in Providence.
As consolidation continues among paint and coatings manufacturers, a Providence
hardware store is reaping the rewards of building a unique, high-end paint brand
where a single store owner’s voice can still carry weight in quality decisions.
Five years ago, faced with the consolidation of the Pratt & Lambert brand under the Sherwin-Williams umbrella, a handful of retailers were concerned about what was going to mean a major shrinkage within the channel of distribution on which they relied heavily.
Harry Adler, who runs Adler’s Hardware on Wickenden Street in Providence with his cousin, Marc, was among those retailers who sat down with a chemist in 1998 and formed the Coatings Alliance. Over the next two years, the group of independent paint dealers across the United States and Canada developed their own product, C2 Collections of Color.
Seifert Systems Invests in Energy Efficiency to Strengthen Operations
For manufacturers, energy is more than just another operating expense. It plays a critical role…
Learn More
The C2 brand was launched in seven retailers its first year. At the start of 2003, the alliance had 18 members representing 60 storefronts and will finish this year more than doubling their numbers with 40 members and nearly 100 storefronts. Adler said the hopes are for that number to double again in 2004.
When a business’ goal is not just “to survive, but thrive,” Adler said alliance members recognized that they needed a better product and better color displays, investments that would never be cost-effective for a normal, large-scale distributor.
“The question I get all the time is how we survive competing against Home Depot and Lowe’s,” said Adler, who will see his third-generation hardware store celebrate its 85th year in business in 2004. “Service is certainly a part of that equation, but you still need products,” he said.
According to a Credit Suisse First Boston industry report issued in December 2001, the number of paint manufacturers and producing facilities has been declining steadily since 1963, when an estimated 1,580 companies produced paint in about 1,800 plants. By 2000, estimates put those numbers at roughly 600 companies, operating in only 800 plants. The same report projected significant growth for the paint and coatings market through 2005.
Roger Bertrand, who has been running Roger’s Paint Service Store in West Warwick for the past 50 years, said as much as things have changed on the supply side of his business, they’ve stayed the same. While the big home-improvement operations and the Wal-Mart chains continue to open new locations throughout the state, Bertrand said he’s seen it before, back when Sears, Roebuck & Co. controlled the marketplace.
“Only the names have changed,” Bertrand said. “The stature of Wal-Mart is frightening – some suppliers can be out of business if they lose those big accounts and the consolidation of the paint business is still ongoing. We carry one brand and have been lucky in that it’s always been a good seller because it’s always stayed a good product.”
Paul Durfee, who runs Durfee’s Hardware in Cranston alongside his father, said there’s certainly been a lot of shifting in the paint industry over the last 10 years and chain competitors continue to affect every part of his operation. But like Adler and Bertrand, he said the key to the paint business is letting people know that while low prices are good, many times they result in extra labor.
Durfee said his store, started by his grandfather in 1930, is inherently different from the market that Adler’s and other alliance members are targeting.
“Adler’s has moved to the extreme end of paint sales,” said Durfee, who carries the True Value brand of paint. “They’re in a unique situation because of that East Side clientele who is looking for something unique and is willing to pay for that. My customers are just looking for the best paint for their dollar.”
As manufacturers have grown larger, Adler said they’ve naturally grown further away from the concerns of the customer. “There’s tons and tons of disadvantages to being so small,” Adler said. “But one advantage we have is in information. And we’ve actually found that feedback is pretty consistent from store to store.”
Without any set business model to follow, Adler said the Coatings Alliance has ended up doing a lot of things that are new to the industry.
C2 paint chips are mass-produced using actual paint (versus competitor’s cost-effective, ink-produced fandecks that vary in lighting) and also offer the 18-by-24-inch “Ultimate Paint Chip” to customers. It’s all part of the goal to endear their product to interior designers and architects who are willing to spend the extra money for a better product that leads to labor savings.
Next month, C2 will launch its new Foundation Primer to tackle what’s long been an industry-wide problem for customers looking to achieve a dark color without endless coats.
“We know it’s a problem, it’s our solution that’s unique,” Adler said. “Tackling primer problems is something that might not be economically feasible for big suppliers, but sometimes things are not as big a slice of the market because they don’t exist.”
There are 10 C2 dealers in New England, with the next closest location being family-owned Hubbard Paint & Supply Co., which has locations in Hyannis, South Dennis and Falmouth, Mass.
Steve Hubbard’s father started the business in 1957 and the locations have been selling C2 for the past year and a half after hearing about the line indirectly through a friend. Hubbard’s paint and wallpaper stores carry two brands of paint, not wanting to put all their eggs in one basket.
Hubbard said he’s found C2 to be a word-of-mouth product and has seen sales almost double in recent months, while he doesn’t expect that level of growth to continue, he’ll be happy to see his expectations of 20 percent to 30 percent increases in the next few years.
“There’s hurdles whenever you start a new company,” Hubbard said. “But this has certainly generated an amount of buzz and opened some eyes and turned some heads in the business.”
Like Hubbard, dealers can buy into the company over a five-year period and have a vested interest in building the brand. Adler said two recruiting agents regularly travel around the country, talking to prospects with higher-end customers and that a store in the Watch Hill area is in discussions. The group is also in very early talks with the independently owned Ace Hardware stores.
“There’s been an ongoing debate for years between distributors and retailers,”
Adler said. “Products can be over-manufactured, and in this model there’s less
distribution by design. … And when you’re building a brand in the marketplace
while securing your own future, there’s a sense of personal satisfaction reflected
in the product. Our customers sense that and are loyal to what’s a great product.”
