A “Hardware Village” Evolves…

Hardware & General’s multi-store business in Brookvale, Sydney, now comprises 15 separate retail outlets – and this “hardware village” is growing…
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Store: Hardware & General, Brookvale Store, NSW
Owners: MacGregor family
Group: NBSG, Plumbing Plus and others
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There is something satisfyingly organic about the way Hardware & General has developed its operations in the northern Sydney suburb of Brookvale.

There are now 15 separate properties at Hardware & General’s Brookvale site – the photo shows three of them: Bathroom Fittings, Plumbing Supplies and Kitchen Appliances

Think of cells dividing under a microscope and you will have some idea of how the business has grown since the opening of the original Brookvale store in 1960. New neighbouring or proximate premises have been absorbed into the business over time – to the point where there are now 15 self-contained outlets spread over two blocks on both sides of Winbourne Road. On a mud map the business looks like a growing zygote; up close it resembles a hardware village supplying practically every type of hardware product imaginable to clients from all over northern Sydney.

Each outlet is dedicated to one or two specialised hardware departments, producing an aggregate turnover of $60 million: not bad for a family-owned retail business that started 45 years ago.

Managing Director, Philip MacGregor, says the 205-employee enterprise began when his father Walter purchased the first store on the corner of Pittwater and Winbourne Roads.

“In those days the business had six employees and it just grew from there,” says Philip. “Winbourne Road was regarded as a traditional, older industrial suburb of little factories, and over the years we’ve changed its flavour to a more retail hardware strip.”

In 1961 the company purchased a site several doors down from the main store, and subsequent properties in the strip have been purchased or leased every couple of years as they have become available.

“We own about two thirds of the properties, which has been very important for security of tenure,” says Philip. “Our stores are dotted amongst other businesses like outlets for auto tyres, auto spare parts and panel beating.”

With each new addition to the property portfolio different facets of the hardware business have been given their own headquarters. First there was a purpose-run Building and Plumbing outlet, opened in 1964, then a Bathroom, Kitchen and Appliances store in 1965. Today, single outlets are devoted to niche departments such as Taps; Locks, Doors & Windows; Timber; Concrete; Hot Water; Sheet Materials; Roofing; etc. About a third of all product sold is sourced from NBSG, while Plumbing Plus supplies another third of stock. Additional goods are supplied by 3D Paint Stores and Industrial Supply Group.

Consolidate?
“A lot of people have asked why we never consolidated everything into one large site,” says Philip, “but you grow according to the resources at your disposal. We have tried to take it one step at a time. Certainly, we have to manage 15 separate loading docks and displays, but the upside is that we are also spreading any congestion over a big area.”

A delivery truck is loaded in the Sheet Metals store at 85 Winbourne RdAHJretail03April05

Some attempt at consolidation is currently underway following the purchase of 38 Winbourne Road, which is currently undergoing construction works for a three-department, 69-vehicle carpark building. And similar amalgamations have occurred in the past: in 2003, for instance, separate Doors and Locks departments were merged, and later this year Power Tools and Industrial Engineering will be conjoined under one roof. Nevertheless, the overall policy of granting autonomy to specialised departments seems entrenched. For every consolidation there have been numerous separations of departments into more refined sectors, as happened in 1999 when Plywood was removed from the Timberyard and given its own space.

“The big advantage of having many stores is that all our staff are specialised,” explains Philip. “Our client base is 70% Trade and we have a large number of customers who visit all our outlets on the one account, and the people behind the counter really need to know what they’re talking about. There are always questions to answer. The other advantage is that a tradesman can bring a customer to a specific store – say, Bathroom Fittings – and inspect a display for a project. Our display areas are all fresh and clean.”

H&G Directors Philip, Walter, Geoffrey and Peter MacGregor

Another reason why consolidation never occurred relates to information management.

“We never considered consolidation because we were dealing with mainly manual systems, with handwritten price lists for each store and each one managed differently,” says Philip. While a new centralised computer system has streamlined these processes in recent years, the client preference for individual treatment still dictates the separateness of departments.

Expansion

The Locks, Doors & Windows store at 75 Winbourne Rd – stunning

Nine years ago the family began to expand its operations by opening new stores in other parts of Sydney, and there are now significant outlets in Marayong, Mona Vale and Peakhurst, bringing total group turnover to $85 million.

Philip says Hardware & General runs its own advertising department, has its own team of sales reps and takes great pride in its high-quality staff. Promotions include an annual Birthday sale, which includes a 72-page colour insert in the Manly Daily and other community papers.

The Tap Shop at 70 Winbourne Rd features an outstanding showroom

As a business success story, Hardware & General has few rivals. It has expanded organically rather than aiming for the stars overnight, and its client base is loyal, professional and specialised. The company has kept control of its own inventory and marketing policies and, it must be said, used its self-management expertise to amass sizeable property holdings.

“It is possible to do well as an independent,” says Philip.

By John Power