HARDWARE STORES

Hardware All Stars: Illinois & South Dakota

BY Steph Koyfman

Each year, HBSDealer editors face the tough task of sifting through dozens of nominations for the annual Hardware All Stars feature.

It's not exactly tough to find retailers that provide knowledgeable service, or stores that are important to their communities. When it comes to All-Star status, however, it's usually a matter of "a little extra" — be it exceptional service, an unusual market niche, or perhaps just a really great story.

This year's Hardware All Star selection (sponsored by Epicor) is a representation of hardware stores that can play the retailing game, and do so with a heavy dose of personality.

The April issue of Hardware + Building Supply Dealer magazine contains the full list of 2015 honorees. Here are highlights from the class of 2015, continuing today with Illinois and South Dakota.

Franklin Park, Illinois: Olson's Ace Hardware

Olson's always seemed to be ahead of the pack. When it was founded in 1948, it was one of the first retail stores on the street.

During its subsequent expansions in 1960 and 1976, it was one of the largest Ace stores of its time.

Today, it continues pushing the envelope with community involvement, a willingness to pilot new Ace programs, generous staff bonuses and inventive promotional events (Carhartt Fashion Show, anyone?).

Belle Fourche, South Dakota: Dakota Do it Best Lumber

The Bowman family business has been the community supplier of products for the maintenance and upkeep of Belle Fourche homes since 1979.

Last year, the second- and third-generation home center opened a new location — Do it Best Hardware in nearby Sturgis.

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HD gets a new director

BY HBSDealer Staff

The Home Depot has named Gerard Arpey to its board of directors, raising the member count to 11.

"I'm pleased to welcome Gerard to our board, where his extensive experience in organizational management, strategy and finance will serve our company and shareholders well," said Craig Menear , chairman, CEO and president.

Arpey was formerly the CEO and chairman of AMR Corporation and American Airlines, where he worked for nearly 30 years. His time there also included roles as president and COO, senior VP finance and planning, and CFO.

He is currently a partner in Emerald Creek Group, LLC, a private equity firm based in Southern California, which he joined in 2012 following his retirement from AMR.

Arpey will serve on the company's Finance Committee and its Nominating and Corporate Governance Committee.

He also currently serves on the board of directors of S.C. Johnson & Son, Inc., and he's a trustee of the American Beacon Funds and a member of The Business Council.

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Sales in the city

BY Ken Clark

There’s a saying in New York City: “If you can make it here, you’ll make it anywhere.”

Whoever coined that phrase might have been a home improvement retailer — high rents, small stores and a notoriously demanding customer base combine to magnify the importance of every wholesale purchase and merchandising decision. And then there’s the parking, or lack thereof. Big city, urban retailing is not for the faint of heart.

Against those difficulties comes the promise of foot traffic, population density and, especially in recent times, a flurry of big building projects with swarms of contractors.

Into this beehive, Memphis, Tennessee-based hardware distributor Orgill Inc. has staked a steady and growing outpost. From the Bronx to East Harlem to Greenwich Village and beyond, the city is a bastion of true independents. And these are not your typical dealers.

For instance, during an interview with Garber Hardware co-owner Nathaniel Schoen in the fashionable Greenwich Village neighborhood of Manhattan, he pointed to his cousin and partner Scott Schoen, who was lugging bags of ready-mix concrete from the sidewalk to the store’s loading dock. “I would imagine that at most stores, you don’t walk in and see the owner unloading the truck,” Schoen said.

But the main operational challenge for the big city independent dealer is dealing with space constraints. Garber Hardware, with about 5,000 sq. ft., is actually one of the larger Manhattan independents. But still, maximizing every inch is part of the store’s DNA. Garber’s ability to take advantage of generous dating terms, for instance, is affected by limited storage.

“It can be tricky,” Schoen said. “You get to know your clientele at certain times of the year and what they need.”

The owners’ approach combines several principles: Be willing to try new merchandise (especially impulse items), know the customer, and keep building the brand name that’s been in the neighborhood and in the family since 1885. And the store’s multiple citations in various “best of” magazine articles attest to its success.

The owners appreciate Orgill’s hands-off approach to the brand. “I like it that they don’t have any opinion about my branding,” Schoen said. “They care about one thing — they want me to sell. If I’m selling, then they’re happy, and I’m obviously happy.”

And at the Orgill market, Schoen makes time to find that unusual item or two.

“We’ve gotten better at doing our standard stock purchases ahead of the markets, so when we go, I can spend more time just exploring the randomness,” he said. “That’s why people want to come to a hardware store. It’s nice to find something unexpected when you’re there.”

Across town at 19th Street and Third Avenue, Warshaw Hardware measures in at only 1,400 sq. ft. Space is so tight, the V-belts are stored in the bathroom.

“We have maximized it,” said co-owner Ed Warshaw. “We have learned to stick things wherever we can.”

A recent visit on a weekday afternoon found the place bustling, with Ed and his brother Carl grinding keys and handling questions, while Carl’s daughter Megan worked the register between a hole in the merchandise.

“At trade shows, when we talk to the vendors there, or talk to the other retailers about our size, they’re totally shocked by it,” Carl said.

A tiny back-room was a treasure trove of old pay checks, old distributor manuals and even pictures — one of Carl standing outside the store close to a young David Letterman. (“He wouldn’t let me put my arm around him,” Carl remembers.) The store interior can be described as a combination of crowded and old-school.

“We’re just like New York City. We have to go vertical,” Ed said. “We can’t buy things in case quantities as often as we’d like to, because there is only so much space. So we buy twos and threes.“

Big changes are rare, but the store is responsive to changing demographics — the rise of contractors and the decline of the middle-class renter. “When an item keeps popping up on the radar, we’ll get it,” Ed said. “We sell things my father would never have sold — safety harnesses and sheetrock.”

According to the brothers, city regulations have driven demand for harnesses and vests, which are a relatively new item. Diamond saw bits are in demand, as more designers are using porcelain in the homes of affluent customers.

The competitive environment shifted considerably with the opening of a Home Depot on 23rd Street. Sales dipped as a result, but the core Warshaw customer remained loyal. “My customers don’t want to get lost over there,” Ed said. “I have customers that for 30 years have been coming directly to me, and I know what they need.”

Orgill deliveries come twice a week to Warshaw Hardware from the West Virginia distribution center, and the brothers consider the distributor a valuable partner. “We’re one of their first stores in Manhattan,” Ed said. “They’re very aggressive in their pricing, and their service is fantastic.”

Orgill has noticed the spirit of the independent in the big city. “They are real examples of entrepreneurs using creativity and overcoming a lot of challenges — and doing well,” said Orgill CEO Ron Beal.

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