Expanding Your Showroom During a Recession

The natural response to a recession may be to avoid risk at all costs. Many kitchen and bath firm owners, facing financial uncertainty, are more likely to cut expenses and spend conservatively.

That strategy can be seen in hiring freezes and layoffs, advertising buys – and definitely in capital projects like showroom expansions. But a weak economy just might be the ideal time to expand your showroom.

Howard and Wayne Miller, owners of Hartville Hardware, a family-owned retailer in Hartville, OH, think so. In 2010, the brothers broke ground on a 280,000 sq.-ft. store that will include an expanded kitchen and bath design center. The new facility is scheduled to open in March, 2012.

No Time Like a Recession

Howard Miller knows the decision to embark on such a large project during the worst economy since the Great Depression goes against conventional wisdom. But he also knows that, with reduced costs of building materials and labor and, maybe most significantly, interest rates, there may be no time like a recession to upgrade his facilities.

Miller is one of a handful of kitchen and bath dealers who recently shared their reasons for pushing ahead with new showroom projects during scary economic times.

Another such dealership, the Ed Hines Company, a kitchen and bath specialist in Nixa, MO, is also making a change. Located in an industrial area, the company had always focused on serving building contractors and didn’t want retail business, according to owner John Hines. But with the tanking economy and the resulting trend away from using home contractors in favor of DIY projects, the firm rethought that strategy and is now building a retail showroom in Springfield, MO.

In Florida, PGT Cabinets, which operates a 39-year-old kitchen and bath showroom in Tampa, last year opened a second showroom just off of I-75 in Wesley Chapel. The project began in July, 2008 – just as the economy was tumbling. But it was an opportunity the company couldn’t pass up, president Gary LeStrange says.

“We were facing a very bad economy when we started to plan this store,” he explains. “But if we didn’t grab this location, another dealer would have. The showroom is in a brand new retail plaza in a very attractive residential area. It has convenient access to a lot of wealthier neighborhoods.”

LeStrange said he doesn’t expect an instant windfall on the new showroom. He figures on struggling until the economy improves.

These companies all share an outlook that extends beyond the short term. While immersed in a difficult time, they are positioning themselves for success.

The building of their massive new Hartville Hardware facility isn’t the first time the Millers took advantage of a weak economy. Their present store was built in 1973, during another recession.

“Back then, we saved money on labor and materials,” Howard recalls. “We had local builders come in; anybody who wanted to work. Two years later, the recession was over. That’s what we think will happen this time, too.”

Unlike many retailers, NJ-based General Plumbing Supply has had strong sales throughout the recession, says Ron Augustine. The company, with five kitchen/bath and plumbing supply locations, opened its new 3,700-sq.-ft. kitchen and bath showroom in Bergenfield in December, 2010.

“We feel that this is a great time to expand, says Augustine. “We are fortunate to have been busy throughout this recession and the new showroom is a way to stay ahead of the competition.”

Despite the recession, PGT Cabinets was determined to take advantage of its new opportunity. Like its original location, its new showroom location is in a retail plaza anchored by major stores and restaurants that generate high traffic.

“We didn’t plan to make a lot of money in the store during the first year,” LeStrange admits. “But we looked to the future and knew that eventually it would come around.”

Adjusting Product to Market