Issuu

Serving Hardware, Home Center & Building Material Retailers

Turning the Page

Retailers Discuss Their Exit Strategies 44 ‘Dear Me’: Retailers’ Letters to Their Younger Selves 58 Which Gardening Niche Will Be Your Next Best Seller? 68

VOLUME 211 • ISSUE 2 • AUGUST 2016 • HARDWARERETAILING.COM

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Turning the Page

Retailers Discuss Their Exit Strategies

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Serving Hardware, Home Center & Building Material Retailers

Turning the Page

Retailers Discuss Their Exit Strategies 44 ‘Dear Me’: Retailers’ Letters to Their Younger Selves 58 Which Gardening Niche Will Be Your Next Best Seller? 68

VOLUME 211 • ISSUE 2 • AUGUST 2016 • HARDWARERETAILING.COM

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ig in to the September issue for details on how you can use smart technologies for business facets in areas such as security, marketing and time management to make your store a true smart store. Data security, both for massive big boxes and small independent retailers, is an increasingly common issue, as thieves

steal customer credit card numbers, contact information and more. Next month, you will also want to learn from an expert how to prevent, prepare for and recover from data breaches. We will also feature insights into smart home trends and technologies so you can understand what consumers are buying and how you can sell it.

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Headquarters Staff

PUBLISHING

NRHA MISSION

The North American Retail Hardware Association’s (NRHA) mission is to help independent hardware stores, home centers and lumberyards, regardless of wholesale affiliation, become better and more profitable retailers. FEATURED BOARD MEMBER

PUBLISHER, VICE PRESIDENT OF PUBLISHING Dan Tratensek

COMMUNICATIONS

136 N. Delaware St. #200, Indianapolis, Indiana 46204 Phone: 317-275-9400 Fax: 317-275-9403 Email: nrha@nrha.org Website: www.nrha.org HEADQUARTERS STAFF PRESIDENT AND CEO Bill Lee

DIRECTOR OF COMMUNICATIONS Whitney Daulton ASSOCIATE EDITOR Liz Lichtenberger ASSISTANT EDITOR Renee Changnon ASSISTANT EDITOR Kate Klein LEAD GRAPHIC DESIGNER Lynnea Chom

CONTROLLER David Gowan

GRAPHIC DESIGNER Graeme Haase

EDUCATION

WEB DEVELOPER Kevin Trehan

DIRECTOR OF MEMBER SERVICES Allison DeWitt, 317-275-9414, adewitt@nrha.org TRAINING MANAGER Jesse Carleton, 317-275-9418, jcarleton@nrha.org

PRODUCTION SERVICES PRODUCTION MANAGER Nancy A. Vondersaar

MEMBER SERVICES AND COMMUNICATIONS COORDINATOR Hilary Welter, 317-275-9435, hwelter@nrha.org

SALES AND PRODUCTION ASSISTANT Freda Creech

MEMBER SERVICES AND MEETING COORDINATOR Kamille Stokes, 317-275-9435, kstokes@nrha.org

CIRCULATION

RETAIL LEADERSHIP INSTITUTE

CIRCULATION DIRECTOR Richard Jarrett

EXECUTIVE DIRECTOR-RETAIL LEADERSHIP INSTITUTE Scott Wright, 317-275-9430, swright@nrha.org

CIRCULATION/SUBSCRIPTION/ LIST RENTAL INQUIRIES

DIRECTOR OF RETAIL OUTREACH Tom Marcum, 317-275-9430, tmarcum@nrha.org

PHONE 314-432-7511 FAX 314-432-7665

NRHA VENDOR PARTNER VENDOR INTEGRATION MANAGER Marci Taschler, 317-275-9421, mtaschler@nrha.org

SALES VICE PRESIDENT OF SALES Bob Cutter

DIRECTOR

Will Aubuchon, CEO of Aubuchon Hardware, headquartered in Westminster, Massachusetts, was elected to the NRHA board in 2014. He was introduced to his family-owned and -operated company as a child and became a full-time employee in 1999. WHAT HOBBIES OR ACTIVITIES DO YOU ENJOY OUTSIDE OF WORK? I’ve started practicing hot yoga, and I have a goal to learn how to fly powered paragliders in the next year or so. Perhaps I can combine the two down the road and create a new trend: flying yoga!

NATIONAL SALES MANAGER Lowell Huffman

NRHA BOARD OF DIRECTORS

MIDWEST REGION MANAGER Tony Sarantakis, 404 Afton Circle, Barrington, Ill. 60010; 847-934-9515, Fax: 847-934-2494, tonytakis@aol.com

CHAIRMAN OF THE BOARD James Cabirac, Kief Hardware, Cut Off, Louisiana

STATE AND REGIONAL ASSOCIATIONS

WEST REGION MANAGER Chris Miller, 506 Citadel Circle, Westmont, Ill. 60559; 630-234-3272, Fax: 847-934-2494, cmiller7288@gmail.com

EXECUTIVE VICE CHAIRMAN Megan Menzer, Newton’s True Value, Cherryvale, Kansas

MICHIGAN RETAIL HARDWARE ASSOCIATION Patrick Harrington, 4414 S. Pennsylvania Ave., Lansing, MI 48910; 517-394-1710; FAX 517-394-6754

NORTHEST REGION MANAGER Brian Ziff, 17 Cutler Knoll, Watertown, Conn. 06795; 203-509-0125, Fax: 317-275-9406, bziff@nrha.org

FIRST VICE CHAIRMAN T.J. Comstock, Northwest Hardware, LLC, Billings, Montana

MIDWEST HARDWARE ASSOCIATION John Haka, 2301 Country Club Drive, Suite A, P.O. Box 8033, Stevens Point, WI 54481-8033; 715-341-7100; 800-888-1817; FAX 715-341-4080

GREAT LAKES REGION MANAGER 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9400, Fax: 317-275-9403, sales@nrha.org

SECOND VICE CHAIRMAN Greg Schlecht, Greg’s True Value, St. Francis, Wisconsin

SOUTHEAST REGION MANAGER Nick O’Connor, 136 N. Delaware St. #200, Indianapolis, Ind. 46204; 317-275-9409, Fax: 317-275-9403, noconnor@nrha.org

THIRD VICE CHAIRMAN Daniel Harris, Palos Ace Hardware, Palos Heights, Illinois; Lemont Ace Hardware, Lemont, Illinois

NRHA CANADA NRHA CANADA Michael McLarney, 360 Dupont St., Toronto, Ontario, Canada M5R 1V9; 416-489-3396, mike@hardlines.ca

PACIFIC NORTHWEST REGION Ronald F. Moore, 3857 Wolverine NE, Suite 20, Salem, or 97305 (UPS,FedEx); P.O. Box 17819, Salem or 97305 (U.S. Mail); 503-375-9024; FAX 503-375-7980; Alaska, Idaho, Ore., Wash. SOUTHWESTERN REGION Jeff Flora, 638 W. 39th St., Kansas City, MO 64111; P.O. Box 419264, Kansas City, MO 64141; 816-561-5323; FAX 816-561-1249; Ark., Kan., La., Mo., Neb., N.M., Texas

CANADA John Magner, 500 Queens Quay W., #101 W. Toronto, ON M5V 3K8; 416-598-0101 x220, Fax: 416-598-9191, jmagner@yorkmedia.net

Hardware Retailing (ISSN0889-2989) is published monthly by the North American Retail Hardware Association, 136 N. Delaware St. #200, Indianapolis, Ind. 46204. Subscription rates: Hardware Retailing (Payable in advance): U.S. & possessions $50.00 year. Canada $75.00 year. All other countries $100.00 year. (Air Mail $60.00 year additional). Single copy $7.00. The Annual Report issue can be purchased for $30.00. Periodical postage paid at Indianapolis, Indiana, and additional mailing offices. POSTMASTER: Send address changes to Hardware Retailing, P.O. Box 16709, St. Louis, MO 63105-1209. All editorial contents copyrighted 2016 by the North American Retail Hardware Association. No editorial may be reproduced without prior permission of the publisher. REPRINTS: Contact the Editorial Department at 317-275-9400 for price quotations. Printed in the USA.

WILL AUBUCHON

HARDWARE RETAILING | August 2016

DIRECTOR Will Aubuchon, Aubuchon Hardware, Westminster, Massachusetts DIRECTOR Jared Smith, Jared’s Ace Hardware, Bishopville, South Carolina DIRECTOR David Dishke, Grand River Home Hardware, Caledonia, Ontario DIRECTOR Steve Fusek, Fusek’s True Value, Indianapolis SECRETARY-TREASURER Bill Lee, NRHA President and CEO IMMEDIATE PAST CHAIRMAN Adam Busscher, Picton Home Hardware, Picton, Ontario

Growing our business for the next generation of our family.

Petersburg, Indiana !

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Contents AUGUST 2016 | VOLUME 211 | ISSUE 2

58 LEADERSHIP

Letters to Our Younger Selves What would you tell your younger self? Store owners, a manager and a retired retailer reflect on their careers and offer advice to the less experienced young professionals they used to be.

I wish e... ld I wou

OPERATIONS

Selling and 44 Succession: Exiting a Business We spoke directly with retailers who have successfully sold their businesses and transitioned to the next generation of leadership. Learn what they did to make this process go smoothly.

This is what I’ve learned..

e n o e v i g d l u o c If I e of advice piec uld be. . i t wo Departments 06 . . . . . . . . . . . . . . . . . On the Web 08 . . . . . . . . . Independent Thinking 10 . . . . . . . .Taking Care of Business 14 . . . . . . . . . . . . . . . . NRHA News 22 . . . . . . . . . . . . . . . . . . . . . Trends 24 . . . . . . . . . . . . . . . New Products 36 . . . . . . . . . . . . . . . . . . Checkouts 82 . . . . . . . . . Newsmakers/Calendar 86 . . . . . . . . . . . . . . . . . . Last Word

On the Cover

68 CATEGORY SPOTLIGHT Lawn and Garden

Learn about unique niches, such as DIY ponds and hydroponics, so you can enrich your category offering, make your store the go-to spot for finding unusual products and boost sales.

HARDWARE RETAILING | August 2016

Here’s a growing project trend to consider selling: fairy gardens. Take a step-by-step look at creating a whimsical masterpiece on Page 86, and think through the products you could sell to fairy garden enthusiasts.

Bill Klingbeil, owner of Klingbeil Lumber Co. in Wisconsin, has worked for several years with his son, Pete, to plan the company’s transition so everyone will be prepared when Bill starts the next chapter of his career: retirement . NRHA photo by Lynnea Chom.

