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Paint the Perfect Plan

Captivate

Retailers Share 3 Paths for Succession Planning Page 18

OPENING DOORS TO INSPIRATION

Gel Stain

Excellent adhesion to fiberglass and previously finished surfaces

Concentrated to achieve beautiful, bold color

•Perfect for previously finished surfaces like cabinets and vertical surfaces

•Achieve intense, uniform color in a single application

Easy one coat application for a variety of projects

•Use on floors, trim, interior doors, cabinets, furniture, and general woodworking

•Highly pigmented, thick oil-based stain

•Available in 24 popular trend colors

1025 E. 54th St. Indianapolis, Indiana 317-275-9400 NHPA@YourNHPA.org YourNHPA.org

COMMUNICATIONS

Melanie Moul Communications & Content Manager mmoul@YourNHPA.org

Lindsey Thompson Associate Editor lthompson@YourNHPA.org

Carly Froderman Associate Editor cfroderman@YourNHPA.org

Jess Tillman Retail Training Editor jtillman@YourNHPA.org

Autumn Ricketts Graphic Designer

Olivia Adam Graphic Designer

Austin Vance Production Manager

Freda Creech Sales & Production Assistant

Kevin Trehan Digital Media Specialist

Julie Leinwand Marketing Manager

ASSOCIATION PROGRAMS

800-772-4424 | nhpa@YourNHPA.org

Katie McHone-Jones kmchone-jones@YourNHPA.org Director, Member Services & Events

Kim Pefﬂey kpefﬂey@YourNHPA.org Director, Organizational Development & Consulting

Jesse Carleton jcarleton@YourNHPA.org Training Manager & Editor

Renee Changnon rchangnon@YourNHPA.org Retail Engagement Specialist

SALES

LeAnn Day lday@YourNHPA.org Publisher

Scott Gilcrest 317-508-7680 | sgilcrest@YourNHPA.org Director of Sales & Southern Sales Director

Jordan Rice 217-808-1641 | jrice@YourNHPA.org Northern Sales Director

ACA D EMY

OUR MISSION

The North American Hardware and Paint Association (NHPA) helps independent home improvement and paint and decorating retailers, regardless of affiliations, become better and more profitable retailers.

Join Our Family

Register your operation as a Premier Member of the North American Hardware and Paint Association (NHPA) and get immediate access to a wealth of paint-specific training content. Plus, you’ll have access to additional courses on relevant topics like merchandising, selling skills, inventory management and more.

Not sure if you’re a Premier Member? Contact NHPA Retail Engagement Specialist: Renee Changnon

rchangnon@YourNHPA.org 317-275-9442

Scan the QR code to register or learn how to take advantage of the courses.

PAINT & DECORATING RETAILER

(ISSN 1096-6927): Published monthly except December by the North American Hardware and Paint Association, 1025 E. 54th St., Indianapolis, IN 46220. Phone: 800-737-0107. Subscription rates: January through November issues, $50 in U.S., payable in advance. Canada $75 per year. All other countries $100 per year. Single copy $7, except July issue, $25. Periodicals postage paid at Indianapolis, Indiana, and additional mailing ofﬁces. Postmaster: Send address changes to Paint & Decorating Retailer, P.O. Box 16709, St. Louis, MO 63105-1209. Returns (Canada): Return undeliverable magazines to P.O. Box 2600, Mississauga, Ontario L4T 0A8. PM# 41450540. Copyright © North American Hardware and Paint Association, 2022.

Bob Cutter

President & CEO

Dan Tratensek

Chief Operating Ofﬁcer

David Gowan

Chief Financial Ofﬁcer & Executive Vice President, Business Services

Scott Wright

Executive Director, Advanced Retail Education Programs

Whitney Daulton Executive Director of Innovation & Engagement

NHPA BOARD OF DIRECTORS

CHAIRMAN OF THE BOARD

Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina

EXECUTIVE VICE CHAIRMAN

Craig Bond, Tommy’s Paint Pot, Eugene, Oregon

DIRECTORS

Alesia Anderson, Handy Ace Hardware, Tucker, Georgia

Jay Donnelly, Flanagan Paint & Supply, Ellisville, Missouri

Ned Green, Weiders Paint & Hardware, Rochester, New York

Scott Jerousek, Farm and Home Hardware, Wellington, Ohio

Ryan Ringer, Gold Beach Lumber Yard Inc., Gold Beach, Oregon

Jackie Sacks, Round Top Mercantile Co., Round Top, Texas

SECRETARY-TREASURER

Bob Cutter, NHPA President & CEO

NHPA CANADA

Michael McLarney, +1 416-489-3396, mike@hardlines.ca 330 Bay Street, Suite 1400 Toronto, ON, Canada M5H 2S8

CIRCULATION, SUBSCRIPTION & LIST RENTAL INQUIRIES

CIRCULATION DIRECTOR

Richard Jarrett, 314-432-7511, Fax: 314-432-7665

NHPA EXECUTIVE STAFF

NEWS, PRODUCTS & TRENDS

Get the Latest

Updates

Scan this QR code or visit PDRmag.com/november to see these stories and more resources for your operation.

Allied Flooring and Paint has two locations in Massachusetts and recently purchased the cabinet store next door to one of their locations to expand their offerings.

Facing the Future

Knowing what’s next for your business can be daunting. Experts and retailers share insights into the different business transition paths they have taken and offer best practices for other retailers along the same journey.

Necessary Docs

Discover the five legal and financial documents you should have on hand at all times, whether you are actively planning for succession or it’s still in the distant future.

Extra Helping Hand

The North American Hardware and Paint Association (NHPA) offers comprehensive consulting services to help you successfully transition your operation.

The Right Price

Buy and sell on NHPA’s Retail Marketplace, plus receive valuation services to make sure your operation is priced right when selling.

ADDITIONAL RESOURCES

TRAINING

Merchandising Insights

NHPA has worked with industry-leading retailers to develop Foundations of Merchandising Management

Live!, a two-day, educational experience that will take place on-site at the 2023 National Hardware Show in Las Vegas.

PODCAST

A Boost in Business

In this episode, Dan Tratensek and Gary Pittsford discuss how the surge in sales during the pandemic impacted business valuations, planning for retirement and more.

Scan the QR code or visit the website below to listen.

YourNHPA.org/podcasts

A Perfect Match

Discover best practices for offering stain matching services to bring in new customers and differentiate your operation from the competition.

