Hardware Connection January/February 2014

By Tom Chasteen

Will You be Proactive or Reactive?

2013 is behind us and it’s time to begin thinking about what we will do in 2014. Most hardware retailers (myself included) are so focused on maintaining a successful business that they tend to lose sight of the big picture.

I’m reminded of the little boy who held an agitated dog by the tail and was asked why he didn’t just let go. He replied, “Because the other end has teeth.” Sometimes I know how that little boy feels when I’m trying to run a profitable hardware store and managing the daily crises that need to be addressed.

As the saying goes, when we stand too close to the trees it is literally impossible to see the forest. On any given day a small business owner may have to be the CEO, COO, CFO, personnel manager, loan officer, mentor, compliance officer, IT manager, life coach, inventory analyst, insurance specialist, priest hearing confession, motivator, enforcer, security officer, HR manager, board member, spouse, parent, marketing specialist, store design specialist, sales clerk and the list goes on and on.

The good news is we typically don’t face all of those responsibilities on the same day; the bad news is you

never know what hats you will need to wear when you arrive at the store each day.

As small business owners, when and how do we find time to step back—way back—and really observe the forest? How can we let go of a mad dog’s tail and not get bit?

Fifteen years ago my wife, Dale, and I started doing something that we’ve found very productive, not just in our business but also in our personal lives. We were at The Hardware Conference in Marco Island and we started taking 2-3 mile walks very early in the morning, just as the sun was beginning to signal the start of a new day and long before we were confronted with any issues for that day.

What was intended as a chance to spend quality time together gave us an opportunity to not just take in the beauty of a new day as we walked along the tranquil waters of the Gulf of Mexico, but it also gave us quality time to discuss what we really wanted out of life, what our personal objectives were and how we could reach our ultimate goals. We were able to step back from the trees and really see the forest. the way i see it

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the way i see it

We were able to discuss our financial goals, issues within our hardware store and retirement plans, but most importantly how we could significantly improve our quality of life and maintain that quality of life when we retired.

What came out of those long morning walks is we developed a strong financial plan. We bought a boat to cruise the Bahamas while we were both in good health, but we realized we could not just take off from our responsibilities at the hardware store and our other businesses for weeks at a time.

However, we did determine that we could take long weekends (3–5 days) once a month. So we bought a small plane and started taking flying lessons, so we would not spend a whole day getting to the boat and another whole day getting home— two days of travel and one or two days on the boat just weren’t going to work for us.

We also ramped up our ability to remotely access the hardware store’s computer system, allowing us to work remotely from home or the boat for a couple of days. Next we put in a comprehensive camera and alarm system so we could monitor the store without actually being there and would be notified by text the moment the store opened and closed in addition to any unauthorized entry. We are continually

migrating to a “paperless” business model that started with electronic check writing and banking capabilities. This has not been an easy process as we are not “techies.”

Without those long walks on the beach where we could really step back and evaluate what we were doing, we might not be where we are now. We still find ourselves holding onto the dog’s tail occasionally, but we have learned how to make friends with the dogs and, if we can’t, we have learned how to keep the dogs out of our yard.

This is a great time of the year to learn how to step back from the trees and evaluate the forest. We all know people who have spent their whole lives climbing what they thought was the ladder to success, only to find when they got to the top, the ladder was leaning against the wrong building.

Take proactive steps to prevent that from happening to you while seeking to find the right balance to your business and personal lives. And if your walks help you identify the perfect beach, you might want to keep that secret to yourself.

Share your thoughts with me, from one retailer to another, at tom@thehardwareconnection.com . n

Tom Chasteen, the publisher/principal of The Hardware Connection, operates Tavernier Hardware in the Florida Keys.

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Joe Long and his daughter Megan Menzer are hardware retail pioneers. They’ve watched customer needs change for four generations. So when Megan saw an opportunity to stay ahead of the next market trend, Joe handed her the reins. Megan’s drive and new ideas launched a successful new DTV store. They stocked and sold over their projected demand. And it’s best-in-class merchandising attracted a younger demographic who shopped longer and had a good time doing it. To find out more about Joe and Megan’s competitive edge, visit newtonstruevalue.com/AboutUs.

Whether your plan includes a new store or remodel, take a step toward retail success, call 888.291.7229 or visit truevaluecompany.com.

HARDWARE STORIES Amazing but TRUE

We had a young lady fill out an application one time. She put the name of her boyfriend in the box as to who to contact in an emergency. For relationship, she first put “No,” then she changed it to “Yes.”

Joe Proctor Proctor’s Ace Hardware Jacksonville, Fla.

One time a guy put how much he could bench press, in addition to fluently speaking and reading English.

Matt Fabian Turner, Pierce & Fultz Ace Hardware |

Navasota, Texas

GOOD HELP IS HARD TO FIND

Afew years ago we had a factory union get locked out. I got applications filled out on napkins. I got them saying, “You will pay me $20 an hour and you will pay for my 20-mile commute.” I got them saying, “I’ll let you hire me, if you let me organize a union.”

Brandon Buckalew

Hardware Hank | East Grand Forks Minn.

We could all probably write an Edward Gorey Alphabet: A is for Adam, who shorted the till. B is for Bert, who mooned over girls. C is for Chris, who smoked weed in the john. D is for Dave, who fell down the stairs. E is for Ed, who stole the hand tools. F is for Frank, who everyone hated. G is for George, who went to rehab. H is for Hank, who landed in jail. I is for Ivan, who was just kind of creepy.

Lex Stevens Back Bay Hardware | Boston, Mass.

– Byron Bunnell, Rainbow Ace Hardware, Rice Lake, Wisconsin

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

The best part of starting a new year in the hardware industry is the opportunity to see all of the new products manufacturers have developed. As retailers we’ve seen just about everything from “Pet Rocks” (obviously an impulse item) and toilet seats that go down automatically to electronic measuring devices and lasers.

PRODUCT #1:

XLTTM SERIES PLIERS CHANNELLOCK®

CHANNELLOCK® is celebrating its 127th year of manufacturing highquality pliers and hand tools. After making pliers for all of these years you’re probably wondering how they can dramatically improve the functionality of a pair of needle-nose pliers, lineman’s pliers or diagonal cutting pliers. Well, they have done it. Anyone who has ever tried to cut large-gauge electrical wire knows how tough it can be, sometimes requiring two hands to make the cut. CHANNELLOCK® came up with the ingenious idea of moving the rivet (pivot pin) of the plier joint closer to the cutting jaws, which will increase

By Tom Chasteen

In the case of this review, we’re talking about the enhancements made in an established product line that will dramatically enhance the functionality of the product. I know we’ve all heard that line before over the years, but in this case it’s a simple adjustment that makes a significant difference.

From Tom’s Shop

HARDWARE PRODUCTS REVIEW

the leverage and significantly reduces the amount of pressure pounds to make the cut. In one test by IMR Test Labs it required 42 percent less force to make the cut with a similar size product from a competitor without the Xtreme Leverage Technology (XLT™). That truly is a significant difference.

During our product review our volunteer testers put the CHANNELLOCK® XLT series pliers (with the rivet moved closer to the cutting jaws) to the test and immediately noticed a significant difference over other cutting pliers of similar size and price range. We tested more than 25 different sizes and styles of CHANNELLOCK® XLT High Leverage pliers. We tested the traditional blue cushion-grip cutting pliers (the standard style CHANNELLOCK® pliers) as well as the Code Blue® cutting pliers with the oversize blue and red handles with the XLT High Leverage feature and both worked equally well. Our testers were able to cut wire sizes that normally would require two hands or the added help of using your thigh as added leverage. Every one of our volunteer testers agreed that

were a considerable improvement over defective rate is less than one quarter

agree and, when they do, you can bet the product is a good one.

CHANNELLOCK® has a well-established reputation of making quality products. Their pliers have the “knife and anvil” cutting edges that help maintain alignment of the cutting jaws, which result in a consistent clean cut and the cutting edges are laser heat treated for added durability.

In the 35 years that we’ve been selling CHANNELLOCK® lineman’s pliers, I’ve never seen a pair worn out to the point they could not make the cut. Mark Yoder from Channellock told me that most manufacturers experience a one and a half to two percent return

rate (defectives), but CHANNELLOCK’s ers are made right here in the USA. In a time when we are trying to keep people employed in this country it’s always a great feeling to buy and sell quality products made in the USA.

