Hardware Retailing The Industry's Source for Insights and Information
In early July, House-Hasson finalized the acquisition of former Midwestern U.S. wholesale hardware distributor Bostwick-Braun’s warehouses and inventory. The acquisition adds two warehouses in Indiana and Arkansas, as well as more than 45,000 stock keeping units (SKU) to its existing 55,000 SKU inventory. Steve Henry, House-Hasson president and CEO, shared with Hardware Retailing how the acquisition fits into the company’s growth strategy and will benefit all its members.
Hardware Retailing (HR): How did the Bostwick-Braun deal come together?
Steve Henry (SH): The Bostwick-Braun deal fell into our lap as we were looking for a warehouse between Knoxville and Texas. Several years ago, we hired salespeople from a company that was struggling to stay in business, and at the time we hired them, we weren’t delivering in Texas, Louisiana and Arkansas. So for the past two or three years, we have been looking for a warehouse somewhere between Knoxville and Texas to be able to better service our dealers with more products in those states.
We looked at new warehouses, but they were really expensive, so we continued looking for a business that did what we do, and had all the infrastructure in place so we could guard against risk and stress. I was fortunate enough to hear from someone about Bostwick-Braun potentially being for sale. We reached out and were able to put that deal together.
HR: Why was the acquisition a good fit for House-Hasson’s growth strategy?
SH: I keep telling everybody that the icing on the cake was learning that Bostwick-Braun also had a warehouse in Ashley, Indiana. When we found out about the Ashley warehouse, even though that’s not an area we were looking in, we realized it would provide some new territories for us, because we don’t currently deliver in Indiana, Michigan, Illinois or Missouri, and now those areas are opened up through the purchase of that warehouse. Plus, we can now better service our dealers in Texas, Louisiana and Arkansas with the West Helena warehouse in Arkansas.
HR: How is the transition from Bostwick-Braun to House-Hasson going?
SH: It has been a lot of work, but we’re pushing through. We are receiving inventory in Ashley, and have done a little bit of shipping from there, but because inventory is down, it has been hard to ship. We’ve opened up around 350 new accounts that we’re currently shipping out of Prichard, West Virginia, and Knoxville, Tennessee, which requires more effort, but we will eventually be moving those accounts back to where they were originally shipped from. Our systems have been tested, and they’re working correctly. We’ve re-tagged the whole warehouse in both locations and are in the process of re-stocking both warehouses, so we’re in good shape.
HR: Along with expanding House-Hasson’s territory, what other benefits do you see coming from this acquisition?
SH: There are certain economies of scale that just work in business. The more you buy, the better deals you get. So if we’re buying products for four warehouses instead of two, our buying power is better. If we buy better, then we can sell better, which helps dealer profitability. We’re convinced that our business model of concentrating on dealer profitability is what has kept us around for 120 years. That’s our focus—when we help our dealers become profitable, then we do well. This acquisition will help us be more efficient in the way we deliver, because we’ll be able to move some of our truck routes around, and we’ll be able to respond quicker and offer a better product mix.
