company, which facilitated more than 39,000 jobs in 2011, handles flooring installations for Lumber Liquidators, as well as other home improvement products for Costco.com and BJ’s, including flooring, windows, siding and insulation.
“We’re more than network aggregators,” said Sheft, who believes that the current model, with some tweaking, can be used “across multiple channels.” One example might be a financial services firm that wants to offer home installation in tandem with some of its other products — or, perhaps, a manufacturer.
“We’re developing some front-end software that will put more discipline into the sales process,” Sheft explained. The HSS — which is retaining its original management team, led by Mark Ilderton — hopes to build on its national footprint. “We are offering a very attractive way to reach the customer,” said Sheft, who will serve as executive chairman.
Roark Capital owns approximately 21 franchise/multi-unit brands across 50 states, including Arby’s, Batteries Plus, Carvel Ice Cream, Cinnabon, Corner Bakery, Fast Signs, Il Fornaio and Schlotzsky’s. The firm has more than $2.7 billion of equity capital under management.
Hilti Proshops exit Home Depot stores
In a sea of orange smocks, the Hilti store-within-a-store format at many Home Depots had injected a splash of red-shirted Hilti sales reps.
That color combination is fading to black, as Tulsa, Okla.-based Hilti’s “Proshops,” as they are called, are pulling out of the world’s largest home improvement retailer.
The Hilti Proshops had been a fixture at Home Depot for about 13 years. Hilti products will continue to be available online through the Atlanta-based retail giant.
The decision to split was mutual, said Hilti spokeswoman Carla Briggs.
“Over the past month, the Home Depot and Hilti have reviewed our business arrangement in light of the fast-changing retail industry and our respective business models and objectives,” Briggs said.
Hilti, which has more than 1,100 direct sales force team members and 105 Hilti Center locations, said it will not look for another retailer to take Home Depot’s place. Nor would the company describe the level of sales generated by its Proshops in Home Depot.
Liquidating more than the floor
Lumber Liquidators says it has about 10% to 11% of the flooring market in its wood categories — hardwoods and laminates — and a respectable 1% of all flooring. The company wants more, and one tried-and-true strategy is to broaden the assortment along with the product mix.
That includes tools.
“We are bringing in all the [tools] that you need to complete your project,” said president and CEO Robert Lynch during a Goldman Sachs investor conference in September.
At the helm of the effort is the chief merchant, Bill Schlegel. The company has expanded into vinyl and laminates, and its catalog has 51 new floors, Lynch said.
On the tool side, the merchandising team is optimizing assortments and looking for revenue. DIY installation starter kit buckets sell for about $30; oscillating multi-tools, laminate floor cutters appear along the old stand by floor nailers and staplers.
“The floor is the driver,” Lynch said, “but we want to make sure we are definitely giving the customer everything they need on that. And that will definitely increase tickets and help us with the comps, too.”