Sears Appliance & Hardware sets sights on smaller format
Sears Hometown and Outlet Stores has opened a new Sears Appliance & Hardware location in Dallas, Texas, that will mark the debut of a smaller-format store prototype for the brand — as well as a spate of new franchise opportunities.
Citing market research that favors the neighborhood hardware store model, the company announced last week that the Dallas store — which is the first new Sears Appliance & Hardware location to be built in the past decade — will set the standard for all new locations.
Sears Hometown and Outlet Stores CMO David Buckley explained to HCN that extra square footage isn’t necessary to be profitable in hardware, where convenience and customer-centric experiences are favored. Indeed, the additional rent is perhaps one of the biggest obstacles faced by independents and co-ops.
“Today’s retail landscape is comprised of mostly big boxes or more intimate neighborhood store experiences," said Buckley. "There aren’t many players in the middle still in business.”
The smaller model will offer a similar inventory, but in substantially less square footage (compare the original SAH model of 22-25,000 sq. ft. to the new version of 16-18,000 sq. ft.). Instead, a higher premium will be placed on showcasing best-sellers through a consultative sales process, while making items that are unavailable in the store easily ordered and delivered to the customer.
“You don’t have to have everything on the sales floor, but in the case of hardware stores, you need [project necessities] on-hand," said Buckley. "We’re able to offer a convenient and relevant hardware assortment, as well as an experience that’s differentiated from most hardware stores: one that’s more convenient and more centered around the customer.”
The new location in Dallas is owned by Dave Maggio and Michael Donohoe, who have previously purchased Sears Appliance & Hardware locations throughout the country.
"Though we saw a great need locally for a Sears Appliance & Hardware Store, there were no existing company-owned locations for us to acquire," said Maggio in a company release. "When we heard that Sears Hometown and Outlet Stores was interested in rolling out a smaller, neighborhood model, we knew this smaller version of the Sears Appliance & Hardware Store format would fill a void in the Northwest Dallas area. Our new store embraces the feel and customer service of a neighborhood hardware store, without compromising on the reach of our merchandise assortment."
The smaller, neighborhood model was first introduced a couple of years ago via a test-run of sorts at a converted store in Holland, Mich. In addition to the Dallas location, the new format is also moving to Big Rapids, Mich. and Cedar City, Utah, though the company is forgoing an aggressive expansion process.
"Although we have plans to open more stores, we also plan to do so responsibly to ensure we apply our learnings from each opening to maximize the investment of our franchisees and to deliver best in class service," SHOS DVP Rudy Mazak told HCN. "We think [the smaller format] is more appealing to franchisees: these stores have a very relevant hardware and tool assortment to complement our existing presence in lawn and garden and appliances."
Citing a lower initial investment, the company is currently seeking potential franchisees — whether independent or franchise business owners — to continue the expansion of its new Sears Appliance & Hardware Store format.
Optimism continues among AHMA members
A survey from the Schaumburg, Ill.-based American Hardware Manufacturers Association (AHMA) found most members see sales higher than a year ago.
In comparing current sales levels to year-ago levels, 75% of respondents said sales were higher in September versus year-ago levels, according to the AHMA’s monthly survey.
In August, 77% of respondents said sales were trending higher.
Timothy S. Farrell, president and CEO of the AHMA said: “Manufacturers in the home improvement industry remain optimistic about the prospects for future sales growth. And with 75% of our members reporting that current sales levels are higher than year-ago levels, the industry is well-positioned for continued growth.”
Also for September, 13% reported sales were even, and 12% said sales were below year-ago levels.
Looking forward six months, 63% of September respondents said they expect sales to be above current levels, up from 50% in August. In September, 37% of respondents said they expect sales to be even in six months and none expects sales to be below current levels.
Changes in the light bulb aisle
Government mandates will raise prices on light bulbs in the near term, but “they should be going down as production increases,” said Houston Bowlin, House-Hasson product manager for lighting.
“We’re heading into an era of compact fluorescent lights (CFL); halogen, and light emitting diode (LED) lighting,” Bowlin said. “They’re supposed to be long lasting but they haven’t yet been around as long as they’re supposed to last, so time will reveal the accuracy of those estimates.
“On the plus side, the newer bulbs are brighter, the light’s clearer, the output is better, and there’s no heat. But anything you break is going to be expensive to replace.”
The standard 40-watt incandescent bulb will continue to be produced, as well as several other types of bulbs, but if sales of those bulbs increase dramatically the law allows for those exemptions to be withdrawn and production made to cease, Bowlin said.
“With the banned incandescent bulbs there is no ‘cannot sell after’ date, so stores can put them on the shelves until they’re gone,” he said.
Don Hasson said that end users with questions have a great resource in the hardware store and lumberyard dealers.
“They’re professionals,” he said, “and we know how hard they’re working, and how hard we’re working with them, to try to make sure their customers have the information they need.”
House-Hasson Hardware is a privately owned hardware distributor headquartered in Knoxville, Tenn., with about $200 million in annual sales.