Think Paint. Think Corona.

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For the next paint job, big or small, think Corona.

How to Reach Dan

Dan Tratensek dant@YourNHPA.org

Must-Attend Events for 2023

In the past, I’ve talked about the importance of looking beyond the four walls of your business for insights and inspiration. Even with my constant prodding, I’m sure you might be left saying, “I’m with you, Dan, but how do I start broadening my business view?”

Next year you will have several fantastic opportunities to learn from your peers, explore the latest in products and trends and perhaps go a bit outside your comfort zone.

For starters, begin the new year off right by booking your ticket to Las Vegas to attend the National Hardware Show (nationalhardwareshow.com), which will be held from Jan. 31 to Feb. 2.

Not only is the National Hardware Show (NHS) a great place to see new products, meet with other retailers and take advantage of great educational opportunities, this year it is being held concurrently with the NAHB International Builders Show and the NKBA’s Kitchen & Bath Industry Show. So, it’s like getting to go to three events in one trip.

The North American Hardware and Paint Association (NHPA) has been a huge advocate for NHS for decades, and we couldn’t be more excited for what the show has in store for guests in 2023.

As in the past, NHPA will have a big presence at NHS. In 2023, not only will we be conducting many of our most popular programs like our Retailers’ Choice Awards, but we are also debuting our live Foundations of Merchandising Management Live! program.

“Next year you will have several fantastic opportunities to learn from your peers, explore the latest in products and trends and perhaps go a but outside your comfort zone.”

This program is focused on helping retailers learn more about the fundamentals of merchandising, vendor relationships, assortment planning and more. The live classes will take place during the first two days of the show, and attendees will have the unique opportunity to learn from industry experts while also getting to experience NHS firsthand. For more information about how to participate in this one-of-a-kind experience, turn to Page 10

While a trip to NHS will help you get your year of broadening your horizons off to a great start, about six months later, you’ll have another opportunity to keep this momentum going.

You’ve probably heard us talk about 2023 NHPA Independents Conference, scheduled for Aug.1-3 in Dallas, but I am strongly encouraging you to mark this must-attend event on your calendars now. During this two-day event, we will be showcasing the latest in industry trends and shining the spotlight on how real-world retailers are using the latest in technology to drive their operations.

But this conference isn’t just about tech. You will also learn from the industry’s Top Guns, be encouraged by the next generation of industry leaders and talk to the entire spectrum of retailers from across the home improvement landscape.

Keep watching this magazine and our newsletters for more information about this event, including some special speaker announcements coming soon.

In the meantime, if you are committed to taking your business to the next level, finding ways to differentiate your operation and making it a successful 2023, you can’t go wrong with putting the National Hardware Show and 2023 NHPA Independents Conference on your schedule.

Dan M. Tratensek Chief Operating Officer & Publisher

OUTREACH

Share Your Stories

Send your merchandising tips, event recaps, employee morale boosters and other stories to editorial@YourNHPA.org

OPERATIONS

Backing Other Businesses

Anderson Paint & Decorating Promotes Local Companies

The only independent paint store in the small town of Anderson, South Carolina, Anderson Paint & Decorating strives to provide a high level of customer service and stock the products its customers need. As part of a close-knit community, owners Daryl and Charity Campbell understand the importance of supporting other local businesses. Daryl says when an area business purchases paint and supplies for a project, he asks them if he can feature the business on the store’s Facebook page.

“We appreciate all of our customers because we know there are a lot of options out there to

purchase paint. We’re thankful every day that our customers choose us, and we try to return that favor, even in our personal lives,” Daryl says. “It’s a small way to support and promote each other and get everybody’s name out there.”

The Campbell’s 13-year-old son Schroeder has grown up in the business and is often featured in the Facebook posts about other local companies.

“He’s our pride and joy, and we love having him involved in the business,” Daryl says. “Our customers love him too. They come in and want to see the pictures of Schroeder, and they ask how he is. He’s our little celebrity.”

Schroeder Campbell has grown up in his parent’s business, Anderson Paint & Decorating, and is often featured on the store’s Facebook page promoting local businesses.

Catalina Paints Gives Away a Pickup

One lucky Catalina Paints customer drove away from the company’s latest promotion a big winner, taking home a 2022 Chevy Colorado.

Catalina Paints, which operates 16 stores in southern California, hosted the raffle and gave away the pickup during a store event at the Canoga Park location. The company also raffled off five $1,000 Catalina Paints gift cards as part of the event, and attendees enjoyed food, live music and 10% off their in-store purchases that day, says president David Cohn.

“We wanted to create excitement in the marketplace and say thank you to our present and future customers,” Cohn says. “The event was very well attended, and all the participants were excited. We plan on doing a giveaway next year and may choose something other than a truck to keep it fresh.”

Sharing Pieces of History

When customers shop Summit Paint, which has locations in Akron and Barberton, Ohio, they get a glimpse into the history of the paint industry. Old paint cans and other memorabilia line the tops of displays throughout the store.

Company president Nelson Roder says he put up a few old paint cans in the store to start, and contractors and other customers have brought in others to add to the collection. The oldest can is from the 1920s, which Roder’s wife found in an antique store, and still has paint in it.

“The old paint cans are a nice touch to the store and a fun way to see how paint cans have evolved through the years,” Roder says.

One Catalina Paints customer was the lucky winner of a 2022 Chevy Colorado during the company’s latest promotion.

Sharing a piece of industry history, old paint cans and paint memorabilia line the walls at the Barberton, Ohio, location of Summit Paint Center

EVENTS Register Today!

Improve your merchandising and assortment planning skills and strategies by attending the Foundations of Mechandising Management Live! Visit YourNHPA.org/foundationslive

EVENTS

Upgrade Your Merchandising Strategies

FOUNDATIONS OF MERCHANDISING MANAGEMENT LIVE! AT NHS

How can you stay on top of the latest merchandising tactics and best practices for the home improvement industry? NHPA has worked with industry-leading retailers to develop Foundations of Merchandising Management Live!, a two-day, educational experience that will take place on-site at the 2023 National Hardware Show (NHS) in Las Vegas on Jan. 31-Feb. 1, 2023.

The event, exclusively sponsored by NHS, is designed to help both new and experienced personnel responsible for managing merchandising functions at their stores. They will benefit from expert-led course sessions, breakout workshop sessions, networking opportunities and ROI-driven assignments to take back to their stores.

