There is an element of risk when merging a 60-year-old business with another that has serviced the same region for 160 years. But for the staff and customers of Belmont Timber, the union of this large-scale timber operation with the Fagg’s Mitre 10 Group in 2017, has helped position it as a leading builder and renovator destination.
Business: Belmont Timber Mitre 10 Trade Centre
Owner/s: Fagg family
Location: Geelong, Victoria
Buying Group: IHG (Independent Hardware Group)
Measuring over half the size of a suburban block, Belmont Timber is one of the largest timber merchants in the country by footprint and sales volume. It not only acts as a major supply hub for trade customers but also supports other independents in the region who tap into the buying and distribution channels of Belmont Timber, particularly timber buys.
General Manager, Andrew Pitman, who was appointed into the leadership position in 2018, says the integration of Belmont Timber into the group was relatively swift but it has struck the right balance of respect for heritage and the need to stay ahead of the competition.
“The Fagg’s business has origins dating back to the 1850s which makes it the eighth oldest family business in Australia. When Belmont joined the group, we were very cognisant of the heritage of Belmont Timber as a standalone brand, and continue to take our role of custodians of that brand very seriously. We see it as a privilege to have Belmont as part of the broader Fagg’s family,” Andrews said.
Since Fagg’s Mitre 10 acquired Belmont Timber, Andrew says there has been quite a lot of change but “we are still very much a family-fronted group led by Barry and Keith Fagg who are synonymous with the Geelong area.”
One of the more visible changes in the last 18 months has been the upgrade to the Mitre 10 Trade Centre, bringing the branding in line with the Fagg’s other three stores in South Geelong, Wallington and Torquay. The introduction of a Design 10 showroom and consultation service into the Belmont location has further extended the trade offer.
“Painting the Belmont site was a major investment simply due to the sheer size and scale of the property but the exposure of the Mitre 10 trade brand to passing traffic is enormous. Now with the introduction of Design 10 we are expanding our customer reach even further,” Andrew said.
After the re-branding of the Belmont site was complete, there was also a re-structuring of the management team with Andrew describing it as “an evolution in streamlining the business into pillars”.
“Jules McDowall, who has been with the Fagg’s business for over a decade and comes with an extensive interior design and renovating background, was appointed to oversee the delivery of Design 10. Then we have Paul Bordonaro who looks after the overall operations of the total Belmont business, both retail and trade, where previously we had one trade person and one retail person. We have also introduced a Group Trade Sales Manager, John Sinclair, and a team of people to help facilitate the sales and face-to-face meetings with our builder customers. This is also why we have recently implemented a call centre, with a trade hub at Belmont Timber which we have built up over the last three years,” Andrew said.
“This looks like any normal call centre with staff with head-sets on in front of computers taking orders and it is quite a departure from what was done previously. There is a portfolio of guys who look after trade accounts and we also have five trade account managers out on the road with the call centre supporting them. This allows our customer’s builders to ring in and talk to a person in the call centre that is affiliated with one of the trade account managers,” he said.
The combination of the trade offer alongside the rebranding and the investment in its people, has seen the business achieve 30 per cent growth in volume, particularly with the store undertaking a complete change in its trade offer.
Rivalling some of the heaviest concentration of competition anywhere in Australia, the Belmont store currently goes head-to-head with numerous high-profile trade businesses.
“We co-exist with many worthy competitors including Bowens, Calco, Barwon Timber, MB Pre-Fab, all large-scale operations within just a few blocks of each other. Bunnings of course are here, over-represented as usual with four stores in the area. We have not only held our own in this environment but grown the business substantially. The housing growth in the Geelong region has been considerable, particularly in the last 18 months with people relocating out of Melbourne and seeking that lifestyle change in regional Victoria,” Andrew said.
“Like most hardware stores, the retail side of our business grew astronomically during COVID, achieving a 40 per cent uplift across the business. We are seeing that retail come off a bit now as you can only paint your house once, but trade for us continues to grow and it is now about accessing timber to meet that demand. Things have picked up in the second half of the year in terms of sourcing product but it is still nowhere near where it needs to be.”
While Australia’s housing and renovation boom has been a sales blessing for trade businesses that have done it tough for a number of years, Andrew says timber supply is proving to be one of the most stressful consequences of the demand.
“In our business we have prioritised customers who have remained loyal to us, but this is difficult because like most timber merchants we have always been a company that has said ‘yes’ to everyone, but we have had to say ‘no’ just to preserve and share the product around,” he said.
It is one of many ongoing learning curves for Andrew and even as he draws on his extensive background in management roles in the oil industry, he says he is still learning new things despite having been in the industry for over three years.
Sapphire Trade Centre
While the store’s Group Operations Manager, Paul Bordonaro has only been with the business since January, he brings an impressive portfolio in his former roles at IHG where he drove the execution of the Sapphire transformation program nationally.
“I used to see about 20 to 30 stores every year and they are all different and you learn something new from every site. Fagg’s and Belmont Timber continue to stand out from their competitors because of how well the team knows the business and the products, and the excellent relationships they each have with our builders,” Paul said.
Paul said the recent transformation of the Belmont site to a Mitre 10 Trade Centre ensured the store’s offer reflected Mitre 10’s ‘whole of house’ credentials.
“It is not just about upgrading the signage, the paint and the counters, it is more of a holistic approach to the total customer offer and experience. We focused on really customising the range for reach and to suit the local Geelong market. That is what the Sapphire Program really is. The trade business here in Geelong might be different to a trade site on the other side of Australia which is why it is so important to get this reach right,” he said.
