A hardware store grows — and endures — in Brooklyn
There are few communities in America that have undergone a more visible, oft-scrutinized, and drastic demographic upheaval than Brooklyn’s Williamsburg neighborhood. But one young retailer has successfully navigated the complex task of maintaining his father’s legacy and positioning his store for future growth in this environment.
It’s perhaps for this reason he’s one of this year’s Young Retailer of the Year honorees. But Joseph Franquinha, owner of Brooklyn’s Crest True Value Hardware and Urban Garden Center, founded in 1962, is also in possession of a “creative fire” (and a visionary sense for what makes that whole “Urban Garden Center” part successful).
One of Franquinha’s most notable contributions to the store since taking over from his father and his uncle has been the addition of what is now a 5,000-sq.-ft. garden center with a year-round greenhouse.
Williamsburg had already changed a lot by the time the recession hit, but it was at that point that the usual stable of plumber and electrician customers stopped coming in. Instead, the store began to see an influx of DIYers.
“The writing was on the wall to start catering more to the DIY set, and also use this opportunity to maybe differentiate from the normal stock that a hardware store usually carries,” he said.
That’s where the garden came into play. In 2007, he was trying to convince his father that it was a good idea, but he wasn’t sold on the concept. When his father took his first long vacation in 25 years, he began to build the garden center anyway — putting up beams, a pergola and an overhang.
“I thought I was going to get a pat on the back or a pink slip, and I got neither,” he said. “He just said, ‘You better make this work.’”
Now, Franquinha said, the garden comprises roughly one-third of the store’s revenue. When they renovated the store recently, they focused primarily on plants and paint, two categories Franquinha describes as “Amazon-proof.”
“You have to touch them. You have to talk to someone about how much light you have to offer,” he said. “Paint is very much the same way.”
Of course, this breath of new life isn’t only happening at the local level. The leadership of John Hartmann has inspired confidence in Franquinha, who describes the new CEO’s enthusiasm as having a “positive domino effect.”
More than anything, Franquinha feels the imperative of “messing with the formula” of retail at a time when the average hardware store owner is 68 years old (and might feel a lesser sense of urgency to be creative).
It’s experimentation that has allowed Crest True Value to remain relevant, and part of the reason Franquinha, who has an acting background (and was once a professional mascot at Madison Square Garden), was able to satisfy his creative urges while running the family business.
The store was actually already doubling up as a neighborhood art space since his father’s day. In the 90s, a local artist named Gene Pool asked his father for window space to showcase his work, and before they knew it, local artists were participating in the Crest Hardware Art Show.
“My dad always joked that the only way you could tell the difference between hardware and art was the price tag,” he said. “And this was his way of establishing a relationship with the new wave of residents. You had the contractor and electrician right beside the art history major appreciating art in Aisle 2, and Crest became common ground for that.”
But there’s also a strong sense of what it means to not throw out the baby with the bathwater.
“There’s a lot to be said for not bending too much in [the new] direction,” he said. “I could increase margins and only carry certain stuff, but you’d alienate a lot of the people who got you to this point.”
Retail sales flat for LBM dealers in May
Advance estimates for total U.S. retail and food services sales for May 2017 dipped 0.3% since April.
The amount came in at $473.8 billion, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes. This is still 3.8% above May 2016, however.
Retail trade sales were down 0.3% from April 2017, and up 4.0% from last year.
Building material and garden equipment and supplies dealers experienced no movement in retail sales compared to April, but they netted the largest year-over-year increase, up 10.8%.
Nonstore retailers were close behind, up 10.2% from last year. Nonstore retailers also made the biggest monthly strides, up 0.8% since April.
Electronics & appliances stores fell behind in May, down 2.8% for the month and 1.8% for the year.
However, sporting goods, hobby, book & music stores experienced the worst year-over-year slide, down 4.7% since May 2016.
Appliances and the independent
Hartington, Neb., lies 60 miles west of Sioux City, Iowa, and 20 miles south of the South Dakota state line. This town of 1,600 people in the northeast corner of Nebraska has been the home of Kruse True Value since April 1990. Gary and Lisa Kruse purchased a Hardware Hank location and changed their affiliation to True Value to establish their own image and reputation.
Prior to purchasing his own store, Gary worked 12 years for his uncle selling and servicing appliances. That experience convinced Gary and Lisa to broaden the traditional hardware offering from the previous owner, adding televisions and major appliances, among other new lines.
They believed by diversifying their offering, their store would become a destination for much more than traditional hardware items. Gary initially took on the Maytag brand, but has since added Whirlpool, Amana and KitchenAid to his offering. He can now cover a wide variety of price points to meet the needs of his customers.
In 2001, Gary and Lisa determined that they had outgrown their current location and built a larger store that would better suit the expanding business. They considered moving from their downtown setting to a location on the edge of town that was near a highway. In the end, it was determined they would lose much of the “walk-in” traffic they currently enjoyed, so they stayed in downtown Hartington.
The new, larger building allowed Gary to move the appliance showroom up from the basement to the main floor. In addition to the benefit of an expanded display space, this new arrangement improved the visibility of the appliance offering. Customers who enter the store become aware of the appliance category — a major improvement from the out-of-sight, out-of-mind merchandising in the previous store. Accessibility also improved, as the stairs that led to the basement showroom made it difficult for some elderly customers to navigate.
From his previous experience in appliances, Gary understood the value of providing after-sale service to his customers. His new location has a service bay and his team is able to provide in- and out-of-warranty service for the items he sells. Customers can buy with confidence, knowing Gary’s team will be able to keep their appliances in good working order.
With the growing success of their appliance business, they decided to remodel the store in 2015 and move the appliance display from the back to the front, ensuring anyone who walked in would know immediately that they were in the appliance business. At the same time, analysis of the mix of his sales showed a solid growth of higher featured items being sold from both the Whirlpool and Maytag brands. Gary’s SalesLink representative suggested he consider adding the KitchenAid brand of appliances to further diversify his assortment and offer more premium featured items.
Kruse True Value now displays 60 appliances, and it has a back stock inventory of 20-25 units. Since 85% of appliances purchases are made when the appliance fails, the customer generally wants to get the replacement immediately, rather than wait for a new order. Gary will even sell the display model off of the floor, in order to fill the customer’s need right away.
Kruse True Value is just one example of an independent hardware store that has enjoyed the benefits of appliance retailing. There are many others. Some industry observers feel the trend is gaining momentum for several reasons. First, major brands have designed programs specifically for independents. There’s an opportunity for the independent dealer to leverage its local reputation as a trusted service provider. And, more recently, the closing of stores at appliance-focused national retailers opens the door for other retailers to fill the void.
The Kruses point to the following elements of their success in their market:
- Offer a diverse assortment of product features and prices to cater to all types of customers.
- Help the customer find what they want, versus steering them to a specific item.
- Service the items they sell; give the customer confidence that they will be able to keep the item operating long after the purchase.
- Locally owned, locally operated. You are buying from a trusted friend.
For more information, visit hardwareapplianceprogram.com.