Pacific Northwest chain revitalized

UCCESS in the home center business is undeniably a team effort. But at the 7l-store Ernst Home & Nursery chain, based in Seattle, Wa., one man has certainly made a difference.

When Hal Smith took over as president in March 1986, he faced the task of revitalizing a lackluster business with long falling sales and high rising losses. Ernst's new owners, brothers Julius and Eddie Trump of New York, realized they had to get the company going again and summoned Smith. He responded by vowing to turn Ernst into the nation's premier home improvement company.

His many changes have brought about a clear turnaround. Sales increases began showing with Smith's first quarter in oflice. Now, after two years of losing money, the chain has just finished two years of profitability, the first marked by an approximately 190/o rise in sales.

Although he is only 36, Smith did start at the bottom. He just didn't spend very much time there. He began his career as a teenager, assisting at the lumberyard which his father managed. After graduating cum laude from Notre Dame University, Smith returned to the yard at $2 an hour. Along the way, he earned his MBA from UCLA.

His aggressive attitude and fast traveling reputation soon had him heading the Homeowners Do-ItYourself Centers chain. Gardena. Ca. He later became president and chief executive officer of Builders Emporium, Irvine, Ca. While there, Smith was recruited by the Trumps for the Ernst challenge.

Although the 89-year-old company had a strong name in the marketplace, a stable of experienced employees, and superb store locations, Smith also recognized its flaws, especially in the areas of image and pricing. He just didn't see it going anywhere. It wasn't being marketed and, simply, it had become boring, he said.

Smith saw Ernst as a pale imitation of its drab warehouse competitors. In its place, he envisioned a revamped specialty store for do-ityourselfers.

Ernst had been through three presidents in as many years. Smith's arrival would mark an immediate change in this and other areas. He quickly restyled the look of Ernst's advertising, giving it a light tone and gently parodying his warehouse competitors in Ernst's advertising. He brought in new merchandise to offer recognizable values and build up under-represented departments. Smith phased out unpopular product lines and irrelevant items, especially the huge sporting goods and "drugstore products" sections. He bottomed out its pricing system. And bold, new graphics solved the problem of trying to find merchandise and salespeople.

Story at a Glance

New president gives new life to lackluster Ernst chain ... moves include aiming for the female shopper, revamped marketing, new merchandise, new management, sales incentives, and lower prices.

Smith hired a crack top management team, bringing in four new lead oflicers from Handyman, Lanoga Corp., W.R. Grace and Mr. Goodbuys. He also began a vigorous sales incentive program to encourage and reward his salespeople. As he explains, "I'm a big believer in the fact that it is a team effort. Everyone should share in that success."

The president has also tried to turn shopping at an Ernst store into a more pleasurable experience. While his competitors clamor to transform their stores into warehouses, Smith is aiming to attract the female shopper, making his locations brighter, more exciting, and directed toward fashion, bath and kitchen remodeling, and materials for the entire home.

Each store will feature how-to clinics, service areas, and an installation program for those who would rather not do-it-themselves.

By the time current renovations are completed in August, Smith will concentrate on expanding the chain. Planned are five new stores in Washington, followed by the opening of from l0 to l5 stores each year thereafter, moving into new markets in the West.

Staying idle has proven unhealthy, so Smith has given Ernst the energy and forward motion it needs. "It's going to cost a lot of money, but it's money well invested," he said.