Doubling up

f, ne rHese cuys nutty as a fruit.CLcake.. . or crczy like a fox? Just as a mounting number of lumberyards are going out of business, Dale Hardware is adding one. What gives?

It's what happens if you listen to your customers when they tell you what they want. "It's one of the things we had in the back of our minds," says Garth Smith, president of Dale Hardware in Fremont, a small East Bay community in California. "They'd come in and say, 'It would be nice if we could pick up (plywood, 2x4s, fill in the blank) while we're here"-onestop shopping, and Garth is not a guy to say no to business-"but we never had the means, or the space, to do it."

He's talking about the enterprise launched in 1953 by his father, a salesman of hard goods who thought he could transfer his know-how and be his own boss-after all, he knew wholesale, he knew distributors, he knew store operations, so could store ownership be that hard? He launched a

5,000-sq. ft. operation with a staff numbering fewer than the fingers on one hand and did just fine. So well, in fact, that the facility was enlarged eight times over the ensuing years, as the business moved locations three times (but always in the same block) when the necessity for expansion beckoned.

The latest and greatest expansion, under Garth's watch. doubles-doubles!-the size of the operation to nearly 100,000 sq. ft., adding new room to grow its garden center, retail operation, and add a covered, drivethrough lumberyard. And the neatest part of the venture is that it was accomplished using $8 million from a federal stimulation bond program.

Still, why now?

"Sales had been stagnant. And for years we'd been bulging at the seams. We felt there were various commodities we could do a good job on, but we had no space. So we thought, 'Hey! Not a bad time to make a move!' We based it on three things: (1) money was cheap; (2), we had the pick of the litter when it comes to hiring contractors; and (3) when the economy turned around, we'd be ready."

And, talk about timing: "Coincidentally, we had the traditional financing in place, but then the Feds actually came to us. Shortly before we got started, we were contacted by city and county people, alerting us that a grant award was available 'for exactly what you're doing."' The government bond initiative was aimed to create jobs and grow businesses, and that's exactly how it's panning out.

"We were mandated to increase employees, and we've added l8 so far and are still at it," Garth happily reports-"mostly people with retail experience, but not necessarily in our industry. For instance, our new garden center now stocks live plants-new for us-so we hired two people with that special expertise, and for the lumberyard, a new manager, who's in the process of hiring and training his staff and selecting the inventory." The new lumberyard will service additions and renovations -"that's what's selling, not huge apartment buildings."

At Dale, with its staff of I15, Garrh explains, "employees may specialize in a particular department, but are encouraged to learn as much about every product as possible. The key to all retail," he believes, "is hiring people who really like to be around people-who are comfortable talking to somebody, not uncomfortable if they don't know all the answers-instead, 'Let's go find out.' People who like people make a shopper's experience pleasant," he's convinced.

And just who shops here? Commercial/industrial, contractors, walk-in warriors: all of the above, he says, and all are served by the same philosophy, "the one we hang our hat on, that we always pride ourselves on service. On our expertise, like hardware stores have done since their inception in the 1800s, and we've always stayed the course. We offer expertise in the ancillary parts and pieces of a major purchase. We pick up the pieces, whether we sell you a 49cent widget or a $490 package. Sure, we've had competitors like Home Depot, Lowe's and Orchard Supply near us since the '80s, but they haven't hurt our business."

Still, the product lines are targeted more for the pros than walk-ins, he does admit, but he finds the operation picks up retail business this way, too. As he sees it, "What we stock for the pros lends itself to impress the d-i-yer. He sees this and thinks, 'This guy really knows his business!' whether he needs that particular item or not."

The commercial/industrial thrust of the operation-fully 5O% of Dale's revenue-merits its own division, called DCIS-Dale Commercial & Industrial Services-spawned 20 years ago, with its separate outside sales staff dedicated to calling on municipality functions, such as the school board and water board. It's like a turnkey operation, monitored by Dale, which stocks those clients' maintenance inventory at jobsites or facilities "so they don't have to send maintenance crews out for their standard needs, but can turn to their in-house stash," Garth explains. "They can phone in an order and we'll have it pulled and ready for pick-up or shipped. It saves them money, but-more important-it saves them time. If your $2O-an-hour maintenance guy is idle for a couple of hours, that's costly. Plus, this way they can have a little more control over him. It's been a very good business for us. The past three or four years have been a little soft when budgets really tightened, but you can always try to sell more-pick up adjacent pieces of the pie."

Meanwhile, the company finds the best way to attract new contractors to its list is by word of mouth. "It's a very difficult market to advertise to, but once we become aware of them, we treat them well: in-house charge accounts, visits to jobsites or shops." Custom builders are pretty much extinct in Fremont because precious little land remains unbuilt. And in this economy, Garth finds, "those that called themselves builders back in 2005 are now remodelers.

&llding.ftodu<ts.om because big projects aren't feeding the family; and remodelers are now at the fix-it end of the business. Those who had a very narrow niche have had to expand and open the door to other pieces."

Same goes for Dale. With the recent major expansion, the outfit has added live plants to the offerings its Garden Center carries, such as fertilizer, sprinklers, and tools. The retail floor expansion has allowed it to add 25000 SKUs since June 2011, increasing both breadth and depth of lines-"a much larger fastener selection; paints by Benjamin Moore in addition to Ace; and showers, bathtubs, vanities and toilets."

Dale already had a vibrant kitchen and bath showroom, called Water Concepts, operating in a separate building on the same parking lot since the '80s, offering "nicely displayed, upscale products-more decorative, the higher end." Now, with the main store's expansion, it's added the "good" to Water Concept's "better, best," to capture everyman's remodeling project.

Speaking of projects, check out the company's spiffy, active website (www.dale-hardware.com), monitored by its marketing department. "I don't believe in e-commerce for us, so why a website?" Garth beats me to the question. "Why should people visit it if they can't buy there? So we talked about what would entice them, kicked it around" and came up with-well, see for yourself: how-to info, top projects to undertake, new and/or top-selling products, personal chats with department gurus. Let's just call it a "top of mind" endeavor.

And when folks are ready to plunk down the plastic, they'll find Dale conveniently open Saturdavs and Sundavs. too-"vou can't be in business in California without that," Garth allows. While sales had been "pretty flat" for a while, since the newly remodeled store opened in October 2011, "business has been up very, very substantially," he reports. "We're attracting more people, and a broader customer base. We're very happy."

Carla Waldemar cwaldemar@ comcast.net