Second Store: First-Rate Idea

There are two ways to enlarge a hardware business – expand the existing store until it bursts at the seams, or start a new store in virgin territory. Brims Builders Hardware in NSW has chosen the latter option…

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Store:Brims Builders Hardware, Billinudgel, NSW
Owners: Brims family
Group: Buyers Independent Group Australia P-L (BIGA)

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Regional hardware businesses are part of the landscape. They are highly tuned to local demographics, and any changes to the status quo can quickly alienate a fickle clientele. So, when the time comes to expand a business, it makes sense to leave existing operations alone – and use a brand new second store to establish new markets and increase turnover. Existing loyal clients at the primary store will be unaffected, while a fresh crop of “second-generation” customers will be delighted to welcome and support the new arrival. That’s the theory behind Brims’ new foray into the town of Billinudgel, which is about 20 minutes’ drive from the company’s base store in Tweed Heads.

Timber at Billinudgel – an important part of the business

Director Mark Gilles says the Tweed Heads store started about eight years ago and quickly gained a reputation for high-quality service to trade clients. About 85% of turnover there is trade-based. “But we saw an opportunity for expansion into more general hardware at the new store in areas like plumbing, which we’ve never had before,” says Mark.

Rather than relocate the Tweed Heads store to a larger site and create a “superstore”, Mark says the decision was made to leave the existing premises untouched and set up a new store in Billinudgel, closer to the coast and in the heartland of a belt of renovation activity. This arrangement means the new store can be tailored to address the needs of not only trade clients, but also a larger consumer/DIY market. “I’d estimate the Billinudgel store will have a mix of about 50–60% trade,” Mark explains.

The new Billinudgel store

The new store opened for business in mid-November and attracted about 700 people to the Opening Day festivities – not bad for a town of just a few hundred people, and reflective of the broader catchment area it will service. With 300m2 of floor space and another 800m2 devoted to a timber yard, the site is near a new freeway extension that makes it attractive to customers as far afield as Byron Bay and Ocean Shores. Live radio broadcasts, free jumping castle activities and product giveaways involving a local charity all added to the occasion and reinforced the community values of the store. Reps from key supplier firms like Smorgon ARC also streamlined the event. Mark says he anticipates a need for four full-time employees and a couple of casuals within six months.

Retail Challenge

Darren Gray, Store Manager at Billinudgel

Coming to grips with a more “retail” emphasis in the Billinudgel store is the main challenge facing the Brims team. According to Mark, the prospect of joining a retail-focused group was not an option because of Brims’ long-standing agreements with numerous loyal suppliers, many of whom do not have distribution agreements with certain groups. Therefore, in a bid to maintain steady relationships with faithful suppliers, the new store has retained its “independent” status. Notwithstanding this, Mark says he wanted the buying power that a group can deliver – hence the move to join the BIGA stable. “I liked the fact that it’s not the biggest group out there,” says Mark. “I’m a fairly black-and-white bloke and I had a very direct and clear conversation with Mario Arcidiacono, National Manager of BIGA. He said what the group could and couldn’t do for us and I liked the fact that there was no mucking around. I also liked their strong plumbing affiliations with suppliers. As an independent I am able to have a say in the future directions of the group, and it’s also very important to my business that all rebates are paid back to us.”

Promotions
“Marketing is always an ‘interesting’ element of independent store operations,” says Mark, “and through BIGA we can obtain this; the group believes strongly in marketing the member store over any group promotions.”

The store layout at Tweed Heads is trade-friendly

Brims also has a range of ways of attracting tradespeople to the store, details of which are not yet available. The result, says Mark, will be a store that hopefully appeals in equal measure to DIY consumers as well as trade customers. Delivery services and trade-friendly opening hours will be fundamental instruments of success.

The store layout at Tweed Heads is trade-friendly

“A lot of our sales are delivered, so we run an extensive fleet of delivery vehicles which include a semi-crane truck, tabletop crane truck, two seven-metre delivery trucks and several utes,” says Mark. “The other point of difference between us and some of our competitors is that our stores are open and trading at 6.30am. When you’re dealing with tradespeople who want to get to site and start working at 7am this can be an invaluable service.”

Mark says this is an exciting time to be broadening operations, particularly in light of local renovation works and influxes of “seachange” retirees into northern NSW. If all goes well with the new store, the feasibility of further store openings will be assessed. In the meantime, initial sales figures from the Billinudgel store bode well for ongoing business expansion.

By John Power