While you are attending one of your wholesaler shows next month (all of the major hardware wholesalers are stocking the CHANNELLOCK ® XLT series pliers) stop by the CHANNELLOCK booth and see fi rsthand what a difference the CHANNELLOCK ® XLT series of pliers makes. If you’re like me you won’t really believe it until you actually try it. Your customers will be glad you did.

Howʼs

Business?

MIDWEST

How were sales for 2013 and for winter so far?

Very good. We’re up 5 percent over the previous year, and 2012 was outstanding. However, at the end of the year, we began to slip in December. December sales last year included a big job, though, so the numbers don’t really compare. We’re working really hard, doing a lot of social media to keep things positive.

New initiatives planned for 2014?

We’re trying to move into social media, and we’re going to go online with an e-commerce website. Aside from that, we’ll be continuing our special events. We have a big customer

appreciation day. We like to make it more than just a free hot dog, but a good sales event. That’s what our customers are really looking for. They look at our customer appreciation day as an opportunity to get big savings. We work with vendors and make them give us deals, so we’re not taking a whole big bite on the margin. We also host a trade show in March where vendors set up booths and are writing orders on very good deals, then people pick the products up at the store later.

What financial metrics do you track closely?

We’re really working on our margins. Our customers are very price sensitive, so we have to be sure prices are low enough that they’ll

continue shopping. But we want to make sure we’re not giving away the products. So we price shop our competition to keep better margins. Most successful niches?

Feed is the big thing, but we’re also trying to get our customers to see us as the place to shop. We’re expanding everything associated with feed, such as farm supplies, buckets, animal supplies. People come here from miles away for the feed. Now we need to make the add-on sales.

Julia Carle

Spencer Feed & Supply | Spencer, Ohio

New initiatives planned for 2014?

NORTHEAST

How were sales for 2013 and for winter so far?

We have a hardware reset coming up in April. And I have about 80 to 90 feet of plumbing that we may reset this year, too. If not, then in 2015. Also continuing training for the staff.

What financial metrics do you track closely?

and year. We’ve had some conand best around. We’re working very

Very good. We’re up about 8 percent over last year. We’ve had some construction and my staff is the best around. We’re working very hard to freshen and update the mix. In the past year, we’ve reset electrical, light bulbs, power tools, cleaning supplies and chemical areas. This winter has been tough in the Northeast because there’s been a lot of ice and freezing rain. Salt sales have carried us through the early part of this year.

Cash flow. That’s the one key, especially while managing a debt load. We’ve only owned the business for 11 years and we still have debt. So cash flow and being able to meet payroll and rent is what I watch the closest. It’s better than it was a year ago, but I’d still like to see that improve.

Most successful niches?

We recycle fluorescent and compact light bulbs. The goodwill that’s created in the community has made that a successful niche. We do it for no charge for the customer, and I hear about it constantly. People connect us to light bulbs. Other good

niches for us include gas grills, housewares and portable appliances. The housewares and portable appliances really generate a lot of sales for us in November.

Bob Nelson

Nelson Ace Hardware Barre, Vt.

SOUTH

How were sales for 2013 and for winter so far?

About the same as the last couple of years, with no increase or decrease. One of the things that’s really affected sales here is the terrible, cold weather. It’s been zero or below for a while. That’s really unusual for us.

New initiatives planned for 2014?

Howʼs Business?

I might get to retire. I’ve been at this for 35 years. Nothing new really. What financial metrics do you track closely?

I pay more attention to accounts receivable. Cash flow has been better lately, too. People are spending money and paying with cash. As far as accounts receivable and cash flow, 2013 was one of our better years. Most successful niches?

We sell a lot of treated lumber and metal roofing. Also, we sell a lot of screws and nails. We’ll promote sales with the advertising through HouseHasson. But we’re a rural retailer, out here by ourselves, so most people know us.

Greg Wheeler

Western Building Supply | Ewing, Va.

SOUTHWEST

How were sales for 2013 and for winter so far?

In 2013, we picked back up some after taking a dip in 2012. The winter sales have been okay and the weather has cleaned us out of some products, such as PVC pipe and fittings. The harsher weather in north Texas has cleaned out the warehouse so

we can’t get replenished.

New initiatives planned for 2014?

I’m going to the True Value show at the end of February, and we’re looking to buy some new assortments. We’re constantly resetting planograms and bringing in new products.

What financial metrics do you track closely?

I do pay attention to margins. Most successful niches?

We do well with nuts, bolts, PVC pipes, plumbing and electrical. In season, our paint and garden centers are big, too.

Jerry Allbritton

Wallace-Thompson True Value | Rusk, Texas

WEST

How were sales for 2013 and for winter so far?

They are up from 2012. I’m still looking at the numbers, but I know that we were better than the previous year. We were having a good

winter until January. I’m not sure what happened. Maybe people overspent on Christmas. Even contractors are saying they’re putting off work and waiting.

New initiatives planned for 2014?

We started some last year that we’re looking to follow through with this year. We started a farmer’s market to go with our lawn and garden and organic offerings. We get business from both the farmers and the people coming to the farmer’s market. We’re also looking to do some Christmas and Thanksgiving sidewalk sales. What financial ratios do you track closely?

We pay the most attention to sales, because that influences orders and hours employees work. Fortunately, sales have been up.

Most successful niches?

Plumbing seems to be our biggest. It’s funny because True Value is known for lawn and garden, but plumbing is really big for us. I think it’s related to how homeowners are doing their own repairs. I don’t see as many contractors coming in for home repair type jobs as I did five years ago.

Cheryl Olson Sutherlin True Value | Sutherlin, Ore.

By Doug Donaldson

Business of the Year: Trio Hardware Shares its Secrets to Success

Bruce and Francesca Carlow (front) and Todd and Ritsa Kirschner (back) are all co-owners and actively involved in the store.

With a deluge of customer votes, Trio Hardware & Paint emerged as a finalist and went on to win the Independent We Stand Small Business of the Year Award for 2013. Such strong hometown support is nothing new. During the past five decades, Trio’s customers in Plainview, N.Y., have rallied (sometimes literally) for their little store that gives back so much to the community.

Trio Hardware’s 15 employees are all adept at delivering top-notch customer service.

Dealer profile

TO WIN THE AWARD, THOUSANDS OF businesses were nominated through the website independentwestand.org. The 10 retailers that received the most online votes were deemed to be finalists, with Trio Hardware & Paint then getting selected by a panel of judges as most deserving of “The Indie” award.

Started in 2011, the award recognizes locally owned small businesses that provide outstanding customer service and make above-and-beyond contributions to their communities. The prestigious award is sponsored by the non-profit organization Independent We Stand, which supports locally owned businesses and promotes the importance and economic benefits of buying local.

“It was truly a wonderful honor to win,” says Bruce Carlow, one of the store’s co-owners. “Customers would come in the store and tell me they’d

“My father had a couple of basic rules. Treat customers the way we’d want to be treated. And never say no to a customer.”—Bruce Carlow

voted. We’re very lucky for our customers to remember and vote for us.”

long hiStory of giVing BaCk

In 1963, Bernie Carlow purchased Trio Hardware & Paint. Starting in a tiny, 1,400-square-foot store, Carlow began some business philosophies that have spanned half a century and created an intensely loyal customer base.

After teaching for three years, Bruce Carlow, Bernie’s son, began working at the store full time. In 1986, Bruce convinced his father to expand the store, so they moved into a 3,600 square-foot space. And another business philosophy that Bernie handed down: Don’t show empty space. Throughout its

Southeastern Virginia

“STIHL helped grow my customer base, my profits and my business.”

In 2008, Joe Taylor introduced STIHL equipment to his 11 hardware stores, Taylor’s Do It Centers®. And he’d do it again today. Because while many businesses were bracing for tougher times, Joe’s bold move brought in new customers and increased business. “The STIHL customer is our type of customer, because they want quality and that’s what we sell. Adding STIHL gave us a new avenue for income and it really drew customers

in,” he says. And how: overall sales were up 4.5% and STIHL sales were up 9.8% in 2013. Beyond the numbers, Joe appreciates STIHL’s commitment to local, independent businesses. He also credits STIHL iCademy® online training and everyday STIHL support as keys to success. Joe Taylor – real people, STIHL people.

history, the tiny Trio store has always been packed full.

“My father had a couple of basic rules,” Carlow recalls. “Treat customers the way we’d want to be treated. And never say no to a customer.”

