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Spanning the globe with hardware

BY Ken Clark

Up until his 40th birthday, Tom Barfell had traveled in exactly one country—the United States of America. But in the subsequent 10-year stretch, he traveled to 50. That’s after he took the job as director of international sales for Do it Best. Today, his travel duties often fall to his staff, but he’s still in the air a lot, and on the ground in foreign countries applying retail best practices wherever he can.

In the last year and a half, Do it Best has added 88 international members, bringing its total count to 350. Barfell spoke to Home Channel News about traveling the globe and learning what works at home and abroad.

Home Channel News: What’s your best advice for our readers who travel a lot?

Tom Barfell: Tell somebody where you’re going. It’s simple, but that one thing has been so good to us personally and professionally. When you share details with people—places where you want to visit—they can make other recommendations or show you other places, and it really helps you build relationships.

HCN: That’s simple advice. Has it worked?

Barfell: It has, and it’s difficult to build relationships with all the challenges—the distances, the language barriers, the cultural differences. But the relationships are more than a just a vendor relationship. It’ not just, “OK, I want you to buy something.” And that is the biggest reason for our success.

HCN: How would you quantify your success?

Barfell: Not counting last year with the difficult economy, we were enjoying double-digit growth. And in our most recent quarter in 2010, we saw a 25% increase in revenue.

HCN: How are the international stores different?

Barfell: In a lot of places, we used to call them “counter stores.” That means a 200-sq.-ft. showroom and a counter, where people would bring a faucet and say, “I need one of these,” and the store employee would go into the back and get one. We’ve done several conversions of these kinds of stores. But there’s been a big change. In fact, if you walk into some of our international stores, even in places where you may not expect it, they are as nice as any store we have anywhere.

They also don’t have Walmart or Kmart in these markets, and the international stores want those housewares and homewares in their product mix.

HCN: What do the good ones do?

Barfell: One example from Honduras—the owner is a great ambassador for us. The first thing he’ll tell our prospective members is: “You gotta do the whole thing.” It’s not just design, it’s not just the fixtures. It’s not just the pictures on the wall. It’s the whole concept.

HCN: Today you’re in the Caribbean, Mexico, Latin America. Do you intend to expand?

Barfell: We’ve been successful, I think, because we know the areas of the world that need us. We’re not in Europe—not that we won’t be there someday—because we know they have good distribution, good infrastructure, good branding. On the other hand, in the Bahamas, there’s an opportunity.

HCN: You’ve talked about what works internationally. But what doesn’t work?

Barfell: Well, we learned that you can’t take an American store and drop it in Thailand. You can take parts of it, but you must customize. Our stores in Panama are not the same as in Mexico, or anywhere in Central America or the Caribbean.

HCN: What can our domestic stores learn from the successful international players?

Barfell: If there’s one thing they can learn, it’s that if it can work in Tegucigalpa, Honduras, it can work anywhere. And another thing we say: The reason to join a co-op is to take advantage of everything they have to offer.

INTERNATIONAL VOICES: RETAIL IS SPOKEN HERE

In Panama and Honduras, a couple of international members of Do it Best Corp. have made some groundbreaking advances in home improvement retailing.

Ivan Cohen, owner of 13 Do it Centers in Panama, said there was a time about 20 years ago when he didn’t even know cooperatives existed. Today, the growth-minded member believes the Do it Center is a household name.

“Now, I think I can say it, all Panamanians have been to one of our stores more than once.”

The key has been the ability to differentiate itself from the competition, and lean on the resources—design and otherwise—of Do it Best. The design program at Do it Best for has been an essential factor in the chain’s development, he said.

“From the outside look of the store that really impacts the customer, as well as when they come in and where they find the dump bins, where they find the power aisles and the endcaps the way they are set,” he said. “It really makes a difference.”

Panama’s Do it Centers have a very clear growth program—double the size in the next four years.

“Everybody is in line with that target,” Cohen said.

About 10 years ago, Ernesto Benedeck’s Do it Center in Tegucigalpa, Honduras, made an important retail advance for hardware stores in his Central American country. It introduced shopping in the aisles.

“We were one of the first help-yourself-type stores in Honduras,” Benedeck said. “It was really the first home center, and I think it changed how people here looked at hardware stores.”

Benedeck’s Indufesa Do it Center chain has grown to four locations, and he’s currently building a fifth store in San Pedro Sula, the country’s industrial center. Of course, the competition didn’t sit still either. But Benedeck has continued to refine his model, and rolled out one for the first fully branded Signature Store designs in 2007.

The company operated without the benefit of an American co-op for about 15 years.

“We’ve learned a lot from Do it Best,” he said. “We heard about the co-ops and Do it Best and Ace and True Value, but we really didn’t think that there was very much to learn, and we were wrong. If we had taken the decision to join an American co-op, I think that would have saved us a lot of trouble.”

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Pending home sales rise modestly in July

BY HBSDEALER Staff

The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, according to the National Association of Realtors (NAR).

The index, released Thursday, is 19.1% below June 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months, according to the NAR.

Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

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Suspects stalled by flat tires

BY HBSDEALER Staff

Two men suspected of stealing power tools from a Southern California Home Depot were arrested on Aug. 20 after their getaway vehicle developed two flat tires.

Deputies from the Victorville Police Station, summoned by store personnel, arrived at the Home Depot on Bear Valley Road shortly before noon to find a black SUV leaving the scene. One suspect attempted to drive the car, which had two flat tires, along an adjoining road but soon fled the vehicle on foot. He was arrested by sheriff deputies.

Asecond suspect was detained in the parking lot of the store.

Inside the SUV, law enforcement officers found electric drills valued at more than $2,000 that had been allegedly stolen earlier that day at another Home Depot store in Victorville.

Arrested for commercial burglary were Jose Munoz, 34, and Rolando Martinez, 39, both from Los Angeles. The suspects are known gang members, according to authorities.

Karen Hunt, a spokeswoman for the Victorville Sheriff’s Department, told Home Channel News that the commercial burglary charges stem from the suspects’ “intent to steal,” as opposed to “spur of the moment” shoplifting. As for the flat tires, “They tried to drive over an embankment in order to get away the deputies and loss prevention [personnel],” Hunt said.

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