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On the Web “Calling on retailers in nearly every state taught us that customer service is the most important element for success in hardware retailing.” -Bob Vereen, former senior vice president of NRHA

SUCCESSION PLANNING

REFLECTIONS

Perspectives on Succession, Part 2

“Dear Me” Letters from NRHA

We bring you the second part of our succession planning package in this month’s feature, “Stepping Out.” The tools listed below can help both buyers and sellers through the succession process:

In “Dear Me,” you’ll read letters written by retailers to their younger selves in which they reflect on their careers. To give a different perspective, four NRHA staff members have also written thoughtful letters to their younger selves. Visit TheRedT.com/nrha-letters to read career reflections from NRHA’s CEO, executive director of the Retail Leadership Institute, an editor and a former senior vice president.

Timeline: Go to TheRedT.com/ succession-timeline to find an interactive timeline complete with tips and resources.

Quiz: Thinking about selling your business? Get some advice by taking a quiz at TheRedT.com/selling-quiz.

Expert Insight: Learn from financial expert Gary Pittsford how to determine the value of your business and its assets at TheRedT.com/valuation-qa.

CATEGORY TRENDS

Lawn & Garden Niches In this month’s Category Spotlight, we dig into some trendy niches in lawn and garden. For one category, we went a little deeper. Visit TheRedT.com/diy-ponds to download a guide with 10 helpful tips for installing and maintaining a pond that you can share with your staff and your customers.

This series of quick lessons on topics such as selling skills, merchandising, product knowledge and operations is geared toward all levels of employees. Use them at your next meeting! Visit nrha.org/freetraining to download this month’s lessons, listed below.

1 Video: Basic Grill Maintenance 2 Video: FAQs About Grills

SOCIAL MEDIA LINKS

@hardwareretail facebook.com/HardwareRetailing 6

HARDWARE RETAILING | August 2016

Independent Thinking

A Vitally Important Issue

“Really nice restrooms are among the details that say how much you value your customers and your employees.

”

o, I’m 65, and for many of you who are middle-aged or older, you’ll understand when I say that I make more restroom pit stops than I used to. As time has gone on, I’ve become a lot more familiar with the vast range of available facilities across the world of retailing, restaurants, convenience stores and truck stops. During the last few months, I’ve been traveling a bit by car, visiting a few hardware stores along the way and taking a few interstate potty breaks. When you’re on the road for a while, you begin to think about strange things, and restrooms began to come to mind more and more often. That’s right, my mind went to restrooms. I’m not sure what that says about my intellectual range, but it’s just a fact. So, I’m compelled to share a few of my thoughts with you. Think back on a few of your memorable restroom experiences. On one end of the spectrum, there may be a great resort lobby or spa restroom, with beautiful marble, wood features and a wonderful, exotic scent. On the other end, there was that rundown interstate convenience store experience. The restroom was broken, dirty and disgusting. The message was loud and clear—we don’t care about our customers or our employees, and we don’t care if you ever come back. Well, during my travels, I’ve used a few of your restrooms. In your defense, there were a few standouts. But, for most of the stores I visited, it seems that you think of your restrooms as just one of those wasted expenses you’re forced to have. In some stores, you’re directed to the hidden, backroom “employee restroom.” This may be where you’ll find the mop bucket, cleaning and paper supplies stacked on improvised shelves, and everything a little beat up around the edges. And, it’s obvious—someone isn’t checking and cleaning every hour. The rest of your store is bright, clean, organized and fresh—so what happened in your restroom? You’re missing a real opportunity just waiting in your store’s restrooms. Your restrooms can put you miles above the competition. Great restrooms will win the appreciation of your customers for your thoughtfulness and will set you apart in a way that no big box will ever be able to duplicate. Really nice restrooms are among the details that say how much you value your customers and your employees. Don’t worry; nice restrooms won’t cost a fortune. They’re tiny spaces, so you can do a lot with a small investment. You already have most of the products you’ll need; you might even do most of the work yourself. Maybe you could install new ceramic floor tile and add a fresh coat of paint in a trending color. This would be a great place to showcase a nice mirror, faucet and light fixture you carry. Move the mop bucket and supplies to the back room and add a nice trash can. With a small investment you’ll create an upscale feel in your restrooms. Now the best part—tell your customers to give your beautiful new restrooms a try, because they’re the best in town. Put up a big restroom sign over the door. Invite folks to stop by any time they need a nice restroom break—no need to buy anything. You’ll get the word-of-mouth reputation as the nicest store in town. People will talk. Moms will love you for it. And we old guys will, too.

Bill Lee, President and CEO

blee@nrha.org

HARDWARE RETAILING | August 2016

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Taking Care of Business

A Rant About Venting

“If you want to go

from venting about things to actually making things better, your association is here to help.

”

was recently having lunch with a friend, and after we had both rattled off the standard pleasantries, the conversation began to take on a more intense tone. During the next 10 minutes, we unloaded on each other a steady torrent of complaints. There was no single thing that bore the brunt of our vitriol, with topics ranging from our houses to roadway construction to the state of politics. When we both managed to take a break in an attempt to lower our blood pressures, my friend uttered a refrain I’ve heard multiple times from friends, colleagues and family. “Sorry, I’m just venting.” This little comment got me to thinking. When we say, “I’m just venting,” what exactly do we mean? We’ve all surely heard this phrase from someone and likely said it ourselves. I think the concept of “venting” implies that we are unloading about life’s annoyances, with no expectation for finding a resolution. The only goal is perhaps a bit of a catharsis achieved by sharing frustrations. There is nothing wrong with the occasional “vent.” I have done it many times. Issues, however, do arise when all we do is “vent.” When there is never any action or effort to overcome the challenges that cause us so much frustration. Sure, there may be some issues that might annoy but don’t warrant action (i.e. neighbors who refuse to mow their grass more than once a month.) Other things we vent about, however, are often issues that really should be addressed, and your association is here to help. One of the cornerstones of our mission here at NRHA is to provide ALL independent home improvement retailers with a voice—and there are several ways we work to do this. First, you’ve probably received at least one of the surveys NRHA regularly sends out. These surveys are designed to gather opinions from as many members of this channel as we possibly can and use these opinions to better represent the positions of independent home improvement retailers. In the coming months, you will likely be receiving more of these surveys. Please take a moment and share your thoughts and opinions with us so we can share your thoughts with the industry. Also, NRHA is putting together an Advocacy Advisory Group to help us better understand what issues (legislative, consumer, competitive, etc.) are impacting independent home improvement retailers. We are seeking volunteers who would like to serve with this group. If you’d like to participate, email me at dant@nrha.org. Lastly, in December we will be hosting our second annual State of Independents Conference, sponsored by the National Hardware Show®. This one-day event on Dec. 8 in Chicago brings together retailers, manufacturers and distributors to learn more about issues impacting this channel. It’s a great opportunity to share your thoughts with other channel members about how they can better help your business. It is free for retailers to attend but seating is limited, so go to hardwareretailing.com/SOIC today to register. There is nothing wrong with a little afternoon rant every now and then, but if you want to go from venting about things to actually making things better, your association is here to help. And sorry, but we probably can’t help you do anything about your neighbor’s lawn.

Dan M. Tratensek, Publisher

dant@nrha.org

HARDWARE RETAILING | August 2016

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NRHA News

NRHA On the Road

o one knows more about independent retailing than a store owner. That’s why the North American Retail Hardware Association (NRHA) makes it a priority to get out and visit retailers. This summer, we’ve been to several stores in many states! Below are some photos of where we’ve been, and what and who we’ve seen. To see more photos from our trips, check out our galleries on Facebook at Facebook.com/NorthAmericanRetailHardwareAssociation.

1. NRHA’s Allison DeWitt spent a

week visiting retailers in Denver and its surrounding cities in June. One of her stops, Denver True Value, had a bicycle shop inside the store. 2. NRHA Member Services

representatives Kamille Stokes (left) and Hilary Welter (right) stop at Champaign Do it Best Hardware in Champaign, Illinois, during a day of store visits in July.

3. NRHA staffer Renee Changnon (right)

with Bridgett Barnes (left) at Ace Barnes Hardware during a two-day trip to the Ann Arbor, Michigan, area in June. 4. NRHA web developer Kevin Trehan

shoots video with NRHA board chairman James Cabirac in his store, Kief Hardware, in Cut Off, Louisiana. 5. NRHA’s Tom Marcum (left) met

4 14

HARDWARE RETAILING | August 2016

with future NRHA Retail Management Certification Program student and store manager Jon Fox (right) at Westerville Ace Hardware in Westerville, Ohio.

FAMILY FARM & HOME WILL DOUBLE ITS STORE COUNT … because they joined OUR co-op Al Fansler and his family operated a chain of 27 stores, but they had an even bigger vision for Family Farm & Home. To expand the company, Al, Tim and Bob needed a true partner. That’s why they chose the best option—True Value®.

(Left to right) Son-in-law Bob Tarrant, Al Fansler and son Tim.

FREEDOM TO RUN THEIR COMPANY THEIR WAY WITHOUT INTERFERENCE Family Farm and Home proudly shares the business results the company achieved as a member of our co-op. (Your individual results will vary.)

GROWTH

FROM 27 TO

47 STORES

DOUBLE-DIGIT PROFIT INCREASE

IN KEY CATEGORIES

IF YOU VALUE WHAT WE VALUE GIVE US A CALL AT 1-888-291-7229 TrueValueCompany.com

We understood the family’s long-term business strategy. Tim Fansler, co-president and chief marketing officer, says, “True Value demonstrated a level of expertise within our wide range of product categories that we couldn’t find anywhere else.” Today, the company operates 47 stores in three states with plans to add 5 more stores this fall. True Value offers sound business solutions and resources to ensure Family Farm and Home’s future growth and profitability. Al, Tim and Bob are more than our business partners, they’re family.

TAILORED ASSORTMENTS SUPPORTED BY

MARKET DATA

NRHA News

Retailers Share Their Expertise

ourteen retailers are improving their businesses as a result of NRHA’s Retail Management Certification Program. Students of the Spring 2016 session visited Indianapolis June 14-17 for their third and final classroom sessions. During the visit, students presented their business improvement projects, which provide a quantitative or qualitative value to their sponsoring business. While each student presented a strong and valuable project, three were deemed finalists by a panel of expert judges. Below is a summary of those projects, and how you can adopt similar practices to improve your business. For more information on the Retail Management Certification Program, visit nrharmcp.com.

INVENTORY MANAGEMENT AND CONTROL

HOW TO INCREASE STAFF KNOWLEDGE AND BASKET SIZE

Al Mattison, Northwest Regional HR and Training Manager Aubuchon Hardware, 106 locations in the New England area

Kendra Weisflock, Assistant Manager Gravenhurst Home Hardware, Gravenhurst, Ontario

The goal of Mathews’ project is to improve inventory efficiencies by reducing slow-moving inventory, filling inventory gaps and streamlining order and transfer procedures among stores and implementing standards for efficiency. In order to achieve this, she developed a multi-phase solution that includes running category reports, comparing sales reports and determining the best planogram to fit company needs, then customizing and implementing the new planogram.

