J.C. Licht and the color of opportunity
A full-blown True Value store bolsters a Chicagoland paint leader.
When the neighborhood changes, a growth-oriented dealer must change with it. That maxim has played out in dramatic fashion in Chicago’s West Loop.
That’s where a once industrial neighborhood has transformed — some would say overnight — into a livable, walkable neighborhood for young and old urbanites. That’s also where Paint retailer J.C. Licht, one of the nation’s largest Benjamin Moore dealers, has been selling to mostly industrial customers for years. Today, the West Loop location is bolstered with the addition of a True Value hardware store.
Elliot Greenberg, the president of J.C. Licht and former VP of sales and operations at Connecticut-based pro dealer Rings End, shared his thoughts with HBSDealer on how his one-of-a-kind paint-and-hardware combo store in the West Loop emerged to serve a neighborhood.
“I saw an opportunity because there was not a competitive hardware store in the marketplace. New high rises were going up all around the store, and I had a parking lot with 24 spaces.
“When two other tenants in the building were leaving, I saw the opportunity for this extra 21,000 sq. ft. We didn’t just leave the paint store and add to it. We broke it all down and built a dream store. It was a big investment. My landlord helped me. True Value helped me. My bank helped me.”
The store is showing a $2 million increase in sales in its first year.
“We already had a $4 million base paint store, and when you have that, you can go ahead and build a hardware store with a lot less pressure to justify the opening [costs].”
The store operates with a commercial oriented paint department on one side, and the consumer-focused hardware store on the other. The average paint transaction ticket is $110, while the average hardware store ticket is between $16 and $18. And the synergies are dramatic, he said.
“We sell a ton more sundries, and our store traffic is five-to-six times what it used to be. The extra traffic that a hardware store brings us — window treatment sales, wallpaper sales — are sales that we weren’t getting.”
Even with the success in the West Loop, Greenberg says two big factors prevent similar expansions at other J.C. Licht locations in Chicagoland. One is the footprint of the existing store base — a 3,000 sq. ft. to 5,000 sq. ft. area generally precludes a bolt-on of an additional consumer-oriented hardware business. Also, Menards, Depot and Lowe’s are entrenched in the suburbs.
“Because this the West Loop and people don’t drive a lot, people can walk to the store, it’s a big selling feature for the store. It’s a unique market and a unique part of the city.”
In building the combination store, Greenberg was informed by his experiences at Ring’s End.
“When I came to Ring’s End in 1994, they were a very successful lumberyard chain with five locations. We built the paint business within the lumberyard, and it has grown to way over $40 million in paint business today. It was the idea of building a specialty paint store in a lumberyard where we have paint experts. It’s kind of the opposite here, we have a great paint base and we built a great hardware store within the confines of a great paint store. That’s what we have here.”
Another feature of the business — and one of its secrets to success — is its high-wage structure. “I hear that you have to pay people $12 per hour,” he said. “Well, you get what you pay for. So, it’s an expensive model for us, but it’s a difference maker, and that’s what I learned at Ring’s End. We pay for quality help, we give them benefits, they make a great living, and that’s the difference.”
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