That philosophy is echoed today on the shirts of the employees, which has the store logo and the phrase “If we don’t have it…you don’t need it.”

The store, which is affiliated with Do it Best, also boasts that it has access to more than 70,000 products. So whenever a customer has a special product request, the store will fill it.

Bernie retired in 1994 and Bruce took over the store. In 2012, Carlow took on a partner, Todd Kirschner, who had worked at the store for 23 years. The

Dealer profile

partners’ wives, Ritsa Kirschner and Francesca Carlow, also co-own and help manage the store.

“For us, it was a win-win,” Carlow recalls. “I’ve known Todd since he was in high school and I truly trust him. He brings fresh ideas, like using technology, adding new lines and creating some wonderful displays.”

For example, Kirschner, a former winner of the Young Retailer of the Year program, brought in items such as reciprocating saws and industrial hammer drills, which have sold well.

Community Support through the DeCaDeS

In the 1990s, the store suffered from a devastating fire, so they set up a nearby, temporary store while the space was being repaired. One customer even volunteered storage space in his factory. However, once the space was ready a national hardware chain sought to rent it. The landlord was prepared to let the national chain move in, but Trio customers staged a rally at the store.

After seeing the crowd supporting Trio, the landlord relented.

“The community has always been behind us,” Carlow says.

When Home Depot was planning on opening a nearby store, customers attended town meetings and spoke on behalf of Trio and kept the big box from moving in.

The feeling is mutual. The store has always been supportive of the community. It regularly donates supplies and money to local Scouts, temples, schools, parent-teacher organizations and Little Leagues. One small example: When the local high school needed money for a wireless network, the store chipped in $500.

“We go to markets looking for things we can donate,” Carlow says. “Recently, we bought a combination clock thermometer. We’ve also given out hand lanterns to different organizations, which used them as fundraisers. We’ve also provided bigger items, such as a snow blower to the Chamber of Commerce. We believe in supporting the community because we know the community supports us.”

Trio is also a founding member of the Plainview-Old Bethpage Chamber of Commerce and Carlow is master of ceremonies for the annual Memorial Day parade. The store has established an annual scholarship for high school seniors.

making DollarS anD SenSe

Just because Trio makes numerous donations to the community doesn’t mean it isn’t serious about business. Bruce estimates the store’s customer base is about 60 percent do-it-yourselfers, 30

industrial customers and 10 percent

contractors.

With annual gross sales of about $1.3 million, they compete with nearby bigbox stores. They have also kept up with modernizations with computers.

“As a small business, perception on price is one of the biggest hurdles to overcome. We focus on educating consumers about the economic benefits of shopping, and providing great customer service from knowing our customers to offering advice and our expertise,” says Kirschner.

“There’s the perception that big boxes like Home Depot are cheaper,” Carlow adds. “We’re very competitive on price, and our customers have learned there are differences in quality. People know they can come to us to get anything they need.”

Trio’s customer service also sets them far above big-box retailers, according to Carlow. There’s always an owner in the store for the customers. And the store takes advantage of a vigorous Do it Best customer loyalty program, too.

“That’s one of the best things we’ve ever done,” Carlow says. “That brings customers back, especially when they receive the $10 coupon in the mail.”

The store’s assortment is planned so that it carries different brands than local big boxes, so price comparisons aren’t seen as head to head.

Trio’s employees make the difference. The business is known in the community as a good place for high schoolers to get a job. Carlow

Dealer profile

estimates that they have hired 400 to 500 students over the years. Several employees have worked at the store for 25 years or more.

“We hire on attitude, not knowledge. If you have a good attitude, you can learn about the merchandise. But first you have to have a good attitude for the customers, and that’s good for the store.”

Carlow also believes that customers want to get in and out as quickly as possible. That’s why all of the store’s 15 employees are trained to work the register. It pains Carlow to see customers waiting in line. “Customers come here looking for answers, then they want pay and get out,” he says.

The store also empowers employees, with each having autonomy over his or her areas and able to order items with approvals from Kirschner and Carlow.

“Everybody treats the store as if it’s their own,” Carlow says.

In addition, the store holds an allemployee meeting about every three months. Employees are encouraged to bring up suggestions to improve the store.

“These meetings definitely help the store,” Carlow says. “Often, customers will say things to employees that they may not say to Todd or myself. We’ve brought in different lines of products because of these meetings.”

For example, after a customer asked about stocking a line of pest control products, the store added the line and it’s sold well. n

Dealer profile

inDepenDent We StanD moVement enCourageS CommunitieS to “Buy loCal”

The national small business movement Independent We Stand announced Trio Hardware & Paint in Plainview, N.Y., edged out nine other finalists to win the 2013 Independent We Stand Independent Small Business of the Year Award, which is sponsored by Chrysler Group.

Independent We Stand is a movement of independent business owners across the country to inform their communities about the importance of “Buying Local” and how these efforts bolster their local economy. This movement supports all local and national causes committed to boosting local economic development projects. The Independent We Stand movement is co-sponsored by STIHL Inc. and Chrysler Group.

“Local communities came together to stand by their favorite businesses in towns across America,” said Bill Brunelle, executive director of Independent We Stand. “Trio Hardware & Paint goes above and beyond in customer service, making it easy for their customers to sing their praises. The Plainview community even rallied to keep a big box home retailer from coming to their town to ensure Trio could continue to survive and thrive.”

Trio Hardware & Paint will receive prizes with a combined value of more than $15,000, including:

• $5,000 American Express gift card from Chrysler Group.

• $1,000 STIHL equipment certifi cate redeemable at more than 8,000 local dealers nationwide.

• “Small Business Web Starter Package” from independent web design firm Launch Interactive

or ARI Network Services, which includes custom website layout design and programming with a location page with Google map integration and web traffic reporting.

• Three day/two night stay at an independent beach resort hotel in Virginia Beach, Va., as well as a tour of the STIHL Inc. headquarters and dinner with the Independent We Stand team.

• Award plaque to display at their business.

• Five-minute video to be featured on the Independent We Stand YouTube Channel.

Bruce Carlow, co-owner of Trio Hardware & Paint said, “The website design package and $5,000 gift certificate will be extremely beneficial in helping to improve our business and allow us to better serve our customers and employees.”

The 10 submissions that received the highest number of public votes were deemed finalist submissions. The winner of “The Indie” was chosen by a panel of contest judges.

Also among the finalists were Cornell’s True Value Hardware in Eastchester, N.Y., and Matt’s Building Materials in Pharr, Texas.

To learn more visit www.IndieBizAward. com or http://independentwestand.org/.

By John Franklin

Steps to Reduce 15

Problems Cash Flow

Every once in a while a business can experience a difficult time when the cash needed for inventory investment seems to dry up. The bills get paid slowly and the salesfloor shelves start to look a little lean. When a business gets short of cash almost everything about the job becomes far more difficult and more stressful. In a cash-poor situation it is important to know that a business-asusual direction will not speed your recovery and actually may have caused the situation. If you want things to change, you need to change what you are doing. Start with a new business plan. You need to know what is going on. There are many reasons why you might experience a cash-poor situation and you need to know exactly why you are in this situation.

If this is a temporary situation because of some abnormal expenses like a major

renovation, it may be a quick fix. If your store has been profitable over the last few years and only now are you in a cash crunch, then you can certainly lessen the effects until things get back to normal.

If the current situation is because of a history of continual profit loss, you have more work to do. Regardless of why you are in this position you need to do some things to lessen the effects.

When cash becomes short, there are only a few places where you have any flexibility. Hard cost like taxes, rent, utilities and the like are not adjustable. What follows are 15 steps you can take to reduce cash flow problems.

1.Be very careful what you buy. The first and most obvious step to alleviate a cash crunch is to pay closer attention to purchases. Don’t buy anything that you cannot sell in the next one to two months. Period. No exceptions,

bottom line

no matter how good a deal it appears to be.

A potential small increase in profit on some sales six or 12 months from now is not sufficient justification when you may not even be open then. However, it is imperative

that you place every order you can afford for an inseason A or B item that has just sold out. You must attempt to stay in stock for the noticeable stuff your customers buy every day.

2. Concentrate on taking care of

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customers who provide all your cash flow. Start to review your inventory daily. As you review orders for product, keep special attention on the fast-moving A and B items that generate most of your sales. These items got you in business, and they are the items that will get you back in good fiscal shape.