“Is there a better way to address freight when it’s a received in an Aubuchon store?” With his business improvement project, Mattison answered that question. He narrowed in on three store locations and evaluated how each addresses weekly freight. He found that sorting totes and putting freight away after hours is the most efficient method. Based on his findings, Mattison created a plan to implement a company-wide policy for addressing freight most efficiently in all store locations.

Weisflock’s objective was to increase her staff’s knowledge level in order to improve customer service and increase transaction size. To do this, she created a detailed training schedule for all staff members to follow, with a plan to incentivize employees who complete the program ahead of determined deadlines. Through project implementation, Weisflock plans to foster an environment of education, staff confidence and commitment while increasing sales and average transaction size.

Apply to your store: While improving inventory accuracy can be daunting, tackling it could result in greater efficiency, reduced inventory costs and improved customer service. Use Hardware Retailing’s missed sales/out-of-stock inventory calculator and an infographic on various inventory processes to get started. Download these resources at TheRedT.com/inventory.

Apply to your store: There are many ways to go about the process of receiving and putting away freight. To determine if your current method is the most efficient, consider trying small changes like sorting totes first or putting freight away after hours. Compare the new process effectiveness with your usual routine to see if these changes increase efficiency.

Apply to your store: Trained employees are likely to sell more and increase transaction sizes. They also feel confident and are better equipped to assist customers. Training your staff doesn’t need to be a huge time commitment. For guidance on kicking off an employee training program in your store, download NRHA’s Train the Trainer at TheRedT.com/trainer.

Lauren Mathews, Communications Manager Connolly’s Do it Best Hardware, Four locations in Fort Wayne, Indiana

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HARDWARE RETAILING | August 2016

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Checkouts PROMOTIONS

Customers Stick Around For This Fun Contest

hoppers buying an armload of duct tape from Weaver’s Ace Hardware might be trying to fix something around the house, but it’s just as likely that they’re getting ready to enter the store’s popular duct tape art contest. Melissa Achenbach, marketing manager for Weaver’s, recently helped organize the store’s second duct tape art contest, and says it has generated a lot of excitement among customers. “Our first contest was in 2014. We had just purchased a large amount of duct tape at a discount and decided this would be an opportunity to do something fun for our customers,” she says. “Since then, our customers have been asking about it so much we held another contest this year.” Achenbach says the rules to the contest are simple. Creations must be at least 50-percent duct tape and

participants enter in one of two categories, depending on their ages. The entries are put on display in the store, and winners are chosen by customer vote. Between the store’s two locations, in Douglasville and Fleetwood, Pennsylvania, more than 50 customers entered the contest. The winner in each age group from each store received a $50 Weaver’s gift card, and the overall winner won a $100 gift card. Entries took many shapes, from the simple, such as a purse or wallet, to the elaborate, such as a mosaic-framed piece of artwork or a pink flamingo. “We had a great response to this contest,” she says. “Our customers really appreciate when we offer them something fun like this in the store, and it’s a fun way for our associates and the community to interact.”

Entries ranged from simple wallets to elaborate mosaics and were on display in the store during the contest. Customers voted to choose winners from each store, along with an overall winner.

Looking for creative ways to engage customers? Whether it’s promotions, merchandising, special events or unique advertising, we cover it here. Have an idea? Contact Liz Lichtenberger, llichtenberger@nrha.org, to have your story considered for publication.

HARDWARE RETAILING | August 2016

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Stop and Sell the Roses

very year, a couple of weeks before Mother’s Day, the parking lot at Olde Towne Ace Hardware in Jonesborough, Tennessee, takes on a dramatic transformation. Owners David and Vickie Sell fill the lot with a sea of roses in their Run for the Roses promotional sales event. This past spring, over the course of about six weeks, the couple sold more than 900 roses, and they plan on increasing the numbers next year. The tradition started in 2001 and has drawn customers from more than 50 miles away. The Sells stock 50 different varieties of roses, making their store a destination for rose lovers looking for unique plants as gifts or as a way to start their spring gardens. It’s also a labor of love for the Sells. In February, they start each rose bush from a bare root, or starter plants that have not yet matured into a blossom, in an off-site greenhouse. Sell says it took him about two and a half days to plant all 900 flowers. He and his wife plant each rose in their own proprietary blend of potting soil and then hand-water them every day. When the roses mature into a blossom, generally a couple of weeks before Mother’s Day, they start bringing them to the store and set them up in the parking lot. “When we first started selling the roses, we got maybe 400 or 500,” says David. “We’ve increased the numbers every year because of the response we continued to get from our customers. My wife came up with the ‘Run for the Roses’ name because we start selling close to the time of the Kentucky Derby, and around Mother’s Day.” The labor of love pays off, too, making it a profitable way to start off the spring sales. “This has become a niche we are known for, and has been a good investment for the store,” David says. Customers purchasing a rose typically purchase potting soil, pots, trellises and other add-on items. Like any successful spring event, the Run for the Roses promotion takes advance planning, which starts mid-summer. Vickie will choose the quantity and variety of roses to be ordered, and then they will pre-order bagged soils and pots. Then, in January, they start getting the greenhouse ready for the plants to arrive in February. With any event such as this one, it’s important to start planning well in advance. You’ll need to think about setting up and hosting such an event, what products you’ll need, how you’ll advertise it and more. To download our event planning guide, visit TheRedT.com/EventChecklist.

This past spring, over the course of about six weeks, the couple sold more than 900 roses, and they plan on increasing the numbers next year. 38

HARDWARE RETAILING | August 2016

Photo by Collin Brooks/Herald & Tribune, Jonesborough, Tennessee Top: David Sell (left), son Jordan and wife Vickie fill the parking lot with 50 different varieties of roses in many colors. Bottom: Sell draws customers from more than 50 miles away for the annual Run for the Roses sale.

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MERCHANDISING

Shelf Talkers Work Around the Clock

hile it’s important to provide good customer service, starting with greeting each customer personally when they first enter your store, some customers don’t need ongoing help throughout their visit. However, you can still reach out to them as they shop without being by their side—all you need is clear signage. The staff at BES Supply Store in Carlsbad, New Mexico, has mastered this technique. Clearly printed and laminated signs posted throughout their store remind customers about seasonal selections, various promotions and more. Try something similar in your store. Use signage to highlight a product and remind customers that it would be perfect for summer, or would make a great birthday gift. Call out a few of the top features of the product, or remind them of a way that product is unique. A little creative signage can go a long way toward increasing your bottom line.

The BES Supply Store staff posts signs like these throughout the store, reminding customers of events and celebrations.

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Move Over, Digital— The Chalkboard is Back

hile there’s plenty of ways to use digital signage and printed signage in a retail setting, there’s still a place for the old-fashioned chalkboard at Fresno Ag Hardware. For Ian Williams, hardware department manager and head of customer relations at the store in Fresno, California, it’s all about adding a personal touch and using a little creativity to catch customers’ attention. Every few days, Williams puts a new message on a chalkboard near the store’s entrance. The message often revolves around promotions or reminders about seasonally appropriate products. They usually incorporate some illustrations—Williams’ own handiwork. “It’s like the ‘soup of the day’ signs you might see in a boutique deli shop,” he says. “A hand-written message has that old-school feel to it that’s more personal than a flier.” While Fresno Ag Hardware has the standard printed signage one would expect to find in any modern store, Williams incorporates smaller chalkboard signs in a few departments

A simple chalkboard with information about what’s going on in the store creates a sense of urgency for the sale while adding a personal touch.

to draw attention to different categories, such as a sign advertising the “barbecue sauce of the week” near the grills. “We often have a lot of success with items we advertise on the chalkboard,” Williams says. “But just as important is that customers appreciate the fact that I spend some time to create a personal message for them. This is something that has really worked well for us.”

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HARDWARE RETAILING | August 2016

Stepping Out Retailers Talk Selling and Exiting Businesses

ou’ve heard the stories. A store owner is ready to retire or gets ill and can no longer manage his or her business, and no family member or employee is next in line to take over. Sometimes, the future of a business is suddenly in jeopardy. The questions about the future become urgent and potentially massive: Who will buy it? How much is the business worth? Can I afford to wait for an offer that gives me the money I need to retire? Will I get a good or fair price for the business I’ve been building for decades? What if I can’t find a buyer? Successful ownership transitions and business preservation don’t have to be sudden or urgent. More often than not, good planning can allow you to find the right purchaser from the outside, sell to a standout employee or train the next generation of family ownership. Even if the next-in-line owner is an obvious choice, such as a son or daughter who has wanted to work in a business since childhood, taking the time to plan ahead can smooth out the road to succession. Bill Klingbeil, owner of Klingbeil Lumber Co. in Medford, Wisconsin, began developing his plan three years before his son, Pete, started slowly buying him out.

“As soon as I realized Pete would be heir apparent—it apparent— must have been right at seven, eight years ago—I started starte a succession plan for myself,” Bill says. Independent home improvement businesses change h hands regularly, and this article shares insight from four retailers retail who have either successfully sold their businesses alrea already or are in the process of selling to next-generation owner owners. They discuss their planning processes for selling, who ttheir advisers are or were, how they identified their buyers and a what they did to ensure smooth transitions in ownershi ownership. This is the second half of a two-part series on succession planning, and follows an article in the July Ju issue of Hardware Retailing that focused on four you younger owners buying businesses. Check out last month’s st story here: TheRedT.com/succession-planning-part-1. This month’s parallel article offers the perspectives of the retailers who sold or are selling to those four new own owners. These retailers are featured in this story because tthey represent different stages of and types of succession, succession including an owner-to-manager sale, selling to an ou outside buyer and handing off a business to the next generation generat in a family.

Craig Buckalew

Bill Klingbeil

Mike Monserez

Harold Staats

EGF Hardware Hank

Klingbeil Lumber Co.

Hardware Plus

Buckalew and his son, who is buying the business from his parents this year, have been working through a five-year transition plan.

Klingbeil is gradually selling the family business to his son Pete. He plans to retire within a few years, and is increasing Pete’s responsibilities over time.

In 2008, Monserez sold his store to a trusted employee, who had worked there for several years and had learned all about the operation.

Ace Hardware of Cape Haze

HARDWARE RETAILING | August 2016

Staats took his time to find a good buyer for Ace Hardware of Cape Haze after he realized a family succession plan wouldn’t work.

Stage 1: Choosing Your Advisers • Use a CPA to get financial documents ready. • Hire an attorney familiar with business transition. • Seek advice from retailers who have experienced ownership transitions.

Stage 2: Developing a Succession Plan • Plan what you’ll do in an emergency. • Determine if you can groom a successor. • Set a timeline for when you will retire.

Stage 3: Setting Goals • Set a fair asking price. • Give yourself time to find a buyer you like. • Take steps to ensure your business’ success after you’re gone.

Stage 4: Deciding What You Can Afford • Learn how much money you need to retire. • Decide if seller financing is an option. • Identify what you’re selling.

