The View From The Top

NTHE highly oompetitive retail r selling field, especially in a metropolitan area like Los Angehq doing what the competition is doing just isn't going to make it. It takes something more.

Recognizing that being difierent could be the thing that would give them their competitive edge, Sunset Industries' Sunset Builders Supply and Home Center has set out to do just that.

Recently opening their l2th store in Calif. (see accornpanying pictures) this marketing strategy of something "different" is really being brought to full bloom.

"What we are doing," says Harold Kitay, president of Sunset Industries, "are the things the competition i$n't doing. Through our advertising, for example, we are telling Mr. Public that we are the problem solvers for their d.i.y problems. We have the experts; we can help them with the difficulties they encounter.

"We don't sub. scribe to the Build. ers Emporium. Handyman - Angels approach, we want to be the customer's source for solutions ari well as materials.t'

This sense of a marketing difrer. ence from his oonr etition emerges in other areas of discussions with Kitay, particularly @ncern. i.g product and product mix. Though he feels his competitors have too broad an inventory, he is quick to admit that Sunset has much the same problem.

Story qt o Gfonce

Continuing grou/th and profitability have keynoted Sunset Industries move to concentrate on d-i-y consumer selling . what has happened and why is discussed in this exclusive interview with comlany president Harold Kitay.

Kitay feels that selling products such as spark plugs, motor oil, pho. nograph records and even soft goods have no place in a store that styles itself a home or home improvement center.

Sunset plans to stick to things that pertain to the home, and leave the exotics to the others. It's not that they haven't tried the non-home related items. "We put pet foods in two of our stores on a trial basis, and are they bombing," relates Kitayo ruefully.

"We plan to go into greater depth in the things we are already in. For example, shop tools for home use and perhaps unfinished furniture." They aim for a 7O/30 balance in retail to builder sales.

Sunset Industries' long range goals call for oonstruction and/or acquisition of 50-60 stores in the thirteen western states in the next seven years. And the goal refers to minimums, not maximum number of stores.

The company plans to continue use of its brightn four-color catalog as an in-store sales tool and for customer reference, even though their mail order business through the catalog has diminished "to nothing" and is "a buggy whip remnant."

Next month Sunset is opening a new Sunset Home Improvement Center in Torrance, Ca., and plans to open two of their Handy Andy stores in Arizona early next year, one in Tucson and one in Nogales, just across from tlre Mexican border.

Sunset, which expects to gross $25 million this year through their 14 stores, still had just one location back in 1961, 15 years after Kitay's father bought it for $12,0m. It had a total gross inoome in1961of $865,000. Despite the gnowth that the firm had rnade, by 1965 they had an agonizing

(Turn to p. 10)

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Sunset Industries

(Continued lrom Page B) reappraisal, decided that they were "running a buggy whip business," and started to make a number oI changes. At that time, the comPany was t'like an auto parts store, You know, with the oounter, one cash registe4 that kind of thing," relates Kitay. "We were a specialty building supply house for windows, doors, ply' wood and some hardware, but not inventoried in-depth. We got busy and cut expenses, changed the product mix and began to acquire some manufacturing operations as well as our retail Handy Andy stores in Arizona."

Sunset's ventures into manu{acturing were not very successful. They discovered that it was just not possible to turn around marginal manu{acturing operations the way they had the retail operations they had acquired. Throughout the last few years they have been divesting themselves of those that aren't an integral part of their retail oriented operation.

Several weeks ago it was formally announced that Sierracin Corp. had agreed to purchase the assets of Aga' lite-Bronson, a Sunset division that makes architectural glass products and did $3.5 million last year. No price was revealed for the sale.

The divestiture completes a planned program to re-direct Sunset's efforts from manufacturing into the retail arena.

"Until July, 1971, we still were not in the retail do-it-yourself business," notes Kitay with an edge o{ {rustration in his voice, "We were still an enlarged version o{ that wholesale auto supply store." The decision last year to make the complete change to d-i-y was followed by a number of moves that have made the Sunset operations, and especially the newer ones, as d-i-y as it is possible to be in the present state of the art.

A first change was in the hours of business. The hours, a 2:30 p.m. Saturday close, for example, were not compatible with the consumers' desires to shop weekends, nights and most any other time. The average hours now are Monday-W'ednesday, 8 a.m.-5 p.m.; Thursday-Friday, 8 a.m.-8 p.m.; Saturday, B a.m.-6 p.m.;

EXCEPIt0llAttY well-done new Sunset store, Arcadia, Ca., has (1) clean displays, ouhtandins signing for easy-to-find depts. (2) Ron Mari' an'i. siorimsr., wbrks with Frank Falasco on lighting sectlon gondola. (3) Cutting glass for customer is asst. mgr. Vince Cordio, moving

Sunday, l0 a.m.-3 p.m.

Another sigaificant change in the stores was the addition of NCR cash registers that provide information on each department daily. They have used EDP for payroll, receivables and payables since 1963.

Sunset does not foresee the daY when they will have their inventory on EDP as they estimate the outPut would not be commensurate with the cost. As it iq, they get the daily sales information so they can zero in on a problem area and take physical inventory and observe the area. The biggest inventory problem, they note, is maintaining an optimum balance between over/under stock.

Despite a desire to keep inventory depth within reasonable bounds in relation to customer demands, they are not deaf to unusual customer requests. Their store in Sierra Vista, Arizona, about 85 miles southwest of Tucson, carries horseshoes and shoe nails, hardly your average d-i-y fast on a busy Sat. a.m. 6) Cashiers use llCR machines, accept Mastercharge, B. of A. and house accts. (5) wide central aisle feeds kaffic in, then to various depts. 6) and 0) Garden, housewares, appliances illustrate wide variety of home-oriented merchandise sold. item. Kitay explains that ranchers requested it and buy enough to make it feasible to carry it in that store's inventory.

Plans call for store size to be between 20,000 and 25,000 sq. ft. The new Arcadia store has 20,000 sq. ft. of floor space and 70,000 sq. ft. for parking. The normal floor/parking ratio they shoot for is three ft. of parking for every store ft. The new showroom is actually 17,000 sq. ft., with 3.000 sq. ft. devoted to backup.

Sunset has a team concept, KitaY says, but observes, as many others have, that things don't always work out that way. "W'e're in a peoPle game and we try and motivate our people to work towards a greater return for our stockholders by providing {ringe benefits and more money through a profit sharing plan." Oddly, money is not always the successful motivator it has been in the past, However you do it, he stresses, "You've got to motivate people."