Executing a Dramatic Turnaround
By Chris Jensen
After spending most of his career working in supporting roles for several hardware retailers, one thing was abundantly clear to Kent Schaper—he wanted to feed his entrepreneurial spirit and execute his own vision as a store owner.
Schaper has been in the hardware industry since 1981. He worked at a small lumberyard, then spent 23 years at Westlake Ace Hardware. He helped start Nuts and Bolts Hardware as a minority owner and was involved in that company for 10 years. Nuts and Bolts Hardware had restructured, so Schaper had sold back his ownership stake but was still an employee.
He came across his dream opportunity through happenstance.
“I was in a restaurant eating and saw a guy with a Do it Best shirt on. I started talking about Nuts and Bolts Hardware, and he said that he wished someone would buy his hardware store. He and his wife were ready to sell and didn’t have a succession plan,” recalls Schaper. “I talked to a banker and he asked if I could close in a month.”
The deal to acquire Arrowhead Hardware in Baldwin City, Kan., closed quickly on November 15, 2018.
Over a five-month period, Schaper met with the former owners, Gary and Robbie, to learn about the business model and implement best practices gleaned from his previous experience to formulate his own dream store. There was a lot of work to be done.
“The building is fairly new—it opened in 2009—and the location is good, a block from a main highway. But the inventory was run down and they didn’t have the financial means to get it back up. We put everything we had into it,” explains Schaper, whose wife, Erin, works full time in the business.
Do it Best worked with them to get the inventory level back up for the 11,000-square-foot store, offering incentives that brought it up to the lower end of where the inventory should be. “We’ve grown inventory two and a half times what it was,” points out Schaper.
Attracting Key Customer Groups
Arrowhead Hardware needed help with two key customers segments: contractors and women. “Contractors didn’t bother coming in before. We inherited a rental department with a lot of broken equipment. We also knew we had to attract women and restore public trust,” Schaper says.
He began aggressively chasing the contractor business. “If a contractor asked for something, we’ll do whatever it takes to find it,” Schaper says. “I live around the corner from Home Depot, so I’ll even go pick something up there if I have to and deliver it the next day.”
In the weeks following its grand reopening in April 2019, Arrowhead Hardware hosted a Contractors’ Night to connect with local pro builders and deepen valuable relationships.
The store now gets 15-20 percent of sales from pro and commercial customers. As Schaper explains, “We had contractors asking for 15-inch drain tubes, so we sourced them and are cheaper than TSC. The city and schools are coming in asking for items, so we’ve been doing a lot of product chasing.”
Schaper has been successful attracting women with flowers and plants in the spring. In fact, lawn and garden is now the top-selling category, accounting for 25 percent of total sales.
Arrowhead Hardware did not do much business in green goods before. “The year I took over they did $7,000 in green goods. We did 10 times that last year and will do 15 times that this year. They used to be double the price on bagged goods, so it was easy to get more competitive. We’re going to do 14 semi-trucks of bagged goods this year,” Schaper says.
“We get kids with popcorn and kids knick-knack items. We’ve become known as the popcorn store,” he points out.
When he took over, Schaper found every category needed attention. “Fall trees, fall decorating, grass seed, outdoor bagged goods like mulch—everything needed a boost. We developed the paint department so we can match anyone’s paint chip. Every aisle has been redone and updated. We update the planograms every month,” he says.
In the first year, Schaper’s revitalized store quickly became a community staple largely due to the commitment he shows to his neighbors day in and day out. He even missed the Do it Best market to help run Baldwin City’s annual Maple Leaf Festival, opening up his parking lot and donating all of the proceeds to the local food bank. As a result, Baldwin City, a town of just 4,700 residents, has embraced Schaper as a welcome addition to the downtown business district.
Taking the Next Step
Schaper is pleased with the progress he has made so far with the business, but is not satisfied. “There’s still a lot of room to grow in faucets, hardware and other categories. I want to grow rental and have started down that path by bringing in tables and chairs. We’ve gotten into ag categories like barbed wire and pre-made sheds, which are big in a rural area,” he says.
The positive feedback he receives from the community fuels Schaper’s desire to keep improving. “I still get comments every day thanking me for taking over the store. I’ll tell a customer that we can bring that item in for you, but you have to bring us cookies—and they bring us cookies,” he says.
Schaper is proud to note that he didn’t cut hours or close any during the pandemic. “I made the decision that we would be here for our customers. We did a lot of curbside pickup and home deliveries for shut-ins, which is good for building relationships,” he says.
He and his office manager spend a lot of time chasing products, because Schaper doesn’t want to lose a sale. He points out that Do it Best has a good system to reserve out-of-stock items, which they have used over and over for hand sanitizer, Lysol and masks. “I just keep ordering ‘A’ items. I recently had a customer from a nursing home buy $2,000 of N95 masks. That’s one thing I learned while at Westlake—you can’t sell from an empty wagon,” he says.
Schaper knew the store had potential, but he didn’t think he could execute a turnaround this quickly. “We had a three-year goal for financials and we made our second-year goal after the first year. We’ve already passed our third-year numbers in August,” he says. “I’m extremely happy with how far we’ve come with the business. It just took a lot of hard work, but it’s been fun and rewarding.”
The Hardware Connection is a digital magazine targeted to independent hardware/home improvement retailers. It is the only industry magazine designed and distributed solely in electronic format and currently reaches over 60,000 people in the two-step channel.
The Hardware Connection publishes four Newsletters each year in addition to eight magazine issues.
To sign up yourself or additional staff to a free subscription to receive The Hardware Connection magazine and newsletter in electronic format, please click here.