In Tampa area, Harvey’s Hardware turns 50
According to an article in the Tampa Tribune, Harvey’s Hardware celebrated its 50th anniversary over the weekend by playing to its strengths — a niche market in knives.
The store in Land O’ Lakes, Fla., held its annual Case & Sons Cutlery knife event, which also featured appearances from local veterans and a presentation from a Case historian.
The retailer describes itself as a classic hometown hardware store, according to the article.
Orchard’s super hardware strategy
Orchard Supply Hardware has gone through a lot of changes in its 80-year history, but the California chain — now numbering 89 units with $660.7 million in annual sales — has weathered them all. Changes in ownership, leadership, store design, color scheme and signage have come and gone. But the stores’ customers — known for their exceptional loyalty — have generally stuck with the chain.
In March 2011, Orchard’s majority owner, Sears Holdings, announced that Orchard had hired Mark Baker as its new chief executive. Baker’s curriculum vitae — former head merchant for Home Depot and, more recently, president and COO of Scotts Miracle-Gro — has observers expecting big-league initiatives from the California company. Baker had only been on the job for a few weeks when he hired Steve Mahurin, the former chief merchandising officer at True Value and another former Home Depot executive, as his head merchant.
Home Channel News caught up with Baker on Sept. 15, several days before Orchard (which has dropped the name “OSH”) opened its 89th store in south San Jose.
Home Channel News: You’ve been on the job for six months now. What have you done so far, and what are your plans for the Orchard chain?
Mark Baker: We’ve raised comps for the first time in several years. We’ve opened up three stores with the new Orchard [design]. I look forward to the opportunity to revitalize this brand and weigh the prospects for growth for California, which could easily support 30 to 40 more stores. [But] you work on a couple stores at a time, to bring the energy back to the business. We’ll be going back and redoing several other stores over the next few months.
HCN: Have you picked which locations?
Baker: The Bay Area, the LA area, and one local to San Jose.
HCN: Orchard is not a big box, nor is it a small neighborhood hardware store. Where does it fit into the whole competitive landscape?
Baker: The big-box guys are saturated in North America. The neighborhood guys, the ones who belong to the cooperatives, there are some very good operators there, some I really admire, but on the whole they’re not growing. It’s a difficult [time] for a sole entrepreneur. Orchard is the only model that exists that’s a super hardware store.
HCN: How is that an advantage? Are you offering a wider assortment?
Baker: Yes, although our [newer] stores are being merchandised with fewer SKUs. We’ll eliminate some categories, like screen doors and pet. We’ll significantly reduce our automotive section. But for the most part, it’s inventory [rationalization]. Instead of 50 hammers, we’ll have 22.
HCN: You mean that hypothetically?
Baker: No, we actually did have 50 hammers.
HCN: What are you bringing in instead?
Baker: We’re the local guy. We do very well within a three-mile radius, whether we’re close to a big box or not. We can adapt to the California consumer better than anyone else, whether they’re a mature neighborhood that wants bigger [replacement] trees or a relatively new suburb. We can adjust our merchandise very easily through our store managers. Take furnace filters. There are 80 different sets of furnace filters in our stores, depending on who built that neighborhood. We’ve recently made [that] change in our business, and [sales] have been terrific.
HCN: Is your merchandising staff set up in a traditional structure?
Baker: In a lot of regards it is. Steve Mahurin has recently joined me. He’s in the process of teaching the corporate line review process here at Orchard and starting to form line reviews. The idea is that we’re looking for better value from our suppliers and to consolidate suppliers — stronger, bigger, better — but also to learn about the California customer. Remember that the California customer is 20% of the whole U.S. population. Many of our suppliers are East Coast-based, our competitors are East Coast-based, so we’re really working hard on understanding the California timing, North and South, and getting the products to me in this market. It’s about marketing to the consumers in a different way. It’s not just about price.
HCN: Is everything undergoing a line review?
Baker: We have a calendar established for the first quarter of next year of which lines we’re going to be reviewing. In many cases there won’t be any changes; we’ll just cut the line. In some cases we’re consolidating suppliers, so we’ll work with the buyer on economies of scale, and the [better supplier] will win the business. In many cases we’ll be producing some assortments.
HCN: How big is Mahurin’s buying staff?