Stage 5: Finding the Right Buyer • Consider whether a relative is a suitable buyer.

$$$

• Look for a savvy employee you trust. • Make plans with your distributor or a broker to sell to an outsider.

Stage 6: Making Your Exit • Set an exit timeline with the buyer and decide if you will stay to help with the transition. • Finalize the purchase agreement. • Congratulations! You’re retired!

August 2016 | HARDWARE RETAILING

Planning Ahead Making a succession plan is an important part of ensuring that when you leave your company— be it because you want to retire, an emergency prevents you from working or your health is declining—your business is in good hands and your retirement is funded. Harold Staats, owner of Kingsway Ace Hardware in Port Charlotte, Florida, has had to develop multiple succession plans, but planning ahead made his first business sale successful. Staats initially wanted his nephew to be his successor, but when that nephew decided to move to another state and pursue a different career, Staats still had time to come up with a new plan. He decided to sell one of his stores to an outside buyer while he could afford to take his time to do so. “We didn’t have to get out on any schedule. You need to be able to give yourself plenty of time,” Staats says. Planning ahead meant he could wait for a purchaser who could pay him what he wanted for the business, and he could also be particular about who the buyer would be, he says. He found that buyer in Jim Stoner, who purchased

Ace Hardware of Cape Haze in Cape Haze, Florida, from him in 2014. “We had put a lot of hard work, labor and care into it, and we wanted someone who would do the same,” Staats says. He also has a plan for Kingsway Ace, which he expects to sell within the next few years. Staats and his wife pay close attention to real estate values in the area because they own the land where the store is located, and they are keeping track of inventory and financials in such a way that they already have a good idea of what their asking price will be if they sell soon. “We’re at the age that we know that we might need to sell within a year or so. You know, health could go downhill or something,” Staats says. Planning ahead also gave Craig Buckalew, owner of EGF Hardware Hank in East Grand Forks, Minnesota, and Bill Klingbeil time to train their sons over the course of several years to prepare them for ownership. The plan for Bill’s exit has included gradually increasing Pete’s responsibilities over time; giving Bill’s brother Tim an important role in mentoring Pete; and having a certified public accountant, attorney and insurance agents handle the important paperwork.

Harold Staats, owner of Kingsway Ace Hardware in Port Charlotte, Florida, operated two stores before selling his Cape Haze, Florida, location to an outside buyer.

HARDWARE RETAILING | August 2016

Before

After

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Bill Klingbeil is gradually selling Klingbeil Lumber Co. to his son, Pete, and increasing Pete’s responsibilities over time to prepare him to be the boss.

Time for Gradual Transitions

“It’s like the marriage and honeymoon the first year, then the nitty-gritty—kids, life changes all the way down the line.

”

—Craig Buckalew, EGF Hardware Hank

“It took about a year to figure out, but I think we pretty well have everything set for my graceful escape,” Bill says. Bill expects both he and Pete will be ready for him to retire in two or three years because of the time they’ve taken to prepare Pete for becoming the boss. “I wanted to be sure he was seeing the big picture of the business. There’s so much more involved than hardware or lumber,” he says. “It’s finance, employees, community involvement.”

HARDWARE RETAILING | August 2016

Regardless of the type of succession plan, time helps. Buckalew asked his son Brandon if he would be interested in buying the business. Brandon’s answer was “yes,” but Craig made space in his plan for Brandon to change his mind about taking over by making the leadership transfer a progression. Craig gave Brandon more and more responsibility over the course of about five years, first having him manage employees, then adding marketing and other areas for him to oversee. “I wanted to be sure he was sure,” Craig says. “It’s like the marriage and honeymoon the first year, then the nitty-gritty—kids, life changes all the way down the line. We wanted to make sure he understood that, even though he had been around the business all his life.” The plan is to have Brandon finish purchasing the business this year, but wait for him to buy the building, Craig says. Bill Klingbeil learned a lesson when he was buying out several relatives in the 1990s with a plan of owning and operating the family business on his own. At the time, the family didn’t have a formal succession plan in place, and an accountant helped Bill understand the importance of legal documentation.

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“If something happened to my dad, what was going to happen? Nobody seemed to know,” Bill says. He is handling the transfer of ownership to his son differently, with the encouragement of his wife. “She realized that if something happened to me, nothing was in writing about what would happen to the business as far as my son is concerned and as far as my wife was involved,” he says. “I knew I needed to have something in writing. And when you start having big debts, the bank likes to see your plans.” As part of his succession plan and to prepare for the worst, Bill and Pete bought life insurance policies on each other, and Bill made sure his brother Tim was on board with helping mentor Pete, just in case Bill wouldn’t be able to do it. “I think we’re all set for a tragic mishap or my gradual retirement,” Bill says. He’s been planning all along, though, for a gradual transition. One of the problems with making rapid transitions without much prior planning is that the new owners don’t get holistic views of the business and can get overwhelmed quickly, Bill says. “I think there’s a lot of ways to shock people into not enjoying what they’re doing,” he says. “I think it’s got to be so gradual and so sensitive to that son or daughter, who needs to see the big picture, to get a little bit of information about everything over a period of years. If you have the ability to have things long term, to have a longterm plan, then you can transition them so they can see everything as a whole.”

Getting Good Advice Having trustworthy advisers is important to any ownership transition. Finding those advisers within the home improvement industry, as well as relying on business professionals, such as accountants and attorneys, can help prevent problems in the selling process. Problems could include attempting to sell at too high a price, misjudging the value of inventory or making a transition so rapidly that the new owner is unequipped for leadership when the deal closes. Hitting pitfalls in ownership transitions is easy, particularly if a seller has little or no prior experience with selling a business. Staats relied on an attorney and commercial real estate broker for guidance, as well as on his co-op, when he decided to sell Ace Hardware of Cape Haze. And the Buckalews turned to their distributor’s CEO and to a business evaluator for advice on their transition, Craig says. “We wanted to see what advice anyone who had gone through the process had for us,” he says.

HARDWARE RETAILING | August 2016

Mike Monserez, prior owner of Hardware Plus in Osceola, Indiana, found his father’s counsel was vital for planning the sale of his store. “I very much leaned on my dad,” Monserez says. “He had liquidated three stores in his lifetime. He certainly had some experience in selling a business, so we talked quite a bit about that.” Monserez had purchased Hardware Plus from his father 35 years prior, and that experience ended up serving him well when he decided manager Chris Hughes would be ideal to buy the business. At the time, Hughes had worked for him for 15 years, and Hughes felt ready to take charge when he bought the store in 2008. Monserez was able to use his experience of buying the business decades prior as a blueprint for how he sold to Hughes, he says.

Finding the Right Buyer Among the difficulties of selling a business is finding a purchaser, especially if no relatives or standout employees are in positions to buy. Monserez didn’t have a family member who could buy, and he’d been thinking about retirement for a few years before asking Hughes if he wanted to own the store. “The advent of technology was what spooked me. I wasn’t well versed in the way things were changing. That was probably the main motivating factor that made me say it might be time for me to leave,” Monserez says. “Chris had been with me a lot of years and seemed to be a naturally ambitious young man. He had implemented a lot of different things. He was ambitious, aggressive and tech savvy, and I thought he was natural to succeed.”

“Just be truthful in

your inventory figures, truthful in what you think things are worth, so you don’t have to come back and say, ‘Uh-oh. I made a mistake there.

”

—Harold Staats, Kingsway Ace Hardware

On the other hand, Staats doesn’t have children and none of his employees were in any position to buy a store. So, when his nephew moved away, he used a broker and his co-op to try to find prospective buyers from the outside. He was able to find a buyer he not only liked, but also befriended. Buyer Jim Stoner was looking for a business to own and operate, and Staats says he respected Stoner as a businessman from the start. He could see Stoner had the vision and business skill to improve the store. “He wanted it. He had a passion for it,” Staats says. “He had been working in sales, and that area was part of his territory. He knew a lot of people. I just liked his energy and his ideas. He wanted to take the store and make it better.” Staats knew Stoner had prior business experience in the construction industry that would serve him well as a hardware retailer, but Staats also noticed and appreciated his enthusiasm. He could see “the gleam in his eye when he talked about it. He just really wanted it,” Staats says. “And I could see that he was already making plans for what he would change.”

Craig Buckalew and Bill Klingbeil both had successors in line for years because their sons had already worked in their stores and wanted to take over from their fathers. “He’s a really hands-on guy,” Bill says of Pete. “He got to know the contractor customers. He had a little desk in my office where he would do his homework. He was really familiar with (the business) 10, 11 years before he made the decision.”

The Financial Side Part of making a sale mutually beneficial is figuring out financing that works for both the buyer and the seller. The selling price of the business and the buyer’s financing method are both important when securing a seller’s retirement and supporting the buyer’s future success. When selling, retailers will need to calculate how much money they need to live on in retirement. That amount is distinct from the value of the business, which cannot be priced higher than it is worth simply because an owner needs a specific amount of money to retire.

Craig Buckalew, pictured above, is working with his son on a five-year transition plan, as his son prepares to buy EGF Hardware Hank from his parents later this year.

HARDWARE RETAILING | August 2016

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A retailer needs to accurately assess the value of an operating business, its fixtures, equipment and inventory, as well as the building and property, if applicable. Detailed financials that show a company’s consistent growth over multiple years are an important selling point, if a business has them, Staats says. Carefully kept financial records, opinions from commercial brokers and up-to-date inventory data figure into accurately assessing a business’ value. Staats’ co-op provided a template for him to use to create an analysis of the value of his Cape Haze store’s assets. “You need a good breakdown for potential buyers so they see what they’re getting for their money. Fixtures, equipment, inventory,” Staats says. “Fixtures in place are worth so much more than having to buy new fixtures and paying people to set them up.” Staats already had financial paperwork prepared to show to prospective buyers when Stoner came to him wanting to check the health of the business before making an offer to buy. Having accurate documents ready in advance helps with setting a fair asking price and smooths out the selling process, Staats says.

“The main thing is, just be truthful in your inventory figures, truthful in what you think things are worth, so you don’t have to come back and say, ‘Uh-oh. I made a mistake there,’” he says. “You need to sit down and decide what your bottom line is for what you’ll take for the business. You just have to make up your mind that that’s what you’re going to do, and set a fair price. Not a pie-in-the-sky price.”