Recent supply chain and inventory management challenges have forced retailers to look at their merchandising management and assortment planning strategies in different ways. The execution of the strategies and tactics learned during this one-of-a-kind event will produce optimal performance of inventory and retail floor space, enhance store appearance and fulfill the retail experience for the customer, consistent with the retailer’s brand.

The program is targeted for buyer and merchant development, as well as higher-level store operations for retailers of different sizes and product focus. It is designed to accelerate the learning curve for all aspects of merchandising management.

COURSE SESSIONS

• Visual Merchandising Standards and Techniques

• Promotional Space Management

• Resets and Remodels

• Assortment Planning and Category Management

• Vendor Relations

• Merchandising Integration With Marketing

• Pricing Strategies and Management

• In-Store Technology and Design Elements

WHAT YOU GET

• Eight in-person course sessions presented by industry experts

• Breakout workshop sessions with your peers

• Guided show floor tours led by former retailers

• Networking opportunities with retailers, instructors and vendors, including the Foundations of Merchandising Management Live! evening reception

• ROI-driven follow-up assignments and a capstone assignment to take back to stores

• A final video call with feedback on the course assignments

• A certificate in merchandising upon completion of the course sessions, post-session assignments and a wrap-up video call

• Continental breakfast and lunch each day

EDUCATION

Explore Our Education Platform

Visit YourNHPA.org/academy for more information on NHPA’s educational offerings.

Did You Listen to These Episodes?

Subscribe and listen to podcasts at YourNHPA.org/podcasts

“Look at your culture, and then think about what your community has in terms of populations that might not be getting jobs, and see if there is something you can do.”

“Don’t be afraid to compete with anybody. Independent paint dealers are as competitive now as ever. I think independent retailers are making a resurgence.”

“The home improvement industry really is a family. No matter where you go across the country or across the world, there is something special about it.”

Schaefer Discusses “Recovery Hardware” and Community EPISODE 69

NHPA’s Dan Tratensek and Renee Changnon have a conversation with Gina Schaefer, founder and CEO of A Few Cool Hardware Stores, a chain of 12 hardware stores.

TRAINING

Spectrum Paint President Talks Expansion EPISODE 70

NHPA staffers Renee Changnon and Melanie Moul have a conversation with Travis Detter, president of Spectrum Paint Co., which he co-founded in 1986.

Refresh Your Merchandising Skills

NHPA Tours the International Hardware Show EPISODE 72

Come along as NHPA associate editor Lindsey Thompson recaps her visit to the 2022 Eisenwarenmesse International Hardware Fair, held in Cologne, Germany.

Visit YourNHPA.org/membership to learn more about Premier Membership courses.

In this issue of Paint & Decorating Retailer, you’ll see examples of some creative ways retailers around the country are merchandising their stores. Effective merchandising is one of the critical operational tasks you have as a retailer; it’s the key to optimizing inventory performance and driving profitability. Every employee will benefit from having an understanding of the foundational principles of effective merchandising. They are on the front lines of helping customers find what they need and keeping displays clean, organized and easy to shop. Give your employees a refresher on what it takes to create effective merchandising with NHPA’s Basic Training in

Merchandising course. Ten modules walk learners through the fundamentals of merchandising, including why it’s important to a business, design principles of different types of merchandising and basic housekeeping that will keep the salesfloor looking good all of the time.

The Basic Training in Merchandising course is available to NHPA Premier Members. Visit YourNHPA.org/membership to learn more. You can also find quick and easy ways to refresh your employees’ merchandising skills with a variety of Trainer’s Toolbox lessons focused on the topic. Find them at YourNHPA.org/merchandising.

Gina Schaefer A Few Cool Hardware Stores

Travis Detter Spectrum Paint Company

Lindsey Thompson NHPA

PRODUCT NEWS

OUTREACH

Retailer Recommendations

Send an email to editorial@YourNHPA.org your customers love and why they are such a hit in your business.

DETAIL PAINT BRUSH

ZIBRA | enjoyzibra.com

Zibra’s Fan Brush was designed to paint different molding shapes with speed and fluidity. The length of the bristles are optimized with a tapered design to hug unique shapes and crevices.

EXTERIOR PAINT

BENJAMIN MOORE | benjaminmoore.com

AURA® Exterior is an ultra-premium, 100% acrylic exterior latex paint that extends the painting season with low-temperature application down to 35 F (1.6 C). Proprietary Color Lock® Technology delivers unparalleled color depth, fade resistance and reduced chalking. Its new acrylic resin provides UV- and fade-resistance, excellent film formation and superior gloss retention.

GENERAL PURPOSE ADHESIVE RESIN

MASTER® BUILDERS SOLUTIONS | master-builders-solutions.com

MasterEmaco ADH 502 is a general purpose two-component non-sag epoxy for cap seal adhesive and repair applications. Its non-sag property is ideal for bonding most materials and overhead and vertical repairs using a standard caulking gun. It is low-odor, solvent-free and moisture insensitive and cures hard in three hours. It is acceptable for use in USDA-inspected facilities and UL-certified for drinking water systems.

Wallsauce has six new wallpaper murals with jungle themes to bring the tropics into homes. They are available in a choice of three wallpaper styles, including classic and premium paste-the-wall and peel-and-stick material. Each mural is supplied pre-cut in even-width panels, making installation simple.

Visit YourNHPA.org/subscribe to join the mailing list for the Paint & Decorating Retailer Hot Products & Trends newsletter.

Aqua Coat’s water based White Cabinet Grain Filler is an easy to apply white gel, developed to fill the pores and grains of older oak wood cabinet doors and drawers before you prime and paint. The Grain Filler both seals the grains and pores of the wood which minimizes the absorption of the primer and paint, resulting in a glass smooth finish. NonFlammable, Non-combustible, Low Odor, Fast Drying, Easy to Apply, Water Clean Up, Environmentally Friendly. www.aquacoat.com MORE PRODUCTS Be In the Know

SATIN BRASS FINISH

BALDWIN HARDWARE baldwinhardware.com

A new finish takes the Baldwin® Prestige Torrey Pines collection to a whole new level. Polished to smooth perfection, this transitional design evokes luxury in any space. The Baldwin Prestige Satin Brass finish has a lifetime limited warranty.