3.Avoid large orders for future sales, especially with extended dating terms. Why? Orders with extended dating are often a good deal for a retailer in a good cash position and buying on dating can indeed produce a small additional profit for the retailer who is doing well in all other areas of retail operation. However, buying on dating is almost never a good idea for a store in a poor cash flow position.

In fact, large dating orders can be the kiss of death for retailers in a seriously low cash position. It usually comes back like a windmill when the payment comes due and causes far more damage than good.

Unfortunately, I have known a few retailers who made the mistake of giving in to the temptation to build inventory on dating only to find most of the inventory was still there when they got the bill a year later.

Until cash flow is no longer a problem, do not be tempted to buy any inventory with long dating unless you are absolutely positive that you will sell all of it within one to three months. What you need now is inventory that will produce 30-80 percent profits today, tomorrow and this month, not inventory that will make you a possible 5-10 percent better profit six months or more

Liquidate dead inventory as quickly as possible so your money isn’t tied up in products that won’t sell.

from now. This unsold inventory will just be in your way, taking up space that you should use for more liquid inventory, and creating more work for you in dusting, pricing and cleaning.

You will also tie up your credit line and not be able to purchase the stuff you

bottom line really do need for the next few months while wasting time in placing orders and doing work that will not create immediate sales. Your time would have been better spent just taking care of customers.

4.Keep the salesfloor looking well stocked. The most common sign of a failing business is the glaring visual of an out of stock condition. Your survival depends on your ability to satisfy your

Store?

HIRE A PRO

customers. If your customers think that you cannot afford to refill your shelves, then they will lower their expectations of your ability to satisfy them and look to do business elsewhere. You must keep the floor looking good. If you have to, temporarily spread out what you have to make it look full.

5.Reduce your problem inventory. While you keep a careful eye on all your A and B items, your second most important job is to liquidate some current inventory. You can do this in two ways: sell it or return it to the vendor.

6.Sell as much of your current inventory as possible. It is much better to sell something you have, rather than order something new to sell. When cash is short, remember that every sale of current inventory usually produces on average more than two times more positive cash flow than when ordering new inventory. This is because every

dollar in sales created from an item that you order must also be shared with your supplier. Therefore possibly 50 percent or more of the customer’s cash from the sale does not help you.

7.Liquidate as much of your current inventory now as you can. Especially liquidate the inventory that you will not need to buy back. As you reduce your inventory put every free dollar back into new inventory that will be sold within the next 30 days.

Empty spaces on your shelves give customers the impression your store cannot afford to restock.

How do you locate problem inventory? Run a report that shows all inventory in the system above the quantity that will be sold in the next one to two months. Take this report and look for product that you have in really dead inventory. This is the inventory you want to liquidate first.

8.Consider reducing retail prices to increase sales of current inventory. You can reduce prices on C, D and X items to generate sales. However, avoid lowering prices on A and B items that should sell at regular price

bottom line

in a short period of time. If you reduce the retails on A or B items you just dilute some badly needed cash flow. You should only lower prices on inventory not likely to be purchased by the customer in the current period.

9.Program all markdowns on excess inventory so that you will sell it at the highest possible price. For example, take 10 percent off every month until it sells rather than a single deep 50 percent reduction taken all at once. Locate excess inventory that will not be sold in the next month or so and try to reduce it with as little loss as possible. In your haste to create cash, do not just give inventory away. You may need to do some work to promote it. Display your discounted inventory on endcaps and sign with bold pricing.

10.Consider returning some surplus inventory to the vendor. If your report shows some excess inventory not in A or B items, see if you can return some to your vendor. Do so even if you must pay a small penalty. If you are not going to sell this inventory in the next nine to 12 months, it is completely unproductive. Excess inventory will not create any cash from sales in the next few months, so sell it back to the vendor for cost. Then take the credit against your next invoice for goods you do need to add to your inventory. However, do not return excess inventory to the warehouse at a loss if you think you are going

to buy the same product again in the next six months.

11.Process all vendor credits on a timely basis. Make sure you file for, and get credit for, every return goods invoice (RGA), and/or other defective policy products taken back from customers. These credits are pure cash and will help you. Do not let credits get backed up in piles in the stock room. Returns don’t get better with age. Quickly get them converted to credits on your invoice at once and invest this cash on fast-moving goods.You should do this on a consistent and timely basis, possibly every week if you can.

12.Reduce every operational expense you can. Do everything you can to reduce incidental store expenses, but spend what you must to keep the doors open and the lights on full. Do not be tempted to turn down the lights to save money. It makes your store look less inviting. Do your best to reduce carrying charges and finance charges. Banks are paying ridiculous low rates for accounts but charge through the roof for late fees and finance charges.

13.Carefully review all advertising expenses. See if you can lower or cut some ineffective programs. Do not stop all advertising, since you clearly need more customers. It may be difficult and unwise to break contracts for future advertising, but make sure the advertising you continue to do is what you need. Use all of the networking or

social media you can to gather new customers. This is an important area. Work to make every dollar of advertising more productive. There is no real solution to a cash flow problem that does not involve customers.

14.Review accounts receivable. Make sure you are monitoring all accounts receivable. Do not let your customers slide too far when paying their bills. Talk to them and try to get them current. Be careful about extending credit to marginal customers.

15.Above all, have a good attitude. Get down on the salesfloor and help your customers with a smile on your face. If you walk around with a woe-is-me attitude, your employees and customers will pick up on that and cause business to suffer more.

If you were the person who started the business you may be fortunate. Because if you were not part of the original startup, the feelings of uneasiness and fear you have now are new to you. However, if you were there when the business started remember what you did.

To get out of trouble you just need to do exactly what you did the day you started the business: keep expenses at a minimum, stick to the budget and don’t buy anything you don’t need.

Remember, there was probably poor cash flow in the beginning, but you worked your way through it. If you take care of your customers, stick to the basics and do what you need to do, in a

little while things should get better, the same way they did when you started the business.

Some things have changed since the first day. The store started with an opening stock order, so the shelves were full. There was no old inventory, no accounts receivable and a budget to follow. Today, you have a few advantages not available at startup. Instead of a staff of raw recruits, you now have an experienced crew. Instead of guessing on what inventory will sell in your area, you now have an accurate sales history. Run some reports and get everybody to work. Your store needs you again.

Just don’t make things any more complicated than they need to be. The situation is complicated, but the solution, if there is one, is rather simple. Just get back to basics. Tight cash doesn’t have to be the beginning of the end. It just means you need to go back to the beginning before it is the end.

And, even if your cash flow is fine, you should try to do all of the things mentioned above every day anyway. It is just good business sense. n

John Franklin has more than 40 years of experience in hardware retailing, most recently as merchandise manager at Williams Lumber & Home Centers in upstate New York. Contact him with questions or feedback at john@thehardwareconnection.com.

emphasizing service&

Ace’s New Leader Promoting Ace Brand

Ace Hardware Corp.

will be focusing more heavily than ever on two important strategies: increasing the promotion of its brand name, Ace, and emphasizing the necessity for and advantages of its 4,760 stores providing better customer service than bigbox competitors.

JOHN VENHUIZEN, THE LONGTIME employee who became president and CEO in 2013, sees superior service, together with localized inventories and individual initiative, as keys for its members to survive against well-capitalized giant retailers like Home Depot, Lowe’s and Walmart. “We’ve got to be the place where they go for better service,” he says.

For many years, Ace has been aggressively promoting a simple

John Venhuizen became Ace’s president and CEO in 2013.

advertising message: Ace—the helpful place. Over the last few years, it has been ramping up spending to support its retailers and promote that slogan. That it is not an empty ad slogan but is born out by the fact that again in 2013, for the seventh consecutive year, Ace stores ranked “Highest in Customer Satisfaction” among home improvement stores, according to J. D. Power & Associates, a national research firm.

Under Venhuizen, Ace corporate has committed to double its national advertising without additional costs to its retail owners. With what Ace retailers spend on their own (on average 2.5 to 3 percent of sales), this means the Ace brand is being promoted by more than $300 million per year locally in addition to Ace’s national advertising.

As Ace works hard to promote its brand, Venhuizen is also committed to ensuring that Ace’s 4,760 hardware stores, home centers and lumberyards continue to provide superior service. That Ace service continues to be outstanding is almost an obsession with the company head.

