Throwback Thursday: Erb Lumber’s big comeback
Back in the early 1980s, Erb Lumber president Fred Erb was guiding his Birmingham, Michigan-based chain of 29 stores through one of the home center industry’s most volatile periods.
As reported in the July 16, 1984 issue of National Home Center News, the forerunner of HBSDealer, Erb Lumber’s new 140,000 sq. ft. distribution center was just one of the projects on the company’s plate. Erb Lumber was also moving to unify its merchandising approach – a task made difficult by the wide variety of footprints in the chain, which had grown largely through acquisitions.
What kind of merchandising did he have in mind?
“I’m talking about the kind where you walk into the store and the presentation tells you to buy,” said Erb.
A slowdown in housing starts in 1980 and 1981 hurt Erb Lumber, which saw a 75% drop in net income over that period. But 1983 came witha 154% rebound.
Erb explained in 1984 that the company needed to expand its sales with consumers.
A prototype in Detroit revealed some of the ideas that would play a role: expanded kitchen cabinet displays, bathroom vanity and paint departments visible from the front door, a trebling of the number of endcaps storewide, the covering of the inside walls of the store with cedar pine boards, and longer evening operating hours.
Erb’s strategy and execution paid off in growth – the company had 45 stores in 1993. That’s the year that the family sold the business to Carolina Holdings, which later became Stock Building Supply, and even later became BMC Stock Holdings.
Erb was a remarkable figure in the home improvement industry and a respected philanthropist in Detroit even after his business years. He died in 2013 at the age of 90.
HBSDealer’s Throwback Thursday is sponsored by Schaffer Associates, a national management consulting firm specializing in executive search and organizational strategies for the hardware, home improvement, building materials, and consumer products industries. As the premier management consulting firm serving the industry, we help build organizations and leadership teams that foster corporate growth and success well into the future. Contact us at SchafferAssociates.com.
Throwback Thursday: When every day was the Super Bowl
Today, Drum is 97 years old and enjoying life in Arkansas.
The March 22, 1976 issue of National Home Center News, the forerunner of HBSDealer, reported on a presentation from John Drum, the Wickes Corporation president, who described merchandising and sales promotion as the lifeblood of the retail business.
“Merchandising and promotion is the whole ball game,” he said, “You’re not in business without it.” He added: “Promotion is where you can let it all hang out. Every single day is Super Bowl day for the merchant.”
Now 97 years old, Drum lives a retired yet relatively active life in Arkansas. He says he keeps an eye on the growth of the big guys in the building supply industry, but he’s more interested these days in the local performing arts scene. Asked about Wickes Corporation’s strengths during the 1970s, Drum said: “I think we were known for two things. We were the largest lumber and building material supply people at the time, and we were very active in Europe. And another important part of the company was edible beans. That was the era of diversification, and we also had a machine tool business and several other businesses.”
(Wickes sold its agricultural business to Pillsbury Co. around 1982.)
Back in 1976 in front of a crowd of 800 or so retailers and manufacturers in attendance at the 1976 Home Center Show in Chicago, Drum shared the Wickes seven-point merchandise plan. Here’s a recap:
1) Don’t delegate everything to the merchant. “Executives must approve all lines. In this way, top management stays in close contact with all items in the store inventory,” he said.
2) The merchandising department should be tailored to satisfy the mass market of the individual store area.
3) Exploit maximum sales of stocked merchandise, as opposed to customized service.
4) Helping customers determine what is right for them is a prime policy at Wickes.
5) Prices should be at or below competitive levels.
6) Shelves should be In-stock. “Nothing turns a customer off faster than an out-of-business look,” he said.
7) Promotion works best when combined with precision planning.
He added, when it comes to sales, “Let the merchandise work for you, too.”
From his Arkansas home, Drum told HBSDealer that he doesn’t remember many details from the 1976 Home Center Show. “That was a long time ago,” he said. But when presented with the quotes above, he added: “that sounds like something I might have said.”
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Do you have memories of working with John Drum, or the glory days of Wickes Corporation? Share them with us at [email protected].
Throwback Thursday: The importance of being Ernst
The March 7, 1988 issue of National Home Center News, the forerunner of HBSDealer examined the revamped design of Ernst Home Centers. The Ernst Home & Nursery in Redmond, Wash., contains, according to the article, courtesy desks set up at the front of the store and revamped merchandise presentations, such as a new flooring department.
The article also describes executive changes at the company, which at the time was engaged in a turnaround under CEO Hal Smith, who came to the company from Builders Emporium. New executives included Tom Stanton, senior VP of operations (from Payless Cashways); Tom Vertetis, senior VP merchandising (from Handyman); and Susan McNab, senior VP human resources (from Lanoga).
In a photograph of the new prototype, a sign near the store’s courtesy desk reads: “Lowest Prices Everyday,” and “It’s Ernst Policy.”
At the time of the article, Ernst operated 70 stores and had annual sales of about $300 million. Ernst had spun off from the the old Pay ‘n Save organization. Ernst filed for Chapter 11 bankruptcy protection in 1996, and announced going out of business sales shortly thereafter.