WINDOW SHADES

SPRINGS WINDOW FASHIONS

graberblinds.com

Graber’s expanded Natural Shades collection includes new refined fabrics handwoven from sustainable materials. These durable fabrics feature finer textures and colors that bring out the unique asymmetric patterning of natural materials such as jute, bamboo and grasses. The collection lends an earthy element to every aesthetic and adds subtle imperfections and warmth to a space for a down-to-earth design. Natural Shades are available with a range of lift control options—including cordless and motorized—as well as customizable light filtering options like room darkening. For wide windows and patio doors, they can accommodate cordless, single shade widths up to 96 inches.

Grain Filler Aqua Coat

Foundations of Merchandising Management Live!

January 31-February 1, 2023

2023 National Hardware Show, Las Vegas

Join us for a two-day educational event for new and experienced staff responsible for managing merchandising at their operations.

NHPA worked with industry-leading retailers to develop this new program to provide attendees with the strategies and skills to successfully improve and manage their merchandising and assortment planning.

Sponsored by and held on-site at the National Hardware Show, Foundations of Merchandising Management Live! combines classroom learning from industry experts and hands-on learning on the loor at the National Hardware Show.

COURSE SESSIONS

• Visual Merchandising Standards and Techniques

• Promotional Space Management

• Resets and Remodels

• Assortment Planning and Category Management

• Vendor Relations

• Merchandising Integration With Marketing

• Pricing Strategies and Management

• In-store Technology and Design Elements

GROWTH GOALS

Allied Paint, Flooring and Design owners Jorge Morgado and Mario Tedeschi purchased a neighboring cabinet business to add to their operation’s offerings and grow their business.

NEXT CHAPTER

3 Business Transition Strategies to Explore

BY LINDSEY THOMPSON

Whether planned or unexpected, every business changes hands at some point, and most make a transition several times in the life of the operation. According to the PwC 2021 Family Business Survey , 50% of family businesses expect to increase the diversification of their business holdings in the next five years. While 96% of those businesses expect to grow, only 56% say there is

family alignment on the direction the company should pursue and what growth looks like.

Whether you are looking to exit the industry or dive in deeper, on the following pages, gain insights on business transition strategies from Gary Pittsford, chief valuation officer for Creative Planning. Plus, see the paths three retailers took for business transition to learn best practices for writing your next chapter.

OPERATIONS

Lessons in Flexibility

Paint retailer Chris Cummings had to pivot from his original succession plan and shares the lessons he learned. Learn more at PDRmag.com/succession-pivot

Pass Down to Family

According to the 2020 U.S. Census, there are 73 million baby boomers in the country and by 2030, all baby boomers will have reached retirement age. In the next decade, home improvement operations run by baby boomers will see significant turnover, and one path they can embrace is handing the business to a family member. This is the route Jack and Pam Stevenson of Stevenson’s Ace Hardware in Crawfordsville, Indiana, took last year when they sold the business to their son, Skylar Stevenson. The Stevensons were working on a three-year transition plan with Pittsford’s consulting company, but the timeline accelerated when the building the Stevensons leased went up for sale.

“An investor was looking seriously at buying the building, so I knew I either had to buy it myself or risk not knowing the future of the business,” Skylar says. “I worked closely with my banker at Live Oak Bank, and he advised me to not only buy the building but the business as well.”

Skylar chose a stock purchase of the business. The deal was closed in 95 days, much faster than the three-year plan the Stevensons had anticipated. Skylar says his parents assisted him with the financing to help the contract come together.

For the Stevensons, being transparent and open was key to the transition going smoothly.

“The more you can keep everyone informed that might someday be possibly involved or have a financial stake, even if it’s an unspoken stake at the time, the easier and smoother the process will be,” Skylar says.

Skylar also suggests clearly communicating with your customers about the transition process. The Stevensons used a local marketing company, which developed messaging the store used to communicate the transition. “Pass the Torch” communications were sent to customers through email, in-store signage and on social media.

“Even with all the messaging we did, there was still some confusion as to when my parents would actually step down from the store, so I think the more precise and clear you can be with customers, the better,” Skylar says.

Skylar says his wholesaler and the North American Hardware and Paint Association (NHPA) were also instrumental in the transition process. During the transition, Skylar was participating in NHPA’s Retail Management Certification Program, which was helpful in preparing him for ownership.

“Ace made it a smooth transition from my parents to myself,” Skylar says. “And all of my classmates in the NHPA program were really encouraging, checking in with me to see how the process was going.”

(Photo on left) Skylar Stevenson (right) took over ownership of Stevenson’s Ace Hardware from his parents through a stock option purchase. (Photo on right) During the transition, Skylar received encouragement from fellow NHPA students.

While the Stevenson’s transition worked out despite the tight timeline, Gary Pittsford, chief valuation officer for Creative Planning, recommends having an exit or transition plan in place three to five years before the owner plans on retiring. Making this plan early also protects the business in case of the unexpected death or disability of the owner.

Planning shouldn’t stop with the owners either. When the next generation comes into a leadership role, they should be thinking about their own succession plan, Pittsford says.

“Young retailers may not know who they will sell their business to in 20 years, but from age 40 to 60 they should be thinking about the future and managing their business to make it financially strong,” Pittsford says. “If retailers watch the financial side of their business, their succession plan will be easier to implement when they are ready to sell.”

One way to remain strong financially is to think outside the business. Pittsford says he has seen many business owners take any profits from the business and put them right back into the operation, which is a good business practice. But he also advises that some of those profits go toward investments outside the business, such as an IRA or 401(k), the stock market, real estate or other assets.

“So many retailers take the money they make and buy more inventory or a truck or forklift or whatever they need for the company. When they go to sell, all of their assets are tied up in the business,” he says. “When they want to sell, the owner has to get the highest dollar they can for the business in order to have enough money to live on in retirement. I recommend spending 10 to 20 years before retirement investing in the business, but also putting money in other areas so you’re diversified.”

Sell the Operation

With the boom in business in 2020 and 2021, many retailers are flush with cash and are looking to expand their retail footprints through acquisitions of existing home improvement businesses, which is great news for retailers wanting to sell.

Jorge Morgado and Mario Tedeschi, the owners of Allied Flooring, Paint and Design, went the acquisition route to grow their business and in the process kept another family-owned business running. The operation acquired Budget Cabinet Sales, a locally owned business adjacent to one of its stores in Agawam, Massachusetts. Allied Flooring, Paint and Design also has a location in East Longmeadow, Massachusetts.