Venhuizen says another way in which Ace members can compete against retail giants is by offering an improved assortment of local, highquality products, and the company is working to help them locate such products. It also is offering incentives and educational programs to help retailers train employees and continue to improve customer service. Helpful 101 is the appropriately named training program Ace has developed.

Understanding and meeting the needs of customers is natural for Venhuizen, given his background. He joined Ace 21 years ago in the marketing department and over those two decades ultimately headed that department and then assumed broader responsibilities in a variety of roles,

Ace Hardware stores have been selling Craftsman tools since 2010.

including business development, before becoming president and CEO in 2013.

Ace today is not only the world’s largest hardware distributor, it is also one of the most active international distributor, serving retailers in 63 countries who operate 629 stores, including a recently added Afghanistan merchant.

Domestically, Venhuizen says one of the major problems facing its members is ever-increasing government regulations. These burdens add complexity to the art of retailing as well as increased expenses. Ace is taking steps to help its dealers cope with these and other challenges through a seven-year plan called 2020 Vision. It is designed to leverage the co-op’s strengths and to help Ace retailers become better at those things for which Ace is known—convenience, quality and service.

2020 Vision contains two growth paths for domestic and international members: one to help Ace retailers improve their stores’ performance by increasing sales and net profits and the

other to help Ace retailers open new stores and/or purchase existing stores.

Recognizing that as store owners age, store perpetuation becomes a problem, earlier in 2013 Ace developed an innovative web site: hardwarestoresforsale. com, which provides a place where any retailer wishing to sell an existing store can describe it and post the amount he or she is seeking. This site offers a way for any expansion-minded retailer or new-to-retailing buyer to check out opportunities that exist within their market area and/or investment potential. It is not limited to Ace retailers.

One of Ace’s unusual merchandising innovations was its decision in 2010 to begin selling Craftsman tools, the highly regarded private-label line originated by Sears. The Craftsman brand is often referred to as the best-known tool brand in America, but it had been traditionally sold only by Sears, and Sears’ sales have been in decline for several years.

Ace is now doing more than $100 million annually in Craftsman sales, Venhuizen says, and offering that wellknown brand has enabled Ace retailers to regain some market share in power tools, after losing market share in that category to Home Depot and Lowe’s. As an example, he says sales of snow blowers are up 500 percent compared to preCraftsman days.

Ace is moving aggressively to use the internet as a marketing and promotional

Ace Hardware will be placing more emphasis on training and customer service to help its members stand out in ther marketplace.

“ we’ve got to be the Place where they go for better service.”

—Ace President John Venhuizen

tool by offering merchandise for sale on its website, with ship-to-store options, which bring customers into participating Ace retail stores, giving them an opportunity to demonstrate Ace’s customer service. The co-op has also helped its retailers send out nearly 50 million email messages to local customers.

Some Ace stores do considerable business with commercial accounts; others do not. To help those who haven’t been doing as much commercial business as others—and probably to combat the efforts of Home Depot in this regard, Ace has launched a new “brand” called The Supply Place. As Venhuizen puts it, “Who can better serve a local business than another local business?” n

Weather monitor

Whatʼs Up With the Weather?

Other than the economy, no factor plays a more important role in sales and seasonal purchasing decisions than the weather. To help hardware and home improvement retailers make more informed buying decisions for seasonal products, The Hardware Connection is introducing the Weather Monitor.

Using forecasts from the National Oceanic and Atmospheric Administration (NOAA), we will be bringing you short-term and long-term weather projections throughout the year. The Hardware Connection Weather Monitor will also be posted and updated on our website, so you have the latest weather forecasts available to keep you informed.

Source: National Oceanic and Atmospheric Administration

The weather is probably a sore subject these days, with half the country forced to endure frigid temperatures and aboveaverage snowfall in January due to the “Polar Vortex.” However, the winter got off to a mild start.

Weather monitor

The average combined global land and ocean surface temperature for December 2013 was the third-highest since records began in 1880. November was the warmest ever globally and 2013 was the fourth-hottest year in recorded history.

This seasonal outlook does not project where and when snowstorms may hit or provide total seasonal snowfall accumulations. Snow forecasts are dependent upon the strength and track of winter storms, which are generally not predictable more than a week in advance.

30-Day outlook for february temperature

• Above-normal temperatures projected for California, the Great Basin and the Central and Southern Rockies, as well as across Texas and the Southeast to the South Atlantic Coast.

• Above-normal temperatures predicted for the West and South, while below-average temperatures are indicated for the Northern Plains and the Great Lakes Region.

30-Day outlook for february precipitation

• Greater probabilities for belowmedian precipitation for California, the Great Basin and Arizona, as well as the Gulf Coast and the South

Atlantic Coast. Above-median precipitation is projected for the Southern Alaskan Panhandle.

forecast for february-march-april

• Increased chances for above-normal temperatures for the southern half of the contiguous U.S. and the northern and western portions of Alaska.

• Elevated chances for below-normal temperatures for much of the Northern Plains and Minnesota, and for South-Central and Southeastern Alaska including the Panhandle.

• The precipitation outlook calls for enhanced odds of above-median precipitation for a small region centered on the lower Ohio Valley and the Alaska Panhandle.

• There are increased odds of belowmedian precipitation for California and much of the Southwest, the Central and Eastern Gulf Coast Region and most of the Southern Atlantic Region.

longer-term forecast:

• The outlooks for March-April-May and April-May-June are somewhat similar to the February-MarchApril period. The small area of the Northern Plains and Minnesota that was projected to receive below-normal temperatures during FebruaryMarch-April shifts slightly to the East for the March-April-May period.

• Above-normal temperatures are anticipated across the Pacific Northwest by May-June-July and June-July-August.

• Above-median precipitation favored in the Lower Ohio Valley for March-April-May.

• 2014 might end up the hottest ever due to an expected El Nino, which could also cause massive rain in certain parts of the country later in the year.

DROUGHT TO PERSIST IN SOUTHWEST AND SOUTHEAST

• The rest of winter is likely to offer little relief to the drought-stricken U.S. Southwest, and drought is likely to develop across parts of the Southeast as below-average precipitation is favored in these areas of the country.

• Sea surface temperatures across the equatorial Pacific have been near average since spring 2012, and forecasters expect that to continue through the winter. This means that neither El Niño nor La Niña is expected to influence the climate during the rest of the winter.

Click here to see maps showing the temperature and precipitation outlook for February-March-April.

Click here to see a map showing the outlook for drought through the end of April. ■

Sponsors:

2013 Co-Sponsors:

The Hardware Conference Mixes Business

With all the frigid weather sweeping the country, wouldn’t it be nice to hit the beach? You can do that and a lot more when you attend The Hardware Conference, which is set for September 5-7 at the Marco Island Marriott in Marco Island, Fla. The industry’s largest gathering of independent retailers offers the perfect opportunity to find ways to improve your business while having lots of fun.

PLEASURE and

Start making plans to attend an uplifting event that can have a positive impact on your business. It’s the perfect opportunity to bring your whole family to a five-star resort right on the Gulf of Mexico with three miles of pristine white beaches.

The Hardware Conference is held each September at the beautiful Marco Island Marriott right on the water in Marco Island, Fla.

Tom and Dale Chasteen, who operate Tavernier Hardware in the Florida Keys, will be marking the 26th anniversary of putting on the Conference. With a personal touch and a lot of hard work, they have developed a familyfriendly, affordable event that brings independent dealers together, regardless of wholesaler affiliation.

“We feel it’s vitally important for dealers to get out of their stores and interact with fellow dealers and learn what’s

The Hardware Conference is truly a venue where long-lasting relationships are formed.

going on in the industry,” Tom says. “Why not do that in a beautiful place and have a lot of fun at the same time?”

The industry’s premier event for the independent retail hardware channel

took its awards program to another level last year. A new recognition program was developed to recognize the “best of the best” retailers—the Beacon Awards, which are co-sponsored by The Hardware Conference and The Hardware Connection. Additional sponsorship support last year came from Apex Tool Group, Sunnyside Corporation, Epicor, Ace Hardware, Do it Best Corp. and True Value.

In addition to Beacon Awards for each of the participating wholesalers, the awards banquet honors the industry’s best new stores. The 2013 winners for Best New Store were Hartville Hardware in Hartville, Ohio (over 25,000 square feet) and Lutz Ace Hardware in Lutz, Fla. (under 25,000 square feet). Whether it’s an existing retailer opening a branch store or a newcomer opening a ground-up business, these new stores represent the future of the industry.

