Tile Shop hits the marble floor running
Is Tile Shop the fastest-growing specialty building product retailer in the country? Or does it just seem like it?
In the span of a month, Tile Shop locations cropped up in Tulsa, Danbury, San Antonio and Oklahoma City. And since it went public in August 2012, the Minneapolis-based retailer has been expanding aggressively. Twenty stores opened in 2013, debuting in new markets amid a beefed-up corporate infrastructure.
CEO Robert Rucker says earnings will come for the Tile Shop, which swung to a slight profit in the fourth quarter after two years of much bigger losses.
“While we made progress in strengthening The Tile Shop brand and infrastructure this past year, we recognize that we have more work in 2014 and beyond,” said Rucker in a prepared statement. “We continue to firmly believe that as our new stores mature, the company will return to the historical levels of profitability.”
One reason for that optimism, said Tile Shop COO Chris Homeister, is changing consumer tastes. “We feel that the timing within the industry is absolutely right,” he said. “There continues to be a growing acceptance and desire to have hard surface flooring and tile. We’ve been warmly received everywhere, even though we don’t advertise very much. We rely upon word of mouth and social media.”
Joan Storms, senior VP equity research at Wedbush Morgan Securities, believes it’s the fastest-growing retailer of its kind, just ahead of Lumber Liquidators. Publicly traded Tile Shop is aided by a “strong and best-in-industry store model supported by strong sourcing margins, since they source direct,” she said in an email.
The company is planning another 20 new stores in fiscal 2014. And Homeister said they’ll be staffed by designers who know the product: “We feel we can inspire people when we bring them into the store.”
Taking the show online
Darrell Wabschall is a man on a mission.
The founder and CEO of the Vendor Center, the business-to-business, password-protected Web service, believes that there is a better way to efficiently connect retailer buyers with vendors and their products.
Brewing for the past six years, the idea for Vendor Center started out as an online trade show concept and soon morphed into something more permanent. “This is information that is valuable to retailers every day, not just once or twice a year,” he said. “It’s a 21st century solution that surprisingly hasn’t been adopted yet.”
Wabschall, a former home product marketer on the trade show circuit, said the germ of his idea was born at a hardware market, when a retail customer explained that she was going to go sightseeing instead of visiting Wabschall’s booth.
“That’s when it hit me,” he said. “I just busted a gut to get a booth, and a potential customer was going sightseeing. It’s a 1960s business model, masquerading as an up-to-date model,” he said.
There are those who disagree. And they’re quick to point out that the face-to-face interaction and walk-up-and-touch-it features of the current market system will never lose their appeal.
Wabschall believes the Vendor Center can find a role as a supplement to the existing go-to-market system, providing 24/7 information and interaction.
The Vendor Center is a system open to retailers for free. Revenue is generated from fees from participating vendors. “I like to use the analogy that it’s Wikipedia meets You-Tube meets Amazon.com,” Wabschall said. “It’s everything a vendor could possibly want a retailer to know about their product.”
Weiman cleans up nicely
A proliferation of specialty surfaces in the house — from stainless steel appliances to granite countertops to any number of glowing rectangles — means one thing: more specialty cleaners.
That’s the attitude at Gurnee, Ill.-based Weiman Products, which last month acquired several brands formerly in The Homax Group.
Mass merchants dominate cleaning product sales, but home improvement stores have an opportunity in the cleaning aisle, especially as the products continue to specialize, according to Weiman CEO Carl DeMasi.
“The overall market continues to grow, particularly the specialty cleaning sector,” he said. “Consumers are looking for advice, and the hardware store can provide that.”
Under the deal, Goo Gone, Magic, Stone Care International, OOPS! Paint Remover and Gonzo join the Weiman family of products, including the market-leading Weiman Cook Top Cleaner.
The company declined to reveal the terms of the deal. But DeMasi was open about the selling proposition of a specialty cleaning product. “They have to work,” he said. “Quality is No. 1. You need innovation. Not just another ‘me, too.’ ”