Working on Financing Retailers can choose varied approaches to working with buyers to come up with the money to purchase their businesses. A seller’s exit plans can depend very much on a buyer’s financing. “The biggest part of succession planning, in my opinion, is the financial end of the business,” Bill Klingbeil says. “It hinges on how the business is doing and the capacity the next generation has to buy it off.” He and Pete have worked out a gradual payment plan. Pete is making automatic payments on the store out of his paychecks, and currently owns about 10 percent of Klingbeil Lumber. Craig and Brandon Buckalew have a similar arrangement. “The agreement was, X amount is your salary, and this is what we will contribute to your equity

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HARDWARE RETAILING | August 2016

Bill Klingbeil is confident his son Pete will be ready to take over Klingbeil Lumber Co. when he retires.

every year you stay, and you always have the option to leave any time,” Craig says. “It’s about how you make the transition and financially make it work. Brandon had to work at a reduced salary to get equity into the business, but you are usually willing to do that if you know what’s going on. That’s keeping your eye on the ball.” Monserez has known Hughes for years and worked to provide him with financing. “I did retain the building as an insurance policy for my retirement. That was how we structured the buyout; he signed a 10-year lease,” Monserez says. Hughes is also paying Monserez over time for the store’s inventory. “We have a handshake agreement that he will eventually buy the property and the building, too,” Monserez says. In contrast, Staats had decided, and expressed to every potential buyer up front, that he wasn’t willing to offer seller financing. Deciding in advance what he was and wasn’t willing to do smoothed the process, he says. Other financing routes for buyers could include bank loans, loans through the U.S. Small Business Administration, money rolled over from investment accounts or a combination of multiple methods. Staats’ buyer, Stoner, opted to use retirement funds and an SBA loan.

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Deciding How to Exit Not every retirement or sale can have a smooth transition, due to emergencies or a need to sell quickly. But even a few months of a seller helping a buyer learn how to run a company can better secure the future success of a business after it sells. Staats intentionally developed a personal relationship with Stoner during their negotiations over the sale of Ace Hardware of Cape Haze. He believed working together would be vital to getting Stoner off to a strong start. To help with Stoner’s transition, Staats agreed to continue working at the store three days a week for three months after he sold. “I think the buyer and seller have to get together personally,” Staats says. “I wanted him to be a success. I don’t mean that he needed to follow all of my business philosophies, if you will. But you need to learn the computer systems, learn where things are hidden under shelves.” Monserez stayed involved at the store for the first few years after Hughes bought it, but steadily decreased his hours. “I did tell him I would hang around, so to speak,” Monserez says. For the first few years, Monserez worked three eight-hour days per week, then cut those

back to three four-hour days. Now, he goes to Hardware Plus occasionally to do screen repairs, but he is no longer involved in any day-to-day operations at the store. “I made a whole thousand dollars last year,” Monserez says. Hughes very capably runs the business without him, he says. “The transition was very, very seamless,” Monserez says. “It’s all about communication to start with. Plan your work and work your plan.” In addition, a successful transition should include flexibility from the seller about changes the buyer wants to make to the business, Craig Buckalew says. Anyone looking to sell a store should give buyers the opportunities to experiment, make mistakes and try again, he says. “You can spend five years selling to a buyer or grooming a successor. There might be some frustrations, as no two people run the same business alike,” Craig says. “Brandon and I have the same goals, but there’s more than one way to get to the finish line. We adjust our business plan as we move forward, and I think incoming buyers do the same thing.” This article was written by Hardware Retailing editors Kate Klein and Liz Lichtenberger.

Additional Resources To take a quiz to determine if you are ready to sell your business, visit TheRedT.com/sellingquiz. And to look at a timeline of what buyers and sellers need to do, go to TheRedT.com/succession-timeline. Read the incoming generation’s perspective on succession planning and business buying from the July issue of Hardware Retailing at TheRedT.com/succession-planning-part-1. Understanding the value of a business’ assets is an important part of setting a realistic asking price when preparing to sell. Hardware Retailing interviewed Gary Pittsford, president of Castle Wealth Advisors in Indianapolis, about the valuation process. Pittsford has worked with independent home improvement retailers across the U.S. to prepare financially for acquiring, expanding and selling stores. Find the valuation Q&A with Pittsford at TheRedT.com/valuation-qa.

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I wish e... I would

This is what I’ve learned..

My favorite memory is...

If I couldagdivveicoene piece of be. . i t would

“Dear Me” Reflections on Careers in Hardware

o you remember your first day on the job? Perhaps you were just a kid, following your dad around, sweeping the floors and stocking the shelves at the family business. Or maybe you were in college and you went to apply at the local hardware store for a part-time job. No matter where you were when you began, the goals and dreams you had envisioned for yourself when you started your hardware career have undoubtedly changed with the passing of time. Are there things you wish you’d done differently? Or do you see the path you carved as what led you to where you are today? Hardware Retailing invited four retailers who are in different phases of their careers to write letters to their younger selves. We spoke with someone who is new to the industry, two who have established their careers, and one who is reflecting from retirement. In these letters, you’ll see the growth and lessons each person has learned during their experiences along the retailing journey.

HARDWARE RETAILING | August 2016

NRHA Staffers Look Back The North American Retail Hardware Association (NRHA) staff also wanted to join in on the fun and reflect on their time spent working for the association. To do this, four different people, including a former publisher and three other faces from headquarters you’ll likely recognize, also sat down to reflect on where they’ve gone in their careers and what the industry has meant to them over the years. Visit TheRedT.com/Dear-Me-NRHA to read letters from the following individuals: • Bob Vereen, former publisher • Bill Lee, president and CEO • Scott Wright, executive director— Retail Leadership Institute • Kate Klein, assistant editor

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Camille Gibson

Operations Manager Ace Hardware Tucson, Arizona

Age: 27 years old T ime in Industry: 8 years younger self,

Can you imagine growing up to be the operations manager of a hardware store? I bet that

seems obscure right now because you have no hardware retail experience, nor any practice in running a business, but believe it or not, going to happen. your freshman year of college, Mark Rios will hire you as a part-time cashier at Ma Ace Hardware. Over the next eight years, your hard work and dedication will lead you into obtaining various roles such as paint manager, supervisor, assistant manager and ultimately operations manager. The path you will take in acquiring this job does not come easy. Not growing up in the hardware industry means you will have so much to learn in a short amount of time. Listen to your managers, coworkers, and customers; they will teach you a large amount of product knowledge that will lead to your success. When you go home, research the answers to the questions you did know. Practice hands-on projects at home so you can speak confidently. Another challenge you will face is being a young female in a male-dominated industry. Some customers are skeptical of a female giving them advice at a hardware store. Your drive to learn will help you overcome this challenge. When your uncles are coating the roof at your grandma house or tearing a wall down at your go with them and help them. When you want to understand the difference between the paint lines you sell, paint each room in your house with a different product. Your desire to have the right answers will help you gain confidence in yourself and your knowledge, allowing your customers to have faith in you. You will become a manager at the young age of 22. You now have to focus on learning how to manage people, some more than three times your age and some who were previously your supervisors. Mark is such a great role model. He will teach you to take good care of your employees, which will encourage the employees to take good care of the customers. I have many words of encouragement for you: You must learn to be confident in yourself and your abilities. There is nothing you are incapable of doing or learning, and you are making the right decisions. Always be willing to learn, because knowledge is power. You will not be successful if you do not have the drive to progress. When you learn, share the information. Pay attention to your hardworking mother, because even though you do not realize it now, you will see that she raised you to have strong work ethics that shape your future. Most importantly, make sure you love what you do. You may not have imagined you would be running a hardware store. Be proud on your first day, because this is just the beginning. Sincerely, Camille Gibson 60

HARDWARE RETAILING | August 2016

Your desire to have the right answers will help you gain confide nce in yourself and your knowledge, allowing your customers to have faith in you.

Be proud on your first day, at because just the beginning.

Ace Hardware

As a female, you love when you can prove your product knowledge to skeptical customers.

Early on, you had no knowledge of paint. Three years later, you managed the department.

Working with the entire team at Ace Hardware is by far your favorite part of the job.

August 2016 | HARDWARE RETAILING

Tony Brookhouse

Co-owner and COO Koopman Lumber 7 Massachusetts locations

Age: 49 years old Time in Industry: 20 years Hey Tony, It’s spring of 1996 and you’re 29 years old. Now, fast-forward 20 years. You’ve built a life and a career in the home improvement industry. How did this happen? You and your wife will leave Grand Rapids, Michigan, to move to Whitinsville, Massachusetts, with your newborn son. This will be the result of your father-in-law asking you if you’d like to become partners with your brother-in-law to work toward taking over the family business, Koopman Lumber. Over the years, you’ll see the results of your hard work. You won’t see it right away, but when the company is moving in the right direction, it will show. Another rewarding aspect will be your ability to offer career opportunities. Now you have 80 employees. In 2016, you’ll have 248. Will there be difficulties? Of course. It’ll be hard to balance your work and personal life. As an owner of a hardware, lumber and paint business, you’re always on call. You handle it by embracing it as a part of your life. Business employees are your extended family, and you treat them as such. It’s a privilege to have that responsibility. The hardest part of your career will be putting the puzzle together correctly. Placing the right people in the right roles and creating or eliminating roles is tough. You’ll make decisions that you wish you could change. You’ll hire people who don’t fit the company culture. It will be disruptive, anti-productive and a very big mistake. You’ll regret opportunities you didn’t jump on soon enough. You’ll also regret having to let some people go during the Great Recession. And there will be times you wish you’d thought more and talked less. There are three things I want you to take away from this letter. The first is to start praying more, and earlier. Next, surround yourself with smart people who have integrity. And finally, get your MBA. Get involved in the industry. You will learn from all of the great retailers out there. Don’t be afraid to fail. Keep your foot on the gas, and keep reinvesting in the business. It helps to attract good talent, and people notice. You can do it! Go for it! Tony Brookhouse

HARDWARE RETAILING | August 2016

your ployees are Business em u treat mily, and yo extended fa ilege to h . It’s a priv them as suc sponsibility. have that re

There’s plenty of work involved when you own a business, but that work will pay off.

Here’s a look at the exterior of one of your stores in Sharon, Massachusetts.

Take time to get to know your employees and other retailers in the industry.

Here’s your headshot from the time you served on the NRHA Board of Directors.

August 2016 | HARDWARE RETAILING

I have been in business for qui te some t ime now, one thing will always be a challenge: cash f low!

At 18 years old, your li fe is ahead of you.

You enjoy family t ime in and out of work.

W hen you spend t ime away, have fun!