The 2014 Beacon Awards banquet will be held Friday evening, September 5, 2014, at the Marriott Marco Island. Winners will receive all-expense paid trips for two to the 2014 Hardware Conference including conference registration, airfare, hotel and meals. They will also receive a special Beacon Award plaque and be featured in an article in The Hardware Connection.

Get your nominations in now for the Best New Store category—the entry deadline is June 1, 2014. For more

Howard Miller of Hartville Hardware is shown making his acceptance speech for the 2013 Beacon Award, which honors the industry’s most outstanding retailers.

information on the nomination process, contact Tom Delph, Beacon Awards program director, at tdelph@ thehardwareconnection.com.

Leading vendors participate in the Conference with tabletop booths showcasing their latest new products. Dealers also have the opportunity to engage in informal conversations with manufacturers without the pressure of buying. Another popular feature of the event is the open dialogue sessions, where dealers join vendors and wholesaler representatives in a frank discussion of industry topics of concern to all.

“I had no idea the Conference had so much to offer. We had a great time and look forward to coming back,” said first-time attendee Pat Sullivan of Sullivan Do it Best Hardware & Garden in Indianapolis, who was another Beacon Awards winner.

The Conference is designed for the whole family, with plenty of free time for fun activities such as golf, sailing, shelling and walking on the beautiful sandy beach. For more information, go to TheHardwareConference.com. ■

By John Fix III

M&M Lumber in Tulsa, Okla., follows a standard policy when signing for shipments.

Playing

the Game

Lottery

Hope everyone had a safe, enjoyable and profitable holiday shopping season. As most of us wait for the bustling spring selling season, let’s take a look at some Hardlines discussions from the past few months.

Lottery tickets

Chris Hughes of Hardware Plus in Osceola, Ind., was curious about selling lottery tickets in the store. “We were approached to sell lottery tickets. I was wondering if anyone had any experience in this? Pros/cons, etc? The footprint would be small, they say. I have had one member tell me they have success and it brings people in. Anyone else have any input? I am on the fence about this,” he said.

Don Keller of K&K True Value in Bettendorf, Iowa, had some thoughts on the subject. “We sold some a few years ago. Had traffic but saw very few buyers of merchandise. Thought this would change over time but after six years still saw no increase. When the large jackpot happens team members are tied up selling tickets, not helping customers. It was not worth it for us.”

Tim Kuhn of Los Molinos Ace Hardware in California didn’t sell them in his store but did have some observations. “What I’ve seen at the convenience store next door is a lot of undesirable types who shouldn’t be wasting their money in the first place. Also, ‘Give me a pack of cigs, two bucks worth of gas and a lottery ticket...and do you have zig zags?’ Not the element I want hanging in and about our store.”

Jim Ertzman of South Hills True Value in Pittsburgh added some thoughts to the discussion. “I agree, however, I would also submit that most people who have been playing the lottery already have their favorite places and are not going to flock to your store if you get a machine. Your lottery sales are going to be from people who are already your customers and are in your store for other reasons.”

He added, “A couple of decades or so ago I tried to get a machine. Computers were still expensive and in Pennsylvania you had to first consistently sell a predetermined quantity of scratch-offs

every month. There was already a convenience store four doors away and four more locations within a quarter mile, all with machines. We sold a lot but could never meet the sales volume requirement due to market saturation. We had a SKU for them and for security balanced the inventory daily. We only made a nickel per dollar so you had to sell 20 scratchies for every unaccounted for scratchie just to break even. So besides not making much for the amount of hassle and clerical work customers often took seemingly forever to decide which ones they wanted. Then they scratched them off while you were ringing them out. If they won something you still had them tying up the checkout getting paid or more tickets. We eventually gave it up along with fishing licenses.”

Ertzman continued, “I think the only way to sell scratch-offs is with a vending machine. The market is getting more saturated with lottery machines. Rarely do I see the huge lines of the old days at any lottery machine even when there are huge jackpots. I don’t think the lottery is a good proposition any more unless you have no other competing merchants for the same sales. The footprint may be small, but if you do any significant lottery business the employee hours and clerical time won’t be small. Profitability is probably debatable.”

Marilyn Weisman of Absecon Do it Best Hardware in New Jersey has had

Retailers shared their procedures for checking in merchandise from suppliers.

mixed results. “We’ve been selling lottery for 15 years or so. Not worth a plumb nickel as far as making money. It used to be exciting when the jackpots got high, but now, in New Jersey at least, they have opened so many agents that even a $344 million dollar jackpot doesn’t draw the lines that used to go all the way around our store years ago.”

She added, “Most of the customers are either lottery customers or store customers—no real crossover. It is not like a key machine, which if you place it at the back of the store they will walk back and on their way pick up several other impulse items. The most impulse we get from lottery might be a candy bar. We are actually thinking of dropping it and moving a key machine up into its place.

hardLines digest

By the way, don’t put it anywhere except the front counter—lottery customers won’t walk to the back of the store.”

signing for shipments

Brandon Buckalew has had some problems with shipments and shortages. “We drop ship a lot of stuff into the store. Sometimes there is a pallet of 20-30 different SKUs with several quantities of each SKU. When the deliveries come, someone looks over the stuff quick and signs for the driver and most of the time we are good to go. Lately, I’m getting more and more friction when we call a vendor and say we are still waiting for an item to show up. They say, ‘We sent it, and you signed for it.’ Are they expecting me to make that delivery driver wait, while we check in the entire pallet just to make sure every item is there? Because I’m not far from wanting to do just that.”

Steve Beeson of Beemun’s Variety in Alaska shared his procedures. “All our freight comes through a freight forwarder. Our ship to address is in Tacoma, Wash., and it gets to us from there. That said, I make the drivers wait until we sort the pallets (unless it is shrink wrapped from a company) and verify counts. We also discover any boxes that are not ours during that process. All our signed delivery receipts have STI put on them (subject to inspection) in case of any concealed damage.”

Whitney McKellar of M&M Lumber in Oklahoma agreed. “We do the

SEPTEMBER 5-7

register here today!

3 Days of Networking, Relaxing and Learning

Meet colleagues and new friends at the industry’s largest conference for independent hardware retailers. Share ideas with top retailers on how to grow your business, interact with key vendors on how to increase sales in your store and attend educational seminars, all-industry cocktail receptions and dinners in an exclusive 5-star resort setting.

Learn More About Your POS System at the Hardware Technology Forum

Honor

the Industry’s Best Retailers at the 2014 Beacon Awards

Epicor, ECi Advantage/ECi RockSolid and J-3 POS will offer full-day, hands-on training sessions for their retailers. Bring your tablet or laptop so you can log right into your store as you learn new “tips and tricks” to make your POS software more productive in your store. The Beacon Awards are an important recognition program that honors the best of the best dealers who represent the future of the industry.

Steve Beeson of Beemun’s Variety in Alaska makes drivers wait until he verifies counts.

same—subject to count and subject to inspection as the driver is usually itching to get on to his next delivery. Unless there is obvious damage to denote, we will write ‘Subject to count - Subject to inspection’ and then sign and date it. It has covered us several times.”

Randy of Garden City Ace in Michigan has a similar policy. “I sign all delivery forms with an SL&C boldly in the middle. Apparently, SLC is trucking company shorthand for Shippers Load and Count. It pushes the responsibility for the count back on the shipper. I had someone from my main supplier (Ace) call me once to challenge a claim. She used the same logic to try and deny my claim. So ever since, it is SL&C on every bill of lading.”

Gary Hanson of Cardinal Hardware in Montana weighed into the discussion.

“If the bill of lading says they are delivering a pallet, then we just look for any crushed boxes. If all looks OK we sign. If crushed or even dented boxes we note possible damage and sign. If bill of lading says pallet with 49 boxes, we count all boxes as we are receiving boxes

not pallets. We still make notations on damage.”

Hanson added, “It all depends on the company we work with on making the damage on the bill of lading. Some suppliers just cover any trucking damage. Others say it is the trucking company’s problem. If you don’t make any notations on the bill of lading they won’t give you anything, but if it says possible damage, they can’t say it wasn’t them. They generally don’t like it when you put that on, but I’ve learned if they balk at it we will open those boxes before we sign. They hate that even more, but you have to protect yourself.”

