Getting match fit for Sapphire

Getting match fit for Sapphire

Store name: TM&H Home Timber & Hardware 
Store owners: Jeffrey Hitchins (Director), James Hitchins (Director & Jeff’s son) and David Gorman (Director)
Buying group: Independent Hardware Group (IHG)

TMH Home Timber Hardware<br>

After 30 years of successful trade, TM&H Home Timber & Hardware is embarking on a significant business transformation, putting faith in Mitre 10’s Sapphire program to take the Gippsland store to the next level. 

As part of the ‘Sapphire’ journey, the Hitchins family have embraced the ranging, operations and business review program whole-heartedly to ensure both the team and the business itself is match fit before the 10-week in-store transformation begins. With completion planned by mid next year, the refurbishment will include a new drive-through ‘Sapphire Standard’ Mitre 10 Trade Centre, located on a separate three-acre site.

Part owner and company founder, Jeffrey Hitchins, said although the store has come a long way since it was founded in central Moe, Victoria, in 1988, now is the perfect time to implement a major refurbishment and ensure the business stays ahead of its competition for years to come.

A proud family business L to R Lynne and Jeff Hitchins and the next generation Laura Town and James Hitchins<br>

Year of success

Jeff initially began working in the business in 1971 as a clerk aged just 17, when the store was the Moe Co Op, before heading to night school to complete his business studies. Between 1983 and 1988, the store was a Home Saver store, which is also when Jeff worked his way up to store manager, aged 25. In 1988 Jeff went on to co-purchase the business, and the store changed to TM&H, named after the new joint family owners Tait, Morrow and Hitchins. The family joined Home Timber & Hardware as a foundation member in 1993. David Gormon, who previously worked in the Moe Co-op with wife Jodie, also bought a stake in TM&H in 2000, and David remains an active Director today, overseeing the weekend retail business.

“When we took over the store there were only 14 people working for us. We continued to grow the business through excellent customer service and completing several relays. It is now quite a substantial operation with over 45 staff on the books, including seven family members,” Jeff said.

As the business grew, the store began to run out of storage space, particularly for its expanding trade offer. A decision to purchase an additional three-acre storage facility (170 Waterloo Road) for the purpose of storing heavy building products, has proven to be the right move, enabling the business to progress with plans for a standalone Trade Centre that can service the growing Latrobe Valley housing and renovations market.

Although the store currently boasts a 45 per cent DIY and 55 per cent trade sales split, Jeff believes this will transition to a 50/50 ratio once the Mitre 10 Sapphire program is implemented.

“We will always maintain a good mix of DIY retail but we believe IHG’s strength in trade will help us grow and establish long-term viability in a competitive market,” Jeff added.

Community focused approach

Having ‘family owned and operated’ roots has been central to the Moe business’ success.  Jeff’s daughter, Laura Town, has worked in the promotions and purchasing department for 13 years, while his son James has stepped up to manage the trade department for the last five years, after working in the business for a decade. James is keen to further develop the business alongside Laura in the future, which gives the business the perfect succession plan, according to Jeff.

Laura believes the store’s point of difference comes from its commitment to support the local community, ensuring it stands out from competitors.

“We have a very strong connection to the township because we not only run a lot of promotional and fundraising events with our customers, but we also sponsor many local football clubs. One of our major fundraisers is the ‘Biggest Morning Tea’, raising money for the Australian Cancer Council. The event has grown substantially over the years and this year was one of our best events, raising $4000. The community is fantastic how they just jump onboard. We have found that if we support them, they will support us,” Laura said.

TM&H also run annual ‘ladies nights’ which include demonstrations and giveaways. The events attract good support from suppliers and are seen as major relationship-builders for the business, regularly selling out and being talked about by locals for weeks afterwards. 

Another strength is its ‘same-day delivery’ service for trade customers, which has proven to be extremely popular over the years.

“The same-day service is a real plus for us because it declares we are committed to meeting local builders’ needs in a very short space of time. It can put us under pressure at times, but in the end the sales result speaks for itself and we now have four delivery trucks servicing the Latrobe Valley.”

“It is important we continue to run this service because the city of Moe does not sustain our business alone. We need to go far and wide, which is why the same-day delivery has made a big difference to our business,” Jeff said.

Future proofing under Sapphire 

While Jeff said the family always had plans to redevelop the 2000 square metre store (not including the off-site storage area) to keep ahead of the competition, he believes investing in the Mitre 10 Sapphire transformation program will deliver the best customer offer for their area and “future proof the business for the long term”. 