“Each of our locations offers different types of products and services, allowing us to better serve our customers’ wide variety of needs,” Morgado says. “We always strive to be a one-stop shop for our customers.”

TO THE NEXT LEVEL

Allied Paint, Flooring and Design owners Jorge Morgado and Mario Tedeschi are making physical improvements to the business they acquired but will retain many of the same products and level of service the previous owners offered customers.

Staying true to that business model, the acquisition of Budget Cabinet Sales provided Allied customers with another layer of products and services. Morgado says he saw other retailers diving into kitchens and thought it would be a good fit for their company as well.

“Because Mario is friends with the Lloyd family, who owned Budget Cabinet, we knew they would be selling the business. We started communicating with them about buying about nine months before the acquisition,” Morgado says. “We are always thinking of the one-stop shop environment, and this deal gives our customers at Agawam the ability to buy paint, flooring and cabinets in the same parking lot.”

As you walk through buying another business, Morgado recommends preparing for the emotional side of the deal. He says it’s helpful to acknowledge and honor the history of the company you’re buying. While their way of doing business may not align with your own, you can still respectfully appreciate what they’ve built and are willing to sell to you.

“Lean into the emotion, because the more you acknowledge what they built and the history around it, the more comfortable negotiations will be,” Morgado says. “We appreciated the model the Lloyd family built and assured them we would continue that tradition of exceptional customer service.”

How an ESOP Works

How an ESOP

Discover the basic tenents of an employee stock ownership program.

Set Up a Trust

The owners set up a trust in the form of a government-qualified pension plan to hold the shares of the company on behalf of the employees. All employees have an account with the trust.

Pay Down the Loan

The business pays down the loan using its profits, and once the loan is paid off, those profits are shared with all employees by increasing the ESOP. The ESOP is essentially a long-term retirement plan, where the ESOP holds the shares with an evaluation done by an independent appraiser each year to determine value.

Take Out a Loan

If the ESOP doesn’t have enough cash to purchase all of the owner’s shares, the trust takes out a loan to purchase, with the value of the shares determined by an independent appraisal. An owner can sell all their shares upfront or a certain percentage of shares at a time.

Shares Allocated to Employees

The ESOP shares are allocated to the eligible employees based on several factors, such as years of employment and wages, with each ESOP differing in both employee eligibility and the stock allocation method. When an employee leaves the company, their shares are cashed out, similar to a retirement plan.

While Morgado says they were able to negotiate the company’s value with the Lloyds directly, Pittsford highly recommends going through a formal price evaluation. He says he has many owners who have decided that selling the business is the best option for their operation, but they have no idea what the business is worth. This is where valuation services are important to receive an accurate assessment of your company’s worth. It’s important to rely on consultants and companies that are well-versed in the home improvement industry who can offer a more accurate value based on nationwide averages and walk you through the selling process. NHPA recently launched valuation services as part of its Retail Marketplace platform. Retailers who are interested in selling can work with Pittsford to get an accurate valuation of their business and list their businesses for sale on the marketplace, which is advertised to retailers throughout the industry who are ready to buy.

“Sellers can take the valuation report to the buyers, and it really helps in the negotiation process,” Pittsford says. “Valuations are also useful for other needs, including determining value for probate if the owner dies or when owners get a divorce.”

Learn more about the NHPA Retail Marketplace and valuation services at YourNHPA.org/marketplace.

Form an ESOP

Another option is an employee stock ownership plan (ESOP), which is a tax-qualified retirement plan regulated by the federal government where the only investments are in that company’s stock. So, if the company does well and the value of its stock increases, the value of the ESOP and each employee’s share of the ESOP increases.

While forming an ESOP isn’t a good fit for all retailers because of the initial financial investment needed and the yearly costs, for larger companies, it can be another option that benefits their employees.

“In an ESOP, every employee in the company has a small piece of that retirement plan,” Pittsford says. “It’s really important that every employee works hard to make the company more valuable or more profitable, because if the company is more profitable, everybody in the company benefits.”

A Few Cool Hardware Stores became employee-owned in 2021 through the development of an ESOP. Gina Schaefer and her husband Marc Friedman started the company in 2003 with one store, and they have since grown the operation to 12 locations in the greater Washington, D.C., area.

Schaefer says she started thinking about their exit strategy early thanks to the recommendations of friends, and she began looking into an ESOP in year 16 of the business.

“Small business owners don’t often spend enough time thinking about what their exit strategy is and how many options we actually have,” Schaefer says. “We love our neighborhoods and our team, and we wanted to make sure that we were creating an ongoing legacy for the neighborhood with our hardware stores.”

The couple does not have kids, so that type of succession was not an option for them, and the business had grown to the point where they didn’t feel they had one person on their team who could buy it. There were no other Ace Hardware retailers

looking to buy in their area, and Schaefer and Friedman also didn’t want to sell to private equity.

“The recent political and social strife of the last few years is felt acutely in our area. It was important to us to advocate for and build up our teammates. We felt selling to a private firm would slow the progress we had made growing our culture,” Schaefer says. “So when we laid all of the options on the table, we really liked the idea of an ESOP.”

Once they decided to go the ESOP route, Schaefer reached out to fellow retailers who also have ESOPs and utilized the resources of the Employee Ownership Exchange Network, which works to expand employee ownership across the U.S. through a network of nonprofit state centers for employee ownership.

For an owner, an ESOP is a way to leave the business in the hands of people who helped build it, while unlocking tax benefits for the owner and the business. An ESOP also benefits the employees, giving them a vested interest in the company beyond just a job.

Pittsford says it is important for the owners to convey these benefits to employees frequently and clearly.

“Owners need to let employees know when they work hard, whether they are on the salesfloor, working in admin or out in the lumberyard, the value in the ESOP goes up and their financial benefit does too,” Pittsford says.

Schaefer says those two benefits were incentives for her and Friedman as well.

“Our ESOP consultant said that we would have had to sell the business for 20% more in the open market because of the tax benefits we get from forming an ESOP,” she says.

In August 2022, the ESOP celebrated its first anniversary, and the employees saw firsthand the benefits it provides them, Schaefer says. At her company, an employee is eligible to join the ESOP after one year and 1,000 hours worked.

