Voices of CNRG
So what is it like to transition from being an independent player to becoming part of a team? For Andrea Spencer of Elliott’s Hardware, and others under the Central Network Retail Group (CNRG) umbrella, there may have been initial trepidation; but ultimately, they trusted the right thing would be done.
For example, it was extremely important for Spencer that Elliott’s Hardware not lose its hometown identity when it joined forces with CNRG in 2012. After all, her grandfather, Jerre Elliott, founded the company in 1947, and preserving that legacy was extremely important to Spencer, who manages four stores.
“Actually, this weighed heavily in my family’s decision to join CNRG,” Spencer said. “Dropping or adding to the Elliott’s Hardware name would have been difficult on so many levels — most importantly our brand — because we are so well known. This may seem like a small thing, but for us, it is a big deal. Our name hasn’t changed. We are still Elliott’s Hardware. CNRG leadership recognized that.”
For some dealers, joining a larger retail group can mean varying degrees of restrictions on independence. That result is anathema to CNRG, the collection of independents with deep ties to Memphis-based distributor Orgill (through Orgill’s Tyndale Advisors subsidiary).
Dealers say their arrangement allows individuality to thrive.
“We take very seriously the responsibility we accept whenever we add a business to CNRG,” said Boyden Moore, president of CNRG. “It is our goal to make the former owners, who most often continue to work with us, as proud of their business under our stewardship as they were under their ownership. We realize that is saying a lot, but that’s absolutely our goal.”
Lee Taylor of Taylor-Foster Hardware said the transition to CNRG was so seamless, most of his customers didn’t know he sold the business.
Michael Nelson, who manages the Parkrose Hardware stores that folded under CNRG in 2014, said if a customer were to walk into one of his stores today, “she would notice absolutely nothing since the acquisition.” Nelson explained that all of Parkrose’s store signage, all of its decor, was custom Parkrose hardware. “Other than taking down a few Ace signs and replacing them, the customer wouldn’t notice,” he said. “We worked hard to make it seamless. It stayed very similar; we kept every single staff member, and that was a great thing.”
Capital and commitment
Parkrose Hardware had plans drawn for a major remodel in Vancouver when ownership sold the business to CNRG. Nelson wondered if the 30,000-sq.-ft. plan might be scrapped. Instead, CNRG fully embraced it. “They were like, ‘no problem.’ They accepted our plans. And it was a major deal to remodel,” Nelson said.
The access to capital and the encouragement CNRG provides its retail members is heard throughout membership. Spencer said CNRG’s involvement has enabled Elliott’s to grow in terms of store expansions and operations. “We’ve consolidated many of the worrisome back-office areas involved in running a business — employee benefits, government reporting and compliance, managing payables and receivables, things like that. It has allowed us to better focus on managing our stores and serving our customers. We’ve become a more agile organization.”
Nelson called 2015 “the most competitive year in recent history,” and yet the store achieved the most profits in the CNRG group, according to Moore.
Phillip Helms, manager of Town & Country, said CNRG is very open in terms of information-sharing. “They encourage us to think and step outside the box,” he said. As an example, Town & Country takes part in quarterly strategy meetings. During these sessions, they are updated on the overall company status and direction. “In addition, we update the group on our individual brand’s progress and share ideas to learn what is working in our sister brands or even competitors and what can be spread to other brands,” Helms said.
With Town & Country, CNRG has invested resources and capital in the key areas of inventory, marketing and technology to provide the needed tools to drive sales, be more productive and improve profits. Helms said the investment in inventory has allowed Town & Country “to improve our in-stock position to better offer our customers what they need, when they want it. Plus, we have invested in expanded assortments and new categories.”
Helms said CNRG has been instrumental in reinventing and improving the total marketing efforts at Town & Country, with a marketing strategy that is more relevant to today’s tech-savvy customer base, focusing on social media and targeted marketing.
“When CNRG purchased the Town & Country group of stores, they identified the need to invest to bring the computer systems up to date in an effort to improve speed of service at POS, back-office and inventory productivity, and reduce the overall cost to maintain the previous older systems,” Helms said. “We completed the system upgrade initiative in late 2015. The leadership at CNRG is very progressive in their thinking and not afraid to take calculated risks as supported by our rapid growth and the eclectic models that make up the current CNRG family of brands.”
The support is in funding, expertise and support. Taylor of Taylor-Foster Hardware said CNRG increased its inventory by 50%, “and the aisles are packed out. They have added several new lines and don’t do anything timidly.”
Bright future
When CNRG acquired Taylor-Foster Hardware in October 2014, Lee Taylor was planning to retire (his son Michael runs the Manchester, Georgia, store, which is part of CNRG’s South Georgia district). However, Boyden Moore had other plans for Lee Taylor. “We convinced Lee that he’s not entirely ready for retirement, and he continues to work with us on accounts receivable.”
Following the acquisition, CNRG helped the Taylors with their succession plans. “My son, Michael, who did not want to own the store, remains as the general manager and has adapted well to corporate structure,” Lee said. “It was very important to me that my team would be well cared for.”
Nelson said Parkrose has been “encouraged” to look for areas to grow and expand. That kind of progressive approach to business excites Nelson. “We are literally looking all the time,” he said. “I am waiting for the next availability on property. Finding a location that works at a price we can afford is key. It has been a really good partnership.”
Elliott’s future plans include relocating its Dallas store. “We’ve found an affordable, highly visible space within our current trade area — no small feat in Dallas these days,” Spencer said. “It was important for us to stay close by — it’s the area where Jerre Elliott started the business in 1947; our roots in the area run deep.”