Orgill Case Study | 1 Fairly isolated from any competition, the store performed well and saw significant growth over the years. It was affiliated with Ace Hardware, a national co-op, and in addition to a full drive-through lumber and building materials yard, the store stocked a complete range of core home improvement items on its 25,000-square-foot salesfloor. In addition to plumbing, electrical, lawn and garden, outdoor living, paint, workwear and hand and power tools, the store also offered a selection of premium brands, such as Big Green Egg, Stihl, Carhartt, Costa eyewear and more. Several years ago, owner Walter Morris Jr. began exploring options for transitioning out of the business. Eventually, he was connected with the team from Central Network Retail Group (CNRG) through a business broker he had hired to help him navigate his strategic options. After Morris and the CNRG team were introduced, both parties quickly saw that there was potential for CNRG to acquire the operation and make it a part of its group of stores that are part of the Home Hardware Center brand, which is based out of Natchez, Mississippi. In the midst of finalizing these arrangements, COVID-19 struck and created some challenges in finalizing the deal. Despite these obstacles, CNRG’s team developed an acquisition strategy that Morris Jr. felt was a fair deal and a good fit for his business, his employees and the community. After acquiring an already high-performing business with solid sales and growth, the CNRG team immediately began enacting a plan for incremental improvements to the operation. This plan covered different areas of the business, including merchandise mix, margin opportunities, pricing, creating buying efficiencies and addressing expenses. The CNRG team also worked to blend the H&M Lumber Company store into the existing Home Hardware Center brand— without losing the local feel and appeal that the business had established throughout the years. Since the acquisition, the store has prospered. Multiple changes and enhancements have been made to the assortment while still maintaining much of the product mix and local brand preferences that made it a community favorite. From a transition standpoint, Morris Jr. reports the process has been smooth and key employees that were with the business prior to the acquisition have remained aboard and are positive about the outlook of the company and its future as West Helena Home Hardware Center. From an operational standpoint, the location has emerged as one of the top-performing stores within the Home Hardware Center chain. The store was on track to post a sales increase during the most recent rolling 12-month period. During this same period, the store saw margin increase by 370 basis points. H&M Lumber Company was a 50+ year-old, family-owned home center serving the community of West Helena, Arkansas.
RkJQdWJsaXNoZXIy MjkzMjMw