TMH has an extensive Stihl dealership and repairs as part of the local offer<br>

“As independent retailers much of what we know and do is self-taught, so to have the support from IHG to develop a long-term structural plan for the business, alongside all the ranging, store design and refurbishment support, will definitely help us become a far more efficient business.”

“We could have easily just re-branded the building to Mitre 10 but we wanted to do the job properly. The Sapphire program will cement our store for the future against our major competition and enable us to become the preferred supplier for the Latrobe Valley and greater Gippsland,” Jeff said.

“IHG has a strong commitment to the independent stores and we have security in knowing they have our best interests at heart. We firmly believe the growth in our industry lies within the Sapphire program and IHG are building a solid foundation for all independents to survive and remain relevant in the hardware game. We all compete against the formidable corporate Green Box so it is incumbent upon us to act as a group and collectively deliver the best experience for home improvement customers.” 

“We are so appreciative of the support we get from the group. It is no good chasing extra sales if you do not have the right structure to handle growth. This is also why we did not want to simply do a ‘paint up’. We have visited numerous stores that have gone through the Sapphire process and they are doing very, very well, most with double-digit growth. The owners and staff cannot speak highly enough of the program,” he said.

Planned changes

Transitioning the store to a Mitre 10 Sapphire model will not only see a major refurbishment to the TM&H Home Timber & Hardware retail site, but will also include a new drive-through Trade Centre constructed at the store’s current timber storage area. This will free up enough room at the retail site to allow room for a new nursery, according to Laura.  

“There is currently no nursery available in town at all, which is why it is so important to us to build a garden centre as part of the Sapphire program. We often place all of our plants and seedlings at the front of the store and whenever the weekend comes, we are always asked ‘where’s the rest of the nursery?’ It will certainly be a welcomed offer once it is complete,” she said.

Business health check

The process of implementing the major changes has been well executed thus far according to Jeff, who said early preparations stemmed from a three-day business planning session where an honest assessment of the business was undertaken.

TMH has taken a proactive approach converting departments progressively to IHGs shopper led range<br>

“IHG has a proven model under Sapphire but the planning days prove it is not a cookie-cutter approach. They take a long-term view to understand your business strategy, to leverage your strengths, fix weakness and identify growth opportunities specific for
your business.” 

“We assessed our store from its heart, including operational procedures, organisational structure, team culture and talent. We are already seeing positive outcomes. Our team have eagerly come on board and understand their role in the long-term plan,” Jeff said.

From a ranging perspective, TM&H has taken a proactive approach before the in-store transition begins, converting departments progressively to IHG’s shopper-led range in the early days.  

“This means there is not as much pressure to clear the non-core ranges during the relay period. We began the reset some months ago which has allowed the clearance to be more organic over time and far less disruptive to our customers,” Jeff said.   

While the refurbished store will only see a slight increase in the 20,000 SKUs already available, Jeff said the primary plan is to ensure ranges become more aligned to what the customer wants. 

TMH has received plenty of positive customer feedback on the new range the store is now stocking<br>

“We have always been strong supporters of the IHG recommended range but scan data analysis through IHG has helped us to assess the success of SKUs and categories. We have had lots of customer feedback on the new brands and ranges we are stocking. This gives us confidence that we are on the right path for success, and that the investment will end up delivering the best commercial results for years to come,” Jeff said.

Trading during renovations

Jeff believes the key to undertaking the renovations without disturbing the current customer base too much, is to move very quickly.

“I have spoken to other stores and they said an average Sapphire project is 30 weeks, with an eight to 10 week in-store transition. It is an enormous program but IHG are very professional when it comes to implementing the changes required with minimal customer impact. Once the Sapphire transformation is complete, we have forecast a sales uplift of 10 per cent ongoing, which I am very happy with,” Jeff said.

One of the priority jobs that needs to be undertaken throughout the transformation, according to Laura, is ensuring customers remain well informed.

Once the Sapphire program is complete TMH has a forecast sales lift of 10 per cent ongoing<br>

Laura said she would utilise the store’s popular Facebook page, which is the strongest medium of communication for the business, to keep customers across the changes and “bring them on this exciting journey with us.”

Solid business allows growth

Already boasting one of the largest ranges of timber and building supplies in the Latrobe Valley, the store has other points of difference, including a STIHL workshop and repairs, a Makita dealership, flooring display, sheds, a bathroom and kitchen display centre, as well as appliances
and whitegoods. 

With many awards under its belt, including 2013 VIC/TAS Trade Store of the Year, 2016 Best Young Retailer – Laura Town, 2017 Federation Gippsland Business Awards Excellence in Retail, 2018 VIC/TAS HTH Store of the Year – Over 1,000m2, the upcoming transformation is set to be yet another milestone for TM&H and its local community.