Li fe changes, but the store is a constant. August 2016 | HARDWARE RETAILING

Dale Townsend

Retired, Former Owner Townsend Building Supply Alabama and Florida

Age: 69 years old Time in Industry: 40 years Hi young Dale, Remember when you started working part-time for Dad’s store during high school? That was the first time you drew a paycheck, making 50 cents per hour. You thought you were rich! By age 14, you knew you wanted a career with the family business. In 1974, Mom and Dad sold you the business. You were 27 years old at the time, and in hindsight, you didn’t have a clue. Over the years, you’ll develop meaningful relationships with employees, customers and vendor representatives. You’ll share ups and downs together, while watching each other’s lives grow. One of the most rewarding parts of your life will be watching your sons learn and grow in the business. The memory of when your eldest son tells you he wants to come back to the business after college will stay with you forever. Once both of your boys take over, the operation will grow from two to six locations in only a few years. They’ll do things you’ll never ever think of doing to expand the business. There’s something very special about moving into the third generation of family involvement in the business. My advice to you would be to enjoy life a little more. The years fly by so quickly, and in hindsight, I wish I had taken more time off. Be willing to pay for top-notch talent. At times, I could have hired better people if I had just looked at it as an investment instead of an expense. When it’s time to retire, hire a consultant a few years out to help plan the succession. You’ll want to partially retire, and only work part-time. But the consultant will help you understand that as long as you’re around in any capacity, you’ll be viewed as the boss, instead of your sons. Get out of their way. There’s no question in their ability to run the business. They have new ideas, and you’ll be mired too much in the past and stuck on how things have always been done. You’ll set a date to retire, and it will be your 65th birthday. You’ll walk out the door and will stay completely away for several weeks. It will end up being the best thing for you, your sons and the business. You’ll refuse to talk with customers or employees about the business, and will refer them to your sons. You won’t meddle in your sons’ business, but if you’re asked for advice, you’ll always give it. All my best, Dale Townsend

HARDWARE RETAILING | August 2016

My advice to you would be to enjoy life a little more. The years fly by so quickly, and in hindsight, I wish I had taken more time off.

My father, Austin (right), sold the business to me in 1974 after 30 years of ownership.

My two sons, Michael (left) and Turner (right), are now the third-generation owners.

Here I am carving a turkey during an open house at the Alabama, store in 2010.

one of the six store locations.

Alabama, store,

August 2016 | HARDWARE RETAILING

By Renee Changnon, rchangnon@nrha.org

BRANCHING OUT Niches to Help You Grow Your Lawn and Garden Business

re you looking for ways to spice up the lawn and garden department? Then consider unique products and services you can add to help distinguish your store from the competition. In order to keep lawn and garden enthusiasts coming back to shop, you should explore unique niches beyond the basics. In this article, Hardware Retailing will highlight four different trends retailers have added to their lawn and garden departments to provide a specialized service and keep customers happy and engaged. On the following pages, you’ll learn about a store that has taken the fairy garden trend to new heights; see how DIY ponds and pond supplies can add more foot traffic; discover a business that gives customers a different way to garden through hydroponics; and see how a landscaping service can add to the bottom line.

HARDWARE RETAILING | August 2016

Honey, I Shrunk the Garden “Fairy gardens,” also known as “miniature gardens,” have picked up speed over the past few years, and many retailers are giving the niche a try. So what are they? Gardeners take, in miniature, all of the elements of a yard, including plants, a tiny model home and landscaping materials such as mulch, to depict a real yard inside a whiskey barrel, pot or other container. For the past seven years, Hartville Hardware in Hartville, Ohio, has built upon this growing trend.

Testing Out a Whimsical Garden Trend When Steve McMillen, manager of Hartville Hardware’s outdoor living department, first proposed selling fairy gardens, he said the staff was skeptical. The niche started with only 3 or 4 feet of space and today, it takes up 20 feet.

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“When I first decided to add fairy gardening products, I thought it was just a cute niche people might like, and I figured we would ride it until it burned out,” McMillen says. “I never expected it to be going strong seven years later.” Whether customers are creating their first fairy gardens or simply searching for new items to add to the ones they’ve already designed, the category delivers in sales, he says. “Even though it’s miniature pieces, they do add up quickly. A customer might buy a house, a fairy and a mini-lawnchair set today, and next week, they might come back to buy a miniature grill or start another garden. It’s really kind of fascinating,” McMillen says. The store devotes the most space to the niche in the busy lawn and garden months, but the best part about fairy gardens is that they can be created and maintained year-round, McMillen says. “We keep our fairy garden items out all year. However, in the winter, we consolidate it from 20 feet to about 8 feet of space,” he says. “We add winter wonderland-themed items and even sell Santa Claus figurines, reindeer and more. People can have them outside in the warm months and then move them indoors in the winter.” Items customers may purchase to create a fairy garden include objects that are made specifically for the smallgarden scene, like small stepping stones, chairs, fences, water and lighting features and miniature plants.

Successfully Sell the Fairy Garden Niche Retailers who decide to try their hand at selling the fairy garden niche should start by creating a few miniature gardens to display and have an employee or two to take charge of the niche, McMillen says. To help a customer visualize the tiny, whimsical landscape they can create, and to draw them in to the category, Hartville Hardware has a few fairy gardens on display that employees designed and made with products from the store.

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HARDWARE RETAILING | August 2016

Hartville Hardware employees design fairy gardens with products stocked to intrigue customers and spark inspiration.

FOR THE

FIRST TIME EVER

WIFI ENABLED SMOKERS

When Outdoor Living Manager Steve McMillen introduced fairy gardening seven years ago, he didn’t think it would become such a strong category at Hartville Hardware.

“We’ve made up some fairy gardens here to show people what they can do,” he says. “You can take a broken clay pot and make one in that. We’ve made them in wagons and even birdbaths. The possibilities are endless.” What has made the category successful at the store has been identifying an employee who is interested in the niche and who can answer questions and help customers design their own fairy gardens. “We have one employee who designs our store fairy gardens and helps customers come up with a design. I think of her as my go-to person for fairy gardens,” McMillen says. Although having an employee dedicated to the niche isn’t necessary, it does help customers brainstorm and find fun ways to start or improve their miniature gardens–all making the category easier to sell, he says. In addition to creating visually appealing displays and training your employees to help customers find items for their own gardens, McMillen says those who want to find success in the category shouldn’t just pick up a few SKUs. “Honestly, you’ve got to get in deep,” he says. “If you just add 10 items in the category, you won’t give your customers enough options. By having a wide selection of items, your customers will know you’re truly in the fairy garden business.” To get our hands dirty and try out the popular trend, Hardware Retailing editors went to a local hardware store to pick up items to create an office fairy garden. Flip to Page 86 to see a visual, step-by-step guide of our fairy garden project and gain inspiration for your store’s own fairy garden display.

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Ready, Set, Go Fish! When a family heads to Johnson’s Home & Garden in Maple Valley, Washington, the kids often beg to visit one special feature of the store–the indoor pond located in the greenhouse. Johnson’s Home & Garden has had an indoor pond since 2014, and the response from customers and their families has been huge, according to Doug Kelly, nursery manager at the store. “Almost every kid and adult who comes to the store wants to come look at the pond and see the fish in our greenhouse,” Kelly says. “It’s been a huge draw for business.”

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August 2016 | HARDWARE RETAILING

Make a Splash With DIY Ponds

In the greenhouse at Johnson’s Home & Garden, customers of all ages are excited to stop by the pond and look at the fish.

HARDWARE RETAILING | August 2016

Back in 2013, Johnson’s Home & Garden relocated into a new, 25,000-square-foot building. One week after the store opened, Kelly, a retiree who used to own and operate his own nursery, joined the team. “After I came to work at Johnson’s Home & Garden, I learned they wanted to add a pond. I encouraged them to make it bigger than they originally intended, because a bigger pond makes a bigger impression on curious customers. They agreed to go bigger, and my son constructed the pond and had it up and running by January of 2014.” Having sold both outdoor and indoor pond projects in the past, Kelly has a wealth of knowledge that he is able to share with customers when they decide to test the waters. “At the store, we offer a type of pond that is very easy to install,” Kelly says. “For a customer to create a pond that is perhaps 8 by 11 feet, the project typically includes a pond kit, rocks, lights and plants, and it is usually about $2,000.” To really see big interest in the category, retailers need to have a pond on site, Kelly says. Installing one is an investment, but it can pay off in the long run, he says.

“We’re trying to establish a solid pond business at the store,” he says. “It’s an expense to get it set up, and inventory in the pond category is expensive, but once your customers and those interested in ponds know you have the items they need, the word spreads quickly.” In the time the store has been selling products in this niche, which includes pond materials, maintenance and tools, sales have increased about 30 percent year-over-year, Kelly says. Another perk to selling the unique pond and pond accessory niche is that competition is usually not right next door. The nearest competitor to Johnson’s Home & Garden is about 20 miles or farther away, so once customers realize the store has what they need, they don’t drive elsewhere for products and materials, Kelly says.

what they need. If we don’t have something in stock, I can usually get it ordered and to the store in about a week. “In order to succeed in this category, it’s important to have someone available to really help with product knowledge,” Kelly says. “Plus, if you have room for it, add a pond to the store. When customers can actually see it, they spend time visiting the pond and watching the waterfall.”

DIY Project Leads to a Tranquil Escape Installing a pond might be easier for some homeowners than others, but Kelly is able to assist interested customers by helping them plan out their own ponds with his knowledge and expertise. “I don’t provide specific training on how to install a pond, but I help customers on a more one-on-one basis,” he says. “Everybody’s pond is different, so I talk with them and help them decide

In addition to picking up the products to create a pond, customers browsing Johnson’s Home & Garden can also find plants to add to ponds.

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Ace Hardware Fall Convention August 18-20, Chicago, IL – Booth: 1586

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August 2016 | HARDWARE RETAILING

If your business sells the products to create a pond, Doug Kelly says having a wide assortment of pond accessories is key for repeat customers.

Kelly often helps customers think through what they need to create their ponds, walking them through the steps of digging out the desired depth, adding in plants, installing the water filtration mechanism and then selecting the plants and other products they may need to keep the pond clean and maintained. The store sold fish for a while and may return to selling them again soon. According to Kelly, adding goldfish or koi fish adds an extra element to any pond. Kelly has his own garden pond at home, and once it was designed and installed, it became easy to maintain and extremely enjoyable, he says. “I have a small pond at home that turns into a 15-foot stream which goes into a larger pond,” he says. “I enjoy sitting on my patio with a cup of coffee, listening to the water and watching the fish swim around. “I try to check the skimmers, which remove unwanted debris from the surface of the pond, every week, but otherwise, it takes care of itself,” he says. “About one day a year I devote to cleaning the pond.” Whether having a pond outside or inside, Kelly says it’s a great project for homeowners and can be enjoyed all year.

You can download a PDF of 10 helpful tips and tricks to install or maintain a pond, and share with your staff and customers. Download the guide at TheRedT.com/DIY-Ponds.

PREMIUM WORK & GARDEN GLOVES

Planting Without the Soil After learning about people trying hydroponic gardening in California and Texas, Max Chenevert, vice president of Vernon’s Hardware in Baton Rouge, Louisiana, decided to give the niche a try. Hydroponics is the practice of growing plants with just water and nutrients and without soil and is often done indoors, but can also be done outdoors. Growing plants hydroponically has many advantages for commercial growers and hobbyists. Growers save space, water and time, since no weeding is required. Additionally, pests and diseases are drastically reduced with hydroponic gardening, and plants can grow at a quicker pace. After hearing about hydroponics on the news and seeing how much it was growing in popularity out west, Chenevert wanted to get in on the action. “I could see the trend growing, so I decided to give it a try and started off with a 4-foot display,” Chenevert says. “I knew very little about hydroponics in the beginning, and now, about seven or eight years later, it’s expanded to about a 100-foot display.”