“We had 165 teammates who automatically qualified when we announced the ESOP in 2021,” she says. “My co-owners received their first ESOP statements a year later and saw how their hard work paid off. We offer them a way to build wealth that they may not have access to at another job.”

“Owners need to let employees know when they work hard, whether they are on the salesfloor, working in admin or out in the lumberyard, the value in the ESOP goes up and their financial benefit does too.”

—Gary Pittsford, Creative Planning

BUSINESS FOR SALE

Northwest Farm & Home Supply Co.

Location: Lemmon, SD

Gross Revenue: $3.21 million

The main building is a total 27,213 sq. ft. of retail and warehouse space on 4 acres. The main bldg. was constructed in 1994 with additions constructed in 2002 & 2004. Single story with 22’ clear height in 11,459 sq. ft. of lumber warehouse, three grade level doors and two dock height doors.

BUSINESS FOR SALE

Central Vermont Paint, Flooring, and Decorating Business

Location: Vermont

Gross Revenue: $2.82 million

Price: $1.1 million

Full-service decorating store providing flooring, paint, window treatments, kitchen/bathroom remodeling, cabinetry product offerings, design assistance, specialized service, and professional installation.

SEEKING BUSINESSES

The Aubuchon Company

BUSINESS FOR SALE

Home Improvement Supply Store

Location: Missouri

Gross Revenue: $1.04 million

This historic home improvement and hardware store is a staple of its community and operates from its headquarters in Missouri. The Company is a long-standing retailer and installer of consumer and commercial improvement products.

BUSINESS FOR SALE

Hoosick True Value

Location: Hoosick Falls, New York

Gross Revenue: $1.26 million

Price: $1.875 million

This opportunity offers a turnkey sale of a general hardware operation located in northeastern Rensselaer Co., New York. The business serves five towns, southwestern Bennington Co., Vermont, and 25 miles east of Troy, New York.

For our next acquisition, we are looking for:

• Single-store and multi-store hardware operations

• Located in northeast and southeast United States Store size of 5,000-30,000 ft2

• At least $3 million in average store sales

BUSINESS FOR SALE

Private Business

Location: Alabama

Gross Revenue: $2.21 million

Price: $649,000

SEEKING BUSINESSES Bolster Hardware

We are looking for:

• Geography agnostic

• With or without real estate Store revenues of $1.5M+

• We prefer to honor the family name and heritage in the local community by not changing the name

• We prefer to keep all employees as part of the acquisition

Captivating Colors

Show off this year’s Color of the Year with a unique display. Learn more at PDRmag.com/capturing-attention

Mighty Merchandising

Displays to Inspire Your Store Layouts

BY CARLY FRODERMAN

Merchandising plays a critical role in the overall success of a business. It improves profitability by generating more margin dollars, controls costs by improving the productivity of the salesfloor and employees and increases sales by making a store appealing to customers. Strategic merchandising makes shopping easier for customers and gives them reasons

to come back often and spend more money, building customer loyalty and creating repeat shoppers.

Paint & Decorating Retailer spoke with Daniel Engels, manager of Gray’s Paint Stores’ Redwood City location, about his merchandising strategy. Then, starting on Page 26, review photos from businesses across the country to see examples of excellent merchandising to inspire your own setups.

Visual Ventures

Learn five ways to improve your visual merchandising at PDRmag.com/first-impressions

A New Beginning

Gray’s Paint Stores was founded in Redwood City, California, in 1984 by Robert Gray, and the business has since grown to four locations. Engels, grandson of Gray, grew up in the stores and returned to the business full time in 2015.

In 2020 when the pandemic hit, Gray began spending less time in the store and Engels took on more responsibility. This included handling fire marshall visits.

“I don’t know if my grandfather was best friends with the fire marshall or what, but when the marshall visited while I was in charge, he told me the oil-based paints and stains needed to be on metal shelves when we had been keeping them on steel framed shelves with wooden inserts,” Engels says.

This experience prompted Engels to take on a reset project to ensure the store was following protocols, but also make the store easier to shop. Engels grouped interior paints together and exterior paints together and moved contractor paint to the rear of the store where there was more room for storage.

“We also moved our premium products, mostly paints, to the front of the store to increase their visibility,” Engels says. “Creating more visual contact gives customers a chance to familiarize themselves with the products and makes a difference. We saw increased interest and sales of these products.”

The process of moving the premium products around in the 4,000-square-foot store took over two months from planning to execution, and most of the moving of product was done after hours, Engels says.

“Having product all over the floor can’t happen during store hours because it’s not safe for our customers,” Engels says. “I was lucky to have our outside salesman, Barrett Johnson, help me with the product movement; he really sped the process up.”

The store utilizes planograms for some product displays, such as plasters, and most of its signage highlights specific brands the store carries, Engels says.

When it comes to store displays, how eye-catching they are is important, Engels says.

5 Best Practices

From Merchandising Expert Tony Corsberg

Tony Corsberg has over 45 years of experience in home improvement retailing, was vice president of merchandising and marketing at Friedman’s Home Improvement and is a founding member of the North American Hardware and Paint Association’s (NHPA) marketing and merchandising roundtable. More recently, he has been active in the creation of NHPA’s new program, Foundations of Merchandising Management. Paint & Decorating Retailer spoke with Corsberg about the five P’s of merchandising

Product

Item selection and product assortment are critical in a well-merchandised store. Without the right products and the right mix of products, the rest of the merchandising will struggle.

Price

Maintaining pricing accuracy and ensuring the price is acceptable to the customers in your market is vital to customer satisfaction. Ignoring this element of merchandising can make the customer less likely to follow through with a purchase.

Presentation

The visual merchandising piece of retail, from store layout and planogramming to defined merchandising standards that are appealing to the customer, is a critical step. The more effective the product presentation, the more likely the customer makes the purchase.

Promotion

Whether it’s the use of store promotional spaces like endcaps and stack outs, in-store signage, print ads, digital marketing or any other effective promotional activities, marketing will greatly improve a retailer’s merchandising performance.

People

Investing in training and ensuring your sales associates are knowledgeable about products and projects is a key differentiator.

Home & Paint Supply in St. George, Utah, creatively uses mannequins in its

At Summit Paint, which has locations in Akron and Barberton, Ohio, customers can see how different stains look on different types of wood to pick the best product for their projects.