At this stage the trade business is operating with a ‘steady as it goes’ pace, according to Andrew who said it was important not to push the trade area too much because the store wants to service the existing customer base, rather than bring in new business, while focusing its marketing endeavors on Design 10.
While the store’s Design 10 showroom was only officially launched on the Belmont site in April this year, it forms part of IHG’s wider ‘whole of house’ strategy. Design 10 will eventually become an omni-channel solution for IHG with a complete online offer and ten showrooms around Australia by 2024.
Belmont is the second site to introduce the concept and it includes a tailored range of kitchens, bathrooms, flooring, doors, tapware and windows, a design and consultation service as well as supply and install arrangements to help meet the needs of local home owners.
Showroom Manager, Jules McDowall, said IHG worked closely with the Belmont team in terms of the branding and the new colour palette because “it is quite a departure from the traditional Mitre 10 brand”.
“The new showroom is quite a point-of-difference because it is such a bespoke, high-end offer. While Design 10 has really paid homage to the Mitre 10 brand and its heritage, we also need to present ourselves as something quite different in the market. We found through recent research with locals that, prior to their visit to the showroom, over 90 per cent of the respondents would not have considered Mitre 10 for the items they found at Design 10, which is incredible,” she said.
Within the Belmont store the showroom was born from an area that was originally a Tait Flooring display area and Hardings appliances showroom.
“Under the Design 10 brand, you now see a collaboration between Hardings supply of kitchen, bathroom and laundry front-of-wall products and a stunning Tait Flooring display area. We have also integrated some of the things Fagg’s Mitre 10 is already famous for, such as doors and door furniture, as well as Principal Kitchens creating a comprehensive whole of house offer,” she said
While Jules has worked with Fagg’s Mitre 10 for just on 10 years, heading up the selection centre at the Fagg’s main site at South Geelong for about five to six years ago, she said it has been a pleasure seeing Design 10 come to life.
“We have elevated the area to a beautiful, open, vast showroom where people can come in and pick everything that they need to get their new-build or renovation underway,” Jules said
“It is not only the builder and their clients visiting, but there is also what we call a retail client – an unexpected surprise to have come out of all of this. Since we have been advertising, we have welcomed many browsers who do not have an association with a builder. We then help these customers to specify their look and also get in touch with a tradesperson. It is now having a reverse affect – which is amazing considering we only officially launched in April and our socials only began in May.”
“For the amount of time that has passed we have actually gained a lot of ground and what we need to do is now capitalise on this and look at all the opportunities that are presenting themselves,” she said.
Design 10 also uses the the Mitre 10 Principal Kitchens range as the basis of a custom kitchen and laundry offer.
“We have already gained a significant reputation for thinking outside the flat pack box. We do this by customising our client designs with fresh thinking in terms of finishes, add-ons and unusual re-works on the cabinetry. We are currently doing a kitchen in Forrest in the Otways where we are swapping out some of the flat pack elements by using pressed tin as a splashback and timber cladding as an island back. The nett result will be a stunning kitchen, unique to that customer, at a fraction of the custom jobs,” Jules said.
‘Whole of house’ strategy
IHG’s ‘whole of house’ strategy remains a focus across its trade centres. According to Andrew, the strategy has seen better collaboration by IHG, stores and key suppliers to grow categories, helping to generate a greater share of wallet across the house build stages.
“Design 10 lends itself really well to pushing the whole of house strategy, particularly the opportunity for other IHG members who often do not have the space for a kitchen or bathroom display. They can now leverage our showroom space to walk their builders through and convert a sale,” says Andrew.
“Jules is now working closely with our trade account managers to do joint call outs to builders. The target audience for Design 10 is now quite widespread in that you have the renovators, builders, rebuilds, builder customers as well as designers and architects,” Andrew said.
“Design 10 is both a retail and trade offer but the retail customers who come in are looking for a whole solution. They want the installation, expertise, advice and supply of everything as well. This is also why we have a whole suite of installers and trades working with us so they can work with potential customers,” he said.
The trade customer base of the Belmont store is diverse, servicing volume builders all the way down to small-scale trades, according to Andrew.
“No matter the size of each builders’ business, we are encouraging everyone to use Design 10 and choose products for their customers because this is the biggest frustration for smaller builders, particularly when it comes to identifying the products that go inside the build. We are trying to take this pain away from them by our expert team,” he said.
“This way we can tailor packages for the builders and they can get back on the site and back to running their business. While Design 10 already has a huge flooring, cladding, doors, kitchens and bathrooms display, we also have the ability to refresh the display area and keep it current.”
“If we do not have a product that a customer wants on display, Jules takes the customer over to the interactive touch screen at the consultation desk and takes them through the products in real size on the screen, as it would appear in their home.
Moving forward there is plenty more upside and growth to come for the Fagg’s Mitre 10 and Belmont Timber businesses, Andrew said.
“We will be upgrading our Wallington and Torquay stores as both are in real growth areas for us, we will be installing a café at South Geelong and we will continue to refresh the Belmont site as part of the ongoing evolution of the Mitre 10 Sapphire elements.”
Andrew is quick to point out, however, its growth will not be at the expense of other IHG members in our region.
“Barry and Keith, being long time members of the Mitre 10 brand, understand what it is to support the wider group, and ensure the sale stays within the collective IHG network. We are proud that Belmont Timber and Design 10, and indeed the whole Fagg’s business, can support other independents in the region as a hub and spoke service for timber and building materials as well as kitchen or bathware packages,”
“With the support of Barry and Keith, and backing of the IHG team, we see no limits to how we can continue to adapt and grow. With risk comes reward,” he said.