McKellar at M&M Lumber agreed. “We do the same - Subject to count and Subject to inspection as the driver(s) are usually itching to get on to their next delivery. Unless there is obvious damage to denote, we will write “Subject to count - Subject to inspection” then sign and date it. It has covered us several times.”

These are two of the many topics discussed during the past few months on Hardlines Digest. To read more or subscribe, go to www.hardlinesdigest.com. Hope to see you on the list! n

John Fix started the Hardlines Digest in January 1996. The list was run for many years using servers in John’s hardware store, but recently the list migrated to Google Groups. There are currently more than 1,500 subscribers reading the Hardlines Digest.

PAINT / DECORATING TRENDS

Sales of Caulks & Sealants (Independent Hardware Channel) 12 Months % Change vs. Year Ago

Caulks & Sealants:

Source:

Unit Sales Breakdown for Caulks & Sealants

Total of 1,325 Items with Sales

Paint / Decorating Buying uPDate

• Purple, more specifically Radiant Orchid (18-3224) is predicted to be the 2014 Color of the Year, as determined by Pantone.

• Emerald was the dominant color for 2013 and was seen “as a symbol of growth, renewal, and prosperity,” according to Leatrice Eiseman, executive director of the Pantone Color Institute. Radiant Orchid, however, inspires more innovation, creativity and originality, she says.

• Retailers can encourage customers to incorporate the purple hue with shades of olive and deeper hunter greens, Pantone recommends. The color also matches well with teal, turquoise and light yellows. The color professionals suggest using Radiant Orchid to “liven up neutrals” that have been a mainstay in decor, such as gray, beige and taupe.

• Other colors expected to break out in 2014 are Dazzling Blue and Sand.

• Color is a major key to how a room’s decor is perceived. If it’s a big room, paint it a brighter, warmer color to bring the walls in, according to designer Scott Sanders. Paint a smaller room a cooler color to push the walls out.

• Specialty faux and decorative finishes are regaining popularity, especially textured fresco and smooth fresco, which find their inspiration in ancient plastering methods; as

Customers will spend more time and money in a paint department if they have a comfortable place to sit down. This is from Bell Building Supply in Starkville, Miss.

Winter is a major time for wood finishing projects to be completed.

well as smooth, brushed and textured metallic finishes.

• Faux finishing projects are extending beyond walls to cabinets, furniture and ceilings.

• Textured finishes such as suede and slate remain popular with decorators, while the hammered/distressed look has spread from walls to ceilings, moulding, furniture and accent pieces.

Paint/Decorating ProDucts

Muriatic aciD rePlaceMent

• Cleans, brightens and prepares concrete prior to coating and sealing.

• Features 90% less fumes.

• Lowers pH in swimming pools.

• Safer to use than muriatic acid.

Sunnyside Corporation

www.sunnysidecorp.com 847-541-5700

shiMMer Metallic sPray Paint

• Ideal for home accents, accessories, holiday crafts, sporting equipment, decorations, jewelry and more, Shimmer Metallic looks good and works hard, featuring just enough sparkle to make projects special.

• Available in nine Shimmer shades: gold, silver, red, green, blue, black, pink, purple and black cherry.

• Provides a durable and decorative finish that provides a hint of sparkle without fading, chipping or peeling.

• The fast-drying formula, which dries to the touch in just 10 minutes, works on almost any material, including wood, metal, glass, wicker, ceramic, pottery and craft foam, allowing you to complete a variety of indoor and outdoor projects.

Krylon www.krylon.com 800-247-3268

a growing community of thousands of

“I created Hardlines Digest in 1996 as a way for my fellow retailers to swap tips about the nitty-gritty of running an independent hardware store. Today, it’s grown to a community of thousands of independent hardware store owners just like you. I hope you’ll join today and start sharing your own expertise.”

John Fix Owner, Cornell’s

Hardware Eastchester, NY

Paint/Decorating ProDucts

DryloK® clear

• A clear waterproofer for interior/ exterior floors, walls and decorative surfaces.

• For horizontal surfaces, use alone on concrete or as a vapor barrier under adhesive and flooring.

• On vertical surfaces, resists driving rain and 98 mph wind on exterior surfaces and hydrostatic pressure on interior walls.

• Features high-gloss finish and high abrasion resistance. United Gilsonite Laboratories www.ugl.com 800-UGL-LABS

cirrus™ roller line

• Has been expanded to include four different nap heights that take their production value beyond uneven surfaces: 3/8-, 1/2-, 3/4- and 1-inch.

• All of these new pile choices are available in 9-, 14- and 18-inch sizes.

• Cirrus rollers are soft, resilient, and easy to load. High-capacity European fabric delivers fast, complete coverage with all flat, eggshell and satin paints, stains and sizings.

• The Cirrus roller brand is low spatter and durable for rough surface applications, but now possesses enough versatility to handle smoother surfaces as well.

Bin aDvanceD synthetic shellac

PriMer

• After years of research and development, Rust-Oleum has introduced a primer and sealer made with synthetic shellac that mirrors the same properties as traditional shellac.

• BIN Advanced boasts ultimate stain blocking and superior odor sealing, with a high hiding bright white finish, sealing and hiding everything from water and rust stains to graffiti, grease and crayon.

• BIN Advanced boasts the same features and performance as traditional BIN but in a water-based, low-odor formula.

• It has excellent adhesion and sticks to slick surfaces such as Formica, tile, glossy paints and varnishes. It is dry to the touch in as little as 25 minutes, and can be top coated after 45 minutes.

WooD Finishing cloths

• Take the convenience of a one-step wiping stain and finish to a new level, with everything needed in one package including plastic gloves.

• Simply wipe on the stain and finish using the pre-moistened cloths, wipe off the excess with a clean rag, let dry for an hour and you are done. For an even deeper color and sheen, apply another coat.

• Each package covers 50 square feet.

• Recommended uses include furniture, woodwork, wood cabinets and wood accessories.

IN THE NEWS

NEW STORES:

■ Kent and Sandra Carmichael are opening their fourth store, an Ace Hardware in Marion, Kan.

■ Terry Deaver opened his fifth Ace Peninsula Hardware store in Hampton, Va.

■ The Barnes family is opening its fifth Ace Hardware store in Colorado Springs, Colo.

KUDOS TO:

■ Several partners within the plumbing industry have teamed up to introduce a program to benefit wounded American active-duty soldiers and veterans. Operation Rise & Conquer (initiated by the American Supply Association and industry partners APR Supply, First Supply, Hajoca, Oatey, VAMAC, Danze and Gerber Plumbing Fixtures) allows these soldiers to participate in a weeklong, specially equipped outdoor adventure in Colorado. Learn more at www.riseandconquer.org.

■ Parker Do it Best Lumber in Beaumont, Texas; Bliffert Lumber in Milwaukee; and Main Street Lumber in Denison, Texas, were named Entrepreneurs of the Year by LBM Journal.

■ Jared Littmann of K&B True Value in Annapolis, Md., was appointed to the board of directors for True Value Company.

PEOPLE ON THE MOVE:

■ Doug Laird has been promoted to vice president-hardware sales for Apex Tool Group.

■ Jonathan Mize has been appointed CEO of Blish-Mize Co., succeeding his father, John Mize, whose new role is executive chairman. For the past few years, Jonathan has served as president and COO and is the fifth generation of the Mize family to hold the title of CEO. He also serves as president and COO of Hardware House LLC, a subsidiary co-owned by Blish-Mize and House-Hasson.

“As we enter our 143rd year in business, we have a great team, and we are in a great position to continue to help our customers be successful in hardware retailing for many more years to come,” said Jonathan Mize.

■ Ace Hardware Corp. has appointed Tom Knox, as president and CEO of Westlake Ace Hardware, Ace’s largest cooperative comprising 85 stores. Knox will be leaving his role as vice president,

retail business development, training & supply at Ace’s corporate offices and relocating to the Kansas City area to pursue his new role.

■ Blish-Mize Co. promoted Lydia Funk to executive vice presidentCFO and Greg Lutz to executive vice president-operations.

■ Handy Hardware hired Craig Cowart as EVP-Merchandising and Marketing; and named Mickey Schulte senior VP-sales and key accounts.

■ Danze Inc. and Gerber Plumbing Fixtures has promoted Jeff Pratt to senior vice president of sales.