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Selling Hydroponic Gardening Vernon’s Hardware has always had a strong lawn and garden department, but as people began spending more money on organic foods and returned to gardening, Chenevert thought it might be a good time to try out hydroponics. “We offer a wide selection so people know we are serious about hydroponics,” he says. According to Chenevert, he does his best to help answer customers’ questions and lead them toward resources to learn more. He advises those interested in hydroponics to start out small. “Growing plants through hydroponics doesn’t take up as much space as traditional gardening, but this type of gardening requires a lot of attention,” he says. “The gardener needs to have

Before selling them all of the products needed, he encourages customers to make sure they have a solid foundation and a working knowledge of the project.

time to check on the plants every day, making sure they have the right nutrients, and check the pH levels. I recommend people start small, and if they enjoy it, then go big. But it’s important to figure it out before going all in with something like this.” Since the practice can get pricey, Chenevert also stresses that customers need to be fully informed about the fact that hydroponics is much more involved than traditional gardening.

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By keeping customers aware of this fact up front, you’ll avoid customers taking on more than they can handle.

Category Knowledge Boosts Store Traffic Because of his personal interest in hydroponic gardening, Chenevert has taught himself and his staff a lot about hydroponics, and in order to keep this category a success, his employees are able to gain experience with hydroponic gardening, thanks to the plants he has on display inside and outside the store. “I teach our employees how to grow hydroponically at the store so they get handson knowledge and learn techniques to teach others,” he says. “We have two indoor garden areas up front, and we have an outdoor garden behind our store. My employees learn to take care of the displays, and I try to teach them the things I know as time goes on. If I have an employee especially interested, I’ll suggest different literature I’ve read that they can check out.” While many customers come to the store requesting help based off of a video they saw on YouTube, Chenevert says he typically prefers to find knowledge from more reliable sources.

As far as helping customers, Chenevert says he does what he can to help and offer tips, but he encourages them to do research on their own prior to investing. Before selling them all of the products needed, he encourages customers to make sure they have a solid foundation and a working knowledge of the project.

Vernon’s Hardware even grows hydroponic plants on site, which allows employees to get firsthand experience.

“The customer has to have his or her own idea of what they want to do and needs at least a working knowledge of it,” he says. “Once they have an idea, I can try to help them fulfill that need.” A customer interested in getting started will need something to check pH, a way to measure electrical conductivity of water, a hydroponic system to grow plants in, nutrients, indoor lights and ventilation. Some of the most common

plants grown are lettuce and tomatoes, and many people want to do cuttings or propagate, which is replicating their favorite plant, like a rose bush.

If They Can Dream It, You Can Landscape It For nearly 30 years, Steve’s Ace Home & Garden in Dubuque, Iowa, has been a destination for all things lawn and garden. Locals know they can find what they need at the store, including expert advice on landscaping. According to Sara Carpenter, landscape designer and daughter of owners Steve and Judy Selchert, her mother had been helping customers create a game plan for their yards, even taking special trips to their homes to help them decide what they might want to invest in. Now, they offer a landscape design service that has grown the client base and their lawn and garden sales.

Local Gardening Experts Build Customer Confidence

When a customer decides to practice hydroponic gardening, they’ll return to your business frequently for needed accessories.

What started out as an owner helping a customer outside of work hours transformed into a landscape design service, which Carpenter says began about 16 or 17 years ago.

“We help them draw

out the design and provide an estimate for the materials they need. Then, if they want it installed, we recommend local landscapers.

”

—Sara Carpenter, Steve’s Ace Home & Garden The store now offers the service for a fee, which includes on-site visits to obtain measurements, a custom design based on a client’s needs, an in-store presentation of design and referral to local landscape installers. “We help them draw out the design and provide an estimate for the materials they need. Then, if they want it installed, we recommend local landscapers to do the job,” Carpenter says. After following along with her mother on landscape design appointments as a child, Carpenter decided to study horticulture. After graduating, she returned to the store to work as

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When Sara Carpenter of Steve’s Ace Home & Garden helps a customer, she uses design software to draw out her landscape design plans.

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a landscape design expert. Having experts on their staff has built the business’ credibility and its sales. “It’s great being the expert, but it also comes with a lot of responsibility,” Carpenter says. “The more you help people, the more the word spreads, and you become the expert. We sell a ton of product through our landscape design services.”

Providing a Detailed Sales Experience

The first thing landscape designers from Steve’s Ace Hardware & Garden do when visiting a client’s home is snap pictures of the home.

HARDWARE RETAILING | August 2016

In addition to helping create a landscape design outline and quote for a customer, Carpenter says they’re able to sell more products like plants, soils and other items while helping local landscapers gain constant business by sending project requests their way. If you do refer a customer to contractors, however, it’s important to refer them to landscapers you trust. It’s a good idea to vet potential landscapers prior to offering them jobs, because while they will manage that end of the job, a customer will still associate that landscaper with your business. Consider having clients fill out contractor reviews after the fact so you can stay on top of this information and only refer the best of the best. “With the customer’s permission, we forward the design to a list of contractors, and that group

fights for that customer’s business by giving them a competitive price,” she says. “It’s a win-win for the customer and local contractors. The customer gets to decide who will do the job, and the landscapers are able to stay busy. On top of that, we end up selling plant material without competing with local landscapers.” While the service is busiest during the spring, summer and fall, Carpenter says she and the other landscape designer stay busy in the winter as well. “We are providing landscape design services all year round,” she says. “When we’re not able to go out and make detailed visits during the winter, there are other projects at the store we manage as well, usually related to the lawn and garden department.” Carpenter estimates she visits over 100 homes each year, as does her counterpart. They don’t need to advertise the service, because feedback from happy clients spreads. In addition, Carpenter is often asked to speak at different events to share her landscaping expertise. “We spend no money advertising our services,” she says. “After my most recent speaking event, four people in attendance invited me to their homes,” she says. “The speaking engagements I go to are free advertising.” When she’s not helping a client decide on a landscape plan, Carpenter and the other landscape designer also offer another service called garden coaching. “We go to people’s homes and talk shop about their gardens. We show them how to care for plants, fine-tune their design and offer landscape maintenance,” she says. To best coach interested customers, Carpenter says she reads magazines, subscribes to blogs, and looks online at platforms like Houzz and Pinterest, in addition to participating in formal education and attending gardening trade shows, like the Independent Garden Show.

Before starting each project, landscape designers from Steve’s Ace Hardware & Garden create a mockup of the final product for customers to see.

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Newsmakers

Brexit and Its Impact on Retailers in the UK and Beyond

Alan Hawkins is CEO of the British Independent Retailers Association (bira), the leading association for independent retailers in the U.K. The British Hardware Federation is a specialized division of bira.

fter a majority vote to leave the European Union, the British exit, or Brexit, is already making waves in the global economy. To gain insights on what Brexit means to the U.K. and how it may impact retailers in the U.S. and Canada, Hardware Retailing interviewed Alan Hawkins of the British Independent Retailers Association. Read the exclusive Q&A with Hawkins below. Then, go to TheRedT.com/brexit-retail for more from Hawkins, as well as opinions from a U.S. economist with the National Association of Home Builders. Hardware Retailing (HR): What are the immediate impacts Brexit has on independent businesses in Britain? Alan Hawkins (AH): Uncertainty has been the biggest problem. Financial markets, business owners and customers all need a degree of certainty to make decisions. While the EU exit vote was in the cards from the opinion polls, I suspect most commentators expected us to stay in. Indeed, the markets rose the day before the vote on this expectation. After the initial fall, markets are recovering. We have a new prime minister in Theresa May. Popular opinion is that while she may lack a bit of charisma, she may have the eye for detail to negotiate Britain reasonably good exit terms. One of the key factors in the vote was free movement of labor across the EU as well as goods. HR: What are the effects you’re seeing on the home improvement/hardware industry in Britain? AH: It’s too early to say. Consumer confidence figures from reliable government sources say confidence has dipped badly and that will affect consumer spending. One survey before the vote of the top 50 U.K. retailers said 79 percent felt the effect would be moderately or seriously negative to our economy. Retailers are optimists, however, and will be doing their best to attract customers. The best will survive, but Brexit, on top of new national living wage regulations and automatic pension rights to staff, against an already weak retail background, can’t be good. HR: What do you think Brexit will do to the home improvement/hardware industries in other countries? AH: The U.S. market is so big relative to the U.K. and even Europe, so I can’t see any big knock-on effects. Some of our bigger players may be vulnerable to takeover as a strong dollar makes our companies appear cheap. I come from the independent sector, so I sleep a little easier on this point. HR: How do you recommend that independent retailers respond to Brexit? AH: I suggest, as far as possible, retailers carry on as normal. Spread positive messages to your customers. As one retailer said to me, whatever the problem, the biggest single factor on a good or bad day is the weather. I am sure he was right. The best thing is to join your trade association and get all the help we can give you and keep you in touch with others going through exactly the same issues. Together, we have the answers.

HARDWARE RETAILING | August 2016

Upcoming Events August 18-20 Ace Hardware Fall 2016 Convention & Exhibits Chicago

25-27 Orgill, Inc. Fall Dealer Market Las Vegas

September 9-11 Horizon Distribution, Inc. HDI Annual Conference & Trade Show EXPO Yakima, Washington

15-17 Blish-Mize 2016 Fall Market Overland Park, Kansas

16-18 True Value Fall Reunion Denver

18-20 Home Hardware Fall Dealer Market St. Jacobs, Ontario

October 7-10 Do it Best Fall Market Indianapolis

12-14 Wallace Hardware Co., Inc., Fall Dealer Market Pigeon Forge, Tennessee

20-22 House-Hasson Fall Dealer Market Sevierville, Tennessee

Find more details about these events and others online at TheRedT.com/calendar. To have your event added, contact Kate Klein at kklein@nrha.org.