Sarasota Paint Co. location in Bradenton, Florida, utilizes large eyecatching signage to grab customers’ attention and direct them to important merchandise.

Spectrum Paint’s Claremore, Oklahoma, location uses stack displays on endcaps (left) and in the middle of the aisle (right) to bring attention to particular products and increase sales.

“It’s also important for displays to help customers visualize what the product can accomplish and what the outcome of a project could be,” Engels says. “Providing this visualization makes a tremendous difference in sales.”

Carrying on Tradition

One unique offering the Redwood City location provides is 2-oz. paint sample jars customers can purchase to test colors before buying a larger quantity.

“We have the largest collection of sample paints in the area, and it’s only 85% or 90% of Benjamin Moore’s colors,” Engels says. “We spend a couple of hours daily filling them. Mondays, Tuesdays and Wednesdays are always big fill-up days because we have to recover from the weekend.”

A third-party company used to make the samples over 20 years ago, but when they stopped, the store’s employees started making the samples themselves because they were so popular with their customers.

A Program to Improve Your Merchandising

NHPA’s Foundations of Merchandising Management Live! is a two-day educational program sponsored by and held on-site at the 2023 National HardwareShow.Thisin-person,interactiveexperiencewillcombineclassroom education from industry experts and hands-on learning on the show floor. NHPA worked with industry-leading retailers to develop this new program to provide attendees with the necessary strategies and skills to successfully improve and manage their merchandising and assortment planning. Learn more on Page 12 or visit YourNHPA.org/foundationslive

Key Takeaways

•Visual merchandising standards and techniques

•Promotional space management

•Resets and remodels

•Assortment planning and category management

•Vendor relations

•Merchandising integration with marketing

•Pricing strategies and management

•In-store technology and design elements

RESOURCES

Doing Displays Right

Discover four best practices for merchandising paint tools and accessories at PDRmag.com/merchandising-paint

SMALLER SIZES

“It allows our customers to get six 2-oz. paint samples for the price of two quart-sized samples,” Engels says. “We’re often shocked at how popular this size is, and our offering is unique because paint companies can’t make them in small enough increments accurately.”

The sample jars are located just to the right of the color section and are neatly organized on floor-to-ceiling shelves spanning across one side of an aisle.

“We can match any color brought to us,” Engels says. “So if a competitor is out of sample sizes and a customer brings the color to us, we can provide that sample.”

It can be difficult to merchandise for both DIYers and pros in a store. Gray’s Paint Stores’ Redwood City location merchandises boxes of products mostly used by contractors on

the bottom rows of shelves and single items on the rows above, Engels says.

While the pandemic and ongoing supply chain issues have created difficulties, a large part of successful merchandising is having the product to sell.

“You need to have it to sell it,” Engels says. “Making sure your shelves are always full, if you can keep a back stock, is important. Customers should never have to reach more than two inches into the shelf to get a product.”

When it comes to what products to merchandise, authenticity is key.

“Retailers should merchandise products that they believe in,” Engels says. “Having confidence in the product instills the same confidence in customers, which translates to increased sales.”

Gray’s Paint Stores’ Redwood City location has 2-oz. paint sample jars for customers.

Up Your Giving Ante

Discover five ways to do more with your community donations at PDRmag.com/more-donations

Giving GOALS

How to Give Back to the Communities You Serve

BY CARLY FRODERMAN

Known for providing an extra layer of customer service, independent home improvement retailers have always been in the business of helping customers. For generations, independent home improvement retailers have taken this idea a step further and found ways to give back to their communities and the customers they

serve in personal and impressive ways. From donating to local nonprofit organizations to starting a summer camp for kids in the community, there are many levels of giving back, each impactful in its own way. Whether you already give back regularly or are looking for new ways to contribute, read on to discover the different ways retailers are supporting their communities.

GIVE AND RECEIVE

Airdrie Paint and Blinds owner Pete Lewis (middle) has served as board chair for the Airdrie Children’s Festival since 2017.

Partnering in Christmas Giving

Norberg Paints in Sioux Falls, South Dakota, showed its generosity last December, joining 10 other local businesses to sponsor the first annual Grouchmas. During the event, attendees visited Fallsville, a village with 10 different houses, each sponsored by a local business to support a specific local charity. Each house was decorated with an oversized stocking filled with items community members and businesses donated for that charity. The stockings were auctioned off with the proceeds and the items inside the stocking donated to the respective charity.

“It was an honor to partner with other local businesses to put on this event and create the opportunity for the community to join in and support and fill the stockings of these groups,” says co-owner Stuart Norberg.

Sharing a Love for Learning

In 2017, after a conversation with his oldest daughter, Pete Lewis, owner of Airdrie Paint and Blinds, was inspired to create more opportunities for his children and other kids to learn and grow. He realized that his city of Airdrie, Alberta, was one of the largest cities in Canada without a major children’s festival. As a small business owner in the city, he figured he could do something to change that fact, and in 2018, the first annual Airdrie Children’s Festival was held.

“We wanted our festival to be different and fully inclusive, so it had to be free for everyone to attend with no on-site marketing,” Lewis says. “We wanted kids to come and just be able to be kids. Everything we planned for the festival was viewed through a lens of creating curiosity, inspiring creativity or removing fear.”

The festival includes an entertainment stage featuring local and national performers, Inspiration Stations with hands-on learning and a Children’s Village that provides a safe place to play. The festival also includes workshops where kids can learn skills from knitting to changing a tire to creative writing. In the first two years, over 12,000 kids attended the festival. Both the 2020 and 2021 festivals were canceled because of the pandemic, but the event returned in 2022. Lewis says serving as board chair for the festival is a labor of love, but has allowed him to interact with his community in ways he never imagined.

2 3

1 & 3: After a conversation with his oldest daughter, Airdrie Paint and Blinds owner Pete Lewis was inspired to create more opportunities for his children and other kids to learn and grow, so he became involved in the Airdrie Children’s Festival.

2: Norberg Paints in Sioux Falls, South Dakota, sponsored its community’s first annual Grouchmas.

Helping Hands

10 Ways to Give Back to Your Community

1. Host local food trucks in your parking lot.

2. Sell locally made products.

3. Organize a food drive.

4. Sponsor a scholarship.

5. Hold a car show in your parking lot.

6. Host a farmer’s market or craft fair in your parking lot.

7. Sponsor a local sports team.

8. Hold free DIY classes, product seminars or how-to’s at your store.

9. Provide free coffee.

10. Organize a coat exchange.

“The festival is a solid relationship builder. For all the time it takes away from working in our store, the rewards come back to us tenfold,” he says. “It’s the best marketing we could do.”