■ Do it Best Corp. has named Rob Schmiedel national sales manager and Scott Orman national logistics manager.

WHOLESALERS IN THE NEWS:

■ Forty-one PRO Hardware retailers from across the country mixed with distributor personnel and manufacturers at the PRO Hardware Achievers Club trip January 5-9 in Cabo San Lucas, Baja Sur, Mexico. The Achievers Club is PRO Hardware’s national recognition and awards program for

PRO Hardware retailers. Attendees benefited from a business meeting, networking opportunities and sharing of best practices, while also taking advantage of the world-class amenities at the Sheraton Los Cabos Hacienda Del Mar Golf Resort & Spa.

OTHER NEWS:

■ ACO Hardware announced its 52 stores in Michigan have begun a six-month transition to become affiliated with Ace Hardware. The stores will operate under the name Great Lakes Ace.

IN MEMORY:

■ Robert Casper, founder of Casper True Value Hardware in Lake Zurich, Ill., passed away Nov. 30 at the age of 92. The World War II veteran founded the store in 1965, passing on the business to his son, John, 10 years ago.

■ Bill Englert, owner of City True Value Hardware and Just Ask Rental in Bristol, Conn., passed away on New Year’s Day at the age of 71. He was very active in the Central Connecticut Chambers of Commerce.

DO IT BEST CORP. PRESIDENT EMERITUS

DON WOLF RECEIVES 2013 SACHEM AWARD

Indiana Governor Mike Pence presented the Sachem Award to Don Wolf, the longtime president and CEO of Do it Best Corp., at a December 19 event in Fort Wayne, Ind.

As Indiana’s highest honor, the Sachem Award is presented to only one resident of the State of Indiana each year and it recognizes its recipient for displaying an exemplary, sustained combination of virtue, moral example, business success and career achievement. Pence presented the award to Wolf in front of 300-plus family, friends and community leaders at a ceremony at the Grand Wayne Center in downtown Fort Wayne.

“Don exemplifies everything the Sachem Award stands for and, just as importantly, what it means to be a Hoosier,” Pence said. “It is more than his notable achievements in business that make Don Wolf worthy of Indiana’s highest honor—it is his character, his selflessness, his generous nature and his unwavering commitment to serving his neighbor. He lives the traits that we Hoosiers hold dear, and he personifies the principles of servant leadership.”

Wolf served as president and CEO of Do it Best Corp. for 25 years and is one of Indiana’s most renowned and accomplished philanthropists and community supporters of numerous non-profit and charity organizations, including the

From left to right: Do it Best President and CEO Bob Taylor, Indiana Governor Mike Pence, Sachem Award honoree Don Wolf and Do it Best President Emeritus Mike McClelland.

Don Wolf addresses a crowd of family, friends and community leaders on hand to see him accept the Sachem Award, Indiana’s highest honor.

founding of Big Brothers Big Sisters and Study Connection in Fort Wayne. Other dignitaries at the event included Do it Best Corp. President Emeritus Mike McClelland and current President and CEO Bob Taylor.

“It is a humbling experience to be recognized by the governor with this award and to be joined by so many in doing so today,” added Wolf. “I worked to set an example for others in both my professional and personal life, and it is a wonderful feeling to see that those efforts have a lasting impact on our community and our state.”

The governor personally selects the Sachem Award recipient each year. Previous recipients include legendary basketball coach John Wooden; and Carl Erskine, former Brooklyn and Los Angeles Dodgers baseball player.

Click Here to see the Don Wolf Sachem Award presentation.

FEBRUARY

Ace Hardware Corp. Spring Convention

February 24-26, George R. Brown Convention Center, Houston

Florida Hardware Spring Market

February 14-16, Doubletree Hotel & Convention Center, Orlando, Fla.

Handy Hardware Spring Market

February 13-15, George R. Brown Convention Center, Houston

International Builders’ Show

February 4-6, Las Vegas Convention Center, Las Vegas

Kitchen & Bath Industry Show

February 4-6, Las Vegas Convention Center, Las Vegas

Long-Lewis Great Southern Hardware Expo

February 15-16, Montgomery Convention Center, Montgomery, AL

Monroe Hardware Spring Show

February 8-9, Cabarrus Arena & Events Center, Concord, N.C.

Northeastern Retail Lumber Association LBM Expo

February 26-28, John B. Hynes Memorial Convention Center, Boston

Orgill Inc. Spring Dealer Market

Feb. 27-March 1, Orange County Convention Center, Orlando, Fla.

Southern Hardware Company Spring Dealer Market

February-March 1, Harrah’s, Robinsonville, MS

True Value Company Spring Market

February 22-24, Georgia World Congress Center, Atlanta

MARCH

Blish-Mize Spring Dealer Market

March 21-22, Overland Park Convention Center, Overland Park, Kan.

Eisenwarenmesse 2014/ International Hardware Fair

March 9-12, Cologne, Germany

Emery-Waterhouse Marketplace 2014

March 14-15, Rhode Island Convention Center, Providence, R.I.

Hearth, Patio & Barbecue Expo 2014

March 6-8, Salt Palace Convention Center, Salt Lake City, Utah

International Home & Housewares Show

March 15-18, McCormick Place, Chicago

APRIL

Home Hardware Spring Dealer Market

April 6-8, Henry Sittler Building, St. Jacobs, Ontario

TruServ Canada Spring National Buying Market

April 12-14, Winnipeg Convention Centre, Winnipeg, Manitoba

Send calendar dates to chris@thehardwareconnection.com

retail ideaS

Vintage Soda offerS noStalgic appeal

More hardware retailers are discovering the benefits of selling old-fashioned bottled soda, which offers a nostalgic appeal to customers of all ages. It may not be the same as when soda fountains were in their heyday in the 1940s and ‘50s, but with colorful labels and a wide variety of flavors, these soda bottles are flying off the shelves.

It takes a little experimenting to see what flavors will resonate with your customers, but it’s a good idea to keep rotating in new flavors anyway. Garden City Ace in Michigan offers a wide variety of specialty sodas including 21 different varieties of root beer.

“We use a local soda company call Black Bear. Soda sells for less than $1.00 with a better than 50 percent gross margin,” says Herman Fillinger Jr. of A Fillinger Inc. in Milwaukee.

Garden City Ace in Garden City, Mich., has a Soda Shoppe with specialty sodas including 21 different types of root beer.

Jay’s Ace Hardware in Wrens, Ga., has a beverage cooler with a few private-label drinks from a company called Private Label Beverages. “The private-label root beer sells real good,” says President Preston Bullock.

“We bought one of the small, glassfront refrigerators from Sam’s. We buy pop on sale from grocery stores and Sam’s Club. We did have a small regular fridge with signs on the front but didn’t sell much. People would open it and look but didn’t buy. When we got the glass front, sales increased a lot,” says Barbara Mills of Faulkton Hardware Hank in Faulkton, S.D.

“We buy water and bottles of Hank’s Gourmet Root beer, orange creme, vanilla creme, and I am adding birch beer through our wholesaler,” Mills adds. “It is like old-fashioned root beer. To get people interested we gave away a bottle a day for a while, but now we have people buying cases.”

Kids have fun making and trying out marshmallow blow guns and silly slime.

Bellingham Ace’s mad scientist, Shawn Bjorback, entertains and educates kids each month with Hardware Science Day experiments.

the Mad ScientiSt iS in the houSe

Bellingham Ace Hardware in Bellingham, Wash., has had success putting on a Hardware Science Day event the third Saturday of every month. Employee Shawn Bjorback conducts hands-on experiments with kids such as making silly slime, a marshmallow blow gun, a food battery and a dry ice smoke ring cannon.

The ultimate goal is to engage young minds in science, technology, engineering and math, but it makes the store look like a fun place to shop as well. n

BEHIND THE NUMBERS

10 million

Number of albums sold by six-time Vocal Group of the Year Diamond Rio, who performed a concert January 17 that was free for attendees of the House-Hasson Dealer Market in Nashville, Tenn.

36.8 million

Number of items sold by Amazon on Cyber Monday. Half were sold through a mobile device.

25%

Percentage of U.S. population who will be over the age of 65 by 2031.

45%

Percentage of U.S. population younger than 35 in 2015 who will be Hispanic.

20%

Percentage of Echo Boomers (born between 1980 and 1995) who list owning a home as a major priority.

8

Number of new stores The Home Depot is planning to open in 2014.