Newsmakers

Walmart Ends Price Matching Program

Home Depot Sues Credit Card Companies Over Chips

In-store price matching from ads is now a thing of the past for Walmart shoppers. Previously, customers could present a competitor’s printed ad that showed a lower product price in order to get a discount at checkout. In place of the program, Walmart is launching “long-term price rollbacks” on products and sending customers to its app. TheRedT.com/price-match

Banks continue rolling out new microchip-embedded debit and credit cards, which are supposed to be more secure against fraud than cards that are authenticated with signatures only. But Home Depot, in a recently filed lawsuit, says Visa and MasterCard aren’t making transactions as secure as they should and are working with banks to create chip debit and credit cards that are expensive for retailers. TheRedT.com/hd-lawsuit

Are Regulations Impeding Your Growth? New and complex government regulations—especially rules connected to taxes, health care and employee safety—can discourage small business growth and entrepreneurship, according to new data from the National Retail Federation. TheRedT.com/regulations

After Arson, Past NRHA Chairman’s Store a ‘Total Loss’ Arsonists recently set a fire that destroyed Valley Supply Hardware’s building and its contents. No one was injured by the early morning blaze. The Rising Sun, Indiana, store belongs to Gary and Judy Copeland, who are active in the North American

Retail Hardware Association (NRHA). Gary was a member of the NRHA board of directors for several years, and his one-year term as board chairman ended in 2015. “It is a total loss. Everything is gone–computers, telephones, inventory,” co-owner Judy Copeland says. TheRedT.com/arson-valley-supply

Hardware Store Unites Businesses After Orlando Shooting On June 12, Walter Toole woke up early for work, unaware that a gunman had gone on a shooting rampage a few blocks from a hardware store he owns in Orlando, Florida. In the aftermath of the tragedy, Toole decided to keep the store open even though roads were closed due to the shooting. The store partnered with other local businesses to provide food and drinks to first responders. TheRedT.com/orlando-shooting

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Retailers Seek Opportunities at United Hardware Market Retailers hit the floor of the 2016 United Hardware June Buying Market, looking for promotional items, new categories and a strong start to the second half of the year. New items could be seen in vendor booths, and the market had a prominent area dedicated to grills, smokers and cooking and grilling accessories. TheRedT.com/united-market-june

Banks Pushing to Increase Debit Card Swipe Fees Banks are pushing to change a cap on debit card swipe fees that the Federal Reserve implemented in 2011. Swipe fees make up a portion of the purchase price that banks charge retailers to process a credit or debit card transaction—a fee passed on to consumers in retail pricing, according to the National Retail Federation. TheRedT.com/swipe-fees

CANADA Lowe’s Execs Visit Ace Canada HQ, Affirm Support Lowe’s is best known for its big boxes, so its commitment to the smaller stores it now owns and serves, through the acquisition of RONA, has come into question. However, a tour in early June by Lowe’s executives to affiliated RONA dealers and corporate store managers throughout western Canada affirmed that commitment.

Quebec Store Reopens Under TIMBER MART Amidst a series of major upheavals to the retail landscape in Quebec, the battle for independent dealers continues. Centre de rénovation J.R. Roy has opened its doors to a newly renovated and re-merchandised 5,800-square-foot store in Lac-Etchemin, Quebec.

Home Hardware Highly Regarded Canadian Company Home Hardware has been ranked as one of the most highly regarded companies in Canada, according to an annual study by Reputation Institute. The 2016 Canada RepTrak 50 grades companies based on some 40,000 ratings collected from Canadians.

BMR Has Investment Plan That Begins in Beloeil, Quebec Groupe BMR has made clear its mandate to grow its business under the direction of Pierre Nolet, the newly appointed senior director of business development. Based on its latest investment initiative, that growth strategy will include corporate stores, as well as independent member-dealers. For the full story of each of these briefs, visit hardlines.ca/hardwareretailing.

AD INDEX Ajax Wire Specialty Co.............................................72 www.ajaxwire.com; 855-966-2529

Gojo Industries Inc...................................................76 www.GOJO.com; 800-321-9647

Quikrete......................................................................21 www.quikrete.com; 404-634-9100

Apex Tool Group ........................................................5 www.apextoolgroup.com; 410-773-7800

Hardware Retailing Mobile App .................................83 www.hardwareretailing.com/hr-mobile

Red Lion ..................................................................57 www.redlionproducts.com; 844-250-4981

Benjamin Moore & Co. ..............................................9 www.benjaminmoore.com; 855-724-6802

Hestra JOB USA.........................................................75 www.hestrajobusa.com; 888-939-9969

Sakrete.....................................................................11 www.sakrete.com; 866-725-7383

Big Green Egg ............................................................51 www.biggreenegg.com; 770-934-5300

HSI...........................................................................17 www.hardwaresuppliers.com; 800-334-5625

Sashco ................................................................... IFC www.sashco.com; 800-767-5656

Bonide ........................................................................79 www.bonide.com; 315-736-8231

IPG.................................................................Belly Band www.itape.com; 888-898-7834

Saunders Midwest LLC .................................................. 81 www.saundersmidwest.com; 312-372-3690

Caterpillar............................................................12-13 www.cat.com; 888-614-4328

K-CO Products, LLC ..................................................BC www.kco-products.com; 949-276-5252

Sears Hometown Store ...........................................32 www.ownasearsstore.com

Centurion ....................................................................73 www.centurion-inc.com; 800-323-2193

Magna Industries Inc..................................................55 www.magna-insto.com; 800-969-3334

Simpson Strong-Tie Co. Inc. ....................................49 www.strongtie.com; 800-999-5099

Channellock Inc..........................................................1 www.channellock.com; 800-724-3018

Master Magnetics Inc. ...............................................56 www.magnetsource.com; 888-293-9190

Stihl..........................................................................69 www.stihlusa.com; 757-486-9100

Char-Broil ....................................................................71 www.charbroil.com; 866-239-6777

Midwest Fastener...............................................34-35 www.fastenerconnection.com; 800-444-7313

Sun Gro Horticulture ................................................77 www.blackgold.bz; 800-732-8667

Cole’s Wild Bird Products Co...................................37 www.coleswildbird.com; 877-426-8882

Motorola .....................................................................39 www.acsradios.com; 800-248-5391

Sunnyside Corporation.............................................40 www.sunnysidecorp.com; 800-323-8611

Compass Minerals ........................................................ 7 www.compassminerals.com; 913-344-9216

Nite Ize Inc....................................................................... 43 www.niteize.com; 800-678-6483

Top Notch Distributors Inc.......................................41 www.topnotchinc.com; 800-233-4210

Convenience Products ...............................................18 www.touchnfoam.com; 800-325-6180

NRHA Training Resources .......................................... 84 www.nrha.org/freetraining; 800-772-4424

True Value Company................................................15 www.truevaluecompany.com; 888-291-7229

Delta Faucet Company.............................................30 www.deltafaucet.com; 1--800--345--3358

Old Masters .............................................................78 www.myoldmasters.com; 800-747-3436

TubShroom ..............................................................72 www.tubshroom.com; 887-303-1001

Do it Best Corp. .........................................................3 www.independentsdoitbest.com; 888-364-8237

Orgill Inc. .......................................................... 88-IBC www.orgill.com; 800-347-2860

UGL ............................................................................19 www.ugl.com; 800-845-5227

Duckback ....................................................................20 www.superdeck.com; 800-825-5382

Pacsoft.....................................................................80 www.pacsoft.com; 800-554-6166

USP Structural Connectors/MiTek ...........................23 www.USPconnectors.com; 800-328-5934

ECI Software Solutions ..............................................53 www.ecisolutions.com; 800-588-5128

Paladin Data Corp. ...................................................27 www.paladinpointofsale.com; 800-725-2346

Wallace Hardware Co. .............................................70 www.wallacehardware.com; 800-776-0976

Epicor Software Corp. ................................................59 www.epicor.com; 888-463-4700

Pennsylvania Lumbermens Mutual Ins. Co..............42 www.plmilm.com; 800-752-1895

Wayne Water Systems ..............................................74 www.waynepumps.com; 800-237-0987

EZ Lawn and Garden ...............................................26 www.ezlawnandgarden.com; 781-413-3079

Phifer Inc. ...................................................................47 www.phifer.com; 800-841-9473

Westinghouse ......................................................29, 31 www.westpropower.com; 262-522-1450

Franmar ......................................................................28 www.franmar.com; 800-538-5069

Prosource.................................................................54 www.franchiseprosourcewholesale.com; 314-506-0078

Whink Products Company..........................................33 www.whink.com; 800-247-5102

*This index is provided for the convenience of our advertisers and readers. The Publisher assumes no liability for errors or omissions.

August 2016 | HARDWARE RETAILING

Last Word

STEPS to Create a Fairy Garden Project

he Hardware Retailing team is always on the lookout for trends that can help retailers drive traffic. In this month’s issue, we highlight four unique niches found in the lawn and garden category, including the growing trend of putting together fairy gardens, which are indoor and outdoor miniature gardens with plants and tiny figurines. If you decide to try this niche, consider creating your own fairy garden to display the products you sell and inspire your customers to give the hobby a try. Hardware Retailing staffers stopped by Sullivan Hardware & Garden in Indianapolis to get some tips on fairy gardening and buy greenery, potting soil and other products needed for the project. Follow the steps on these pages to see the project from start to finish.

Step 2—Fill Containers Once you have collected your pots, plants and accessories, pour potting mix into the containers you’d like to use. We used a clay pot, a plastic pot and a large teacup, but feel free to be creative with other options, such as birdbaths, barrels and old wagons.

Step 1—Gather Items Gather all of the items you need for your tiny garden, such as flower pots, potting mix, gardening gloves, plants and, of course, fairies. We used fairy homes and other accessories contributed by Georgetown Home & Garden, a manufacturer that creates a wide assortment of detailed fairy garden products. Accessories you sell could include mini houses, water features, benches and figurines.

Step 3—Plant the Greenery Next, take a look at the live plants you have and position them where you’d like them in the containers. Keep in mind where you want to place your largest fairy accessories so that your containers will have space for them and you won’t need to uproot any plants.

HARDWARE RETAILING | August 2016

Step 4—Prioritize Larger Items

Step 6—Add Pizzazz

Once you’ve put your plants where you want them, add in larger accessories. For our project, we had two miniature homes and a waterfall.

We incorporated a waterfall with a pump mechanism and running water into our garden. If you decide to add a plug-in water element, read the instructions to set it up correctly. We also added jewels for a pop of water-blue color to go along with the waterfall, and a fairy boat.

4 Step 5—Insert Little Details

Step 7—Make Final Touches

Once your larger items and plants are in place, you get to have fun with the smallest details. Add little accessories, such as a pathway to the house, miniature lanterns and tiny garden gnomes.

Give your fairy garden project finishing touches. You may also want to spritz the live plants with a spray bottle of water. Misting the plants to water them will prevent you from washing away any fairy landscaping.

7 Step 8—Enjoy the View

When we finished arranging our gardens in the flower pots and teacup, we turned on the waterfall pump and enjoyed our whimsical creation. You should take time with your employees to enjoy the view, too. When your fairy garden is done, place it in a prominent location within your store to give your customers project ideas. Assign an employee the task of watering the plants. You may also want to add or change out accessories to showcase seasonal items or new products throughout the year.

August 2016 | HARDWARE RETAILING

“We were working on improving our margins, and we decided Orgill would give us a better opportunity to do that.” —Roy Mason, Vice President and Manager, Race Brothers Farm & Home Supply, Missouri

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