Baker: He has four merchandise managers, and they each have about four or five people who report to them. He’s just putting in place a global sourcing team.
HCN: Are we talking about private-label goods?
Baker: We already do some, but we’re really looking to work directly now with the sources and not a bunch of middlemen. We want to start building our relationships with those sources.
HCN: Have you made any operational changes?
Baker: We’ve always received high marks from consumers for good service. In the last couple of weeks, we’ve converted all the stores into “zoned service.” Everybody is wearing a headset in the store, so we can deploy our resources to where the customers need help, whether it’s loading in the parking lot or more information on products.
HCN: You’ve been through recessions before.
Baker: Yes, too many.
HCN: Once this one is over, I understand that Orchard has some expansion plans for other states.
Baker: Yes, but there’s so much opportunity in California. We’re not in San Diego or the south side of Los Angeles yet. There’s still some areas of the [San Francisco] Bay that we’re interested in. So that is the next 36 months. Then, after that, I want to be in markets that are strong garden markets. The Pacific Northwest comes to mind. But we don’t have any near-term plans for that.
STAFDA dealers keep the faith
Last year, the Specialty Tools & Fasteners Distributors Association (STAFDA) thrust itself into the political realm, booking and delivering the controversial and confrontational Sarah Palin as its keynote speaker for its annual convention. This year, the speaker selection is less partisan and more personal.
Captain Chesley “Sully” Sullenberger — the pilot who coolly landed his packed jumbo jet in the icy Hudson River two years ago — will talk about peak performance in difficult situations, among other topics, during the 35th Annual Convention & Trade Show Nov. 14 at the Henry B. Gonzalez Convention Center in San Antonio.
A kinder, gentler convention? Not really.
“He talks about leadership that transforms, and that’s why we thought he would be an appropriate speaker and topic for this year’s program,” said Georgia Foley, STAFDA’s executive director.
This year’s business climate resembles that of last year, and the content of the three-day STAFDA convention in San Antonio will again hit some of the major notes for success — technology, operations and strategic planning.
“The economy is still bad, but we’re getting back on track with education,” Foley told Home Channel News. “Our offering is pretty broad-based and trying to hit something for everybody. People are continuing to search for what’s new and innovative in the markets, and a lot of them have refocused on education.”
One of the new twists to the curriculum this year in San Antonio is “The Future of Green,” a presentation on green building and construction. “Even if our distributors still don’t do anything with it, they still need to know what’s going on and be aware of it, so that when they do talk to their contractor customers, they know what they’re talking about,” Foley said.
Attendance is tracking ahead of 2010’s event in Phoenix, and booth sales are up about 5% compared with last year.
As for STAFDA membership, that is holding steady. And there are signs that the challengers of recruiting and maintaining in a poor economy have passed through the low point. Hard-hit states of California, Arizona and Florida are areas where members are reinstating with STAFDA — a clear positive sign, she said.
Amid the challenges, the makeup of the typical STAFDA house is changing. It’s getting smarter, leaner and more sophisticated, she said. Years ago, many STAFDA members saw the Internet as a threat to their business.
“In many ways, it’s a totally different animal than three to five year ago,” Foley said. “STAFDA houses cut personnel, they got a lot more tech savvy.
Members are also savvy with communication tools. One example: STAFDA’s president Mike Kangas, of Alaska Industrial Hardware in Anchorage, Alaska, is replacing his staff’s laptops with iPads.
“Certainly, technology has played a big role in the way our distributors go to market,” Foley said.
Members are looking for products, for knowledge, and maybe even inspiration. And the show is prepared to deliver, Foley said. STAFDA board member Dan Steier of Duo-Fast Northeast recommended pilot Sully — key figure of “The Miracle on the Hudson” — and the idea stuck.
“We have been heavy with the political and economics the last couple of years, but we haven’t had somebody motivating and uplifting since Chris Gardner in 2007 in Nashville,” Foley said.
An uplifting message might be just what the doctor ordered for the “cautiously optimistic” distributors.
“They’ve done their slashing and burning of inventory and personnel to get themselves to be lean and mean machines,” Foley said. “But STAFDA guys are entrepreneurs. That’s something that’s just instilled in them, and they’ll continue to fight forward. STAFDA guys are positive about the future, and they’re hoping that the light at the end of tunnel is coming sooner rather than later.”