Giving Generously to the Community

When it comes to supporting the community, the residents of Abilene, Texas, come out in full force all year-round, but especially show their generosity during Abilene Gives. This one-day event in May, sponsored by the Community Foundation of Abilene, brings together nonprofits from around the city and provides an easy way to give. In 2021, the event raised over $1.9 million in 24 hours. Chris Cummings, owner of The Paint Center in Abilene, participates in the event by donating money and promoting the event on the store’s Facebook page. The store is also a faithful yearlong supporter of Court Appointed Special Advocates (CASA), a national association that supports and promotes court-appointed advocates for abused or neglected children.

“CASA helps kids who have been taken out of terrible living situations and tries to give them a better life,”

Cummings says. “I think it’s important to not only donate ourselves during Abilene Gives, but let others know about these amazing nonprofit organizations that are really making a difference in our community.”

Sharing Samples

When the team at Brackin Paint & Supply in Dothan, Alabama, was looking for additional ways to connect with customers, they decided to offer a custom magazine every quarter. The store’s buying group offers the magazine program, which publishes custom magazines for independent paint retailers who give them away in their stores, says manager Tyler Brackin, who owns the business with his father. The magazine includes tips and tricks for painting, color inspiration and the latest decorating and home decor trends. Issues are free for customers and include a coupon for a complimentary paint sample that customers can redeem in the store.

“We started offering the magazine at the end of 2021 and have had great response so far from our customers,” Brackin says.

Caring for the Community

See how to build customer loyalty through community connections at PDRmag.com/building-loyalty

Colorful Future

Nicole Durant didn’t let her lack of industry or business experience hinder her when she purchased Exeter Paint in Exeter, New Hampshire, when she was in her early 20s. Durant took the time and effort to educate herself in all things paint and decorating, and she still feels strongly about education and experience. So, when a seventh grade student asked to shadow her at her paint store for a school project, Durant jumped at the opportunity to share her world with the next generation.

Fredy, who attends a local middle school, chose Exeter Paint to shadow because he loves the paint store. Durant says there wasn’t much he didn’t love about his day at the paint store.

General manager Crystal Christian had the pleasure of showing Fredy the ropes, and she says he helped with all aspects of the business, from mixing paint to visiting job sites to driving the forklift.

“Driving the forklift and helping on the different job sites was my favorite part of the shadow day,” Fredy says. “I might even like to work at the paint store when I’m old enough.”

YOU LIKE TO KNOW ABOUT INTERIOR WOOD CARE?

INTERIOR WOOD CARE BEST PRACTICES

BY CARLY FRODERMAN

While it makes up a small portion of most paint operations, the interior wood care category offers opportunities to increase sales and provide customers a more comprehensive selection of products for their project needs.

In 1896, Andren’s Paint Co. opened in Duluth, Minnesota. Chris Ellian started at the business in 2016, and in 2020, he and his wife purchased the business from the previous owner. Paint & Decorating Retailer spoke with Ellian about best practices and for selling tips in the interior wood care category.

Stain Sales

Discover how stain-matching services can boost sales at PDRmag.com/stain-matching.

Better Products, Better Processes, Better Results

Ellian only stocks high-quality products that provide results he can stand behind. Employees also recommend the best process possible, not the cheapest or the easiest, Ellian says.

“I let customers know that I tell them what they need to hear, not necessarily what they want to hear,” he says. “When we give them the best advice, we rarely have any issues down the line with project results, and everyone is happier in the long run.”

Showing Off What You Offer

All the wood surfaces inside of Andren’s Paint Co. are coated in a product sold in the store, Ellian says, allowing the business to creatively demonstrate the products it sells.

“We wanted to make sure that if somebody is noticing a wood surface in the store, we can tell them what it is,” Ellian says. “It’s nice to utilize our products in a way that highlights the beauty of our store and our passion for our products.”

Technology Woes

Ellian expounds on how technology has impacted his customers and customer service.

The Problem

“We’ve been seeing more young people doing wood projects than ever before, and their instinct is to research it online, which often does not provide the best solutions or processes. It’s much harder to change somebody’s mind than it is to instruct them the first time, and when customers consult the internet first, it makes things more difficult than they need to be.”

The Advice

“Don’t tell the customers they’re wrong; instead, suggest more effective or less troublesome ways of achieving the same goals. Talking them through the process while still tying in some of the advice they were getting from the internet, if possible, can set them on the correct path without too much contention.”

OPERATIONS

Money in Movers

Discover why new movers make good customers at PDRmag.com/new-movers

HOMEBUYERS IN ON HOMING

CATERING TO LOCAL HOMEBUYERS

IN SPITE OF OTHER economic uncertainties, the housing market has stayed competitive. In this hot market, learning what types of houses are being purchased, who is buying them and their motivation for purchasing allows retailers to target new customers and better understand and serve their current ones.

What are they purchasing?

19% of homebuyers purchased multifamily homes to take care of aging parents. 29%

34% of homebuyers were single females, the second largest buying group after married couples.

With over 61% of homebuyers purchasing houses over 20 years old, many of these homes will require renovations or future repairs Educate yourself on what types of homes are prominent in your area and stock the right mix of products for home repair, like specialty plumbing and electrical, that meet the needs of those homeowners.

Source: 2022 Home Buyers and Sellers Generational Trends Report, National Association

Realtors® Research Group. of all home buyers were first-time buyers in 2021, an increase from 31% in 2020.

Industry Events

Captivating Customers

Learn how merchandising can shape customer perceptions of your operation at PDRmag.com/merchandising-customers

DYNAMIC DISPLAYS

MERCHANDISING TRICKS TO ENHANCE YOUR OPERATION

UTILIZING A FEW simple merchandising tips can give your operation an edge over competitors. Discover three merchandising tricks you can implement in your business to boost sales and encourage repeat customers.

ENDCAPS

Put bulkier items on the bottom with smaller items above to keep the display balanced and appealing to your customers’ eyes.

DUMP BINS

Overflow these bins with products to show you have ample stock, which enhances your price image since consumers generally equate large quantities with low prices.