Islands of opportunity

The Caribbean island of Tortola in the British Virgin Islands is known throughout the world as a vacation destination with remarkable beaches and unbeatable sailing and diving.

For Micheal Thomas, the second-generation general manager of CTL Home Center, Tortola is also an island of home improvement opportunity. It is here where the company’s transformation from plumbing supply house to showroom to full-service LBM dealer and home center is under way.

It’s also here where the challenges of the high cost of imports and competition from suppliers in the neighboring U.S. territories of St. Thomas and Puerto Rico have combined to keep the company sharp, especially in maintaining its customer base and controlling the cost of shipping, freight and import duties.

“We have to have prices that make sense to our customers,” Thomas said. “Our operating costs here are higher than they are in those U.S. islands. But we’re able to manage that. And our customers tell us they appreciate us. We even get some from St. Thomas.”

The business was founded by Thomas’ father Clarence Thomas, who ran a plumbing construction business in the 1960s and found a ready market for imported materials left over at his job sites. After Clarence Thomas Ltd was founded in 1967, the business transformed steadily, expanding to contracting and marine supplies and adding a location on the island of Virgin Gorda in 1996.

Today, the company that has been shaped mightily by geographic and political boundaries is on the verge of another big step in its evolution.

Thomas and his team, which includes his brother David, who heads the IT and marketing functions, are bringing a new dimension to their offering and to the island in the form of a drive-through lumberyard — phase one of a larger transformation to step up home improvement and building material distribution in the BVI.

“We took a hard look at the future of this business and this island,” Thomas said. “And the next logical step for us to complete the cycle was to add a lumberyard.”

Early efforts about five years ago to sell lumber from a shed at the Tortola location weren’t paying off. But taking the advice of a colleague in the industry, Thomas took a trip to Louisiana to visit the widely respected operation of Stine Lumber. What he saw made an impression in a couple of ways.

“I never met [the Stines] before, but a lot of our retail concepts were the same,” Thomas said. “Then we went through the lumberyard, and I said, ‘This is it.’ It makes all the sense in the world.”

He listed some of the benefits of a drive-through lumberyard: It’s organized to sell, it’s weather-proof, and it’s convenient for the staff and customer. The facility in Louisiana was designed by Ron Johnson, who has made a name for himself as an authority on and designer of drive-through yards. CTL engaged Johnson for an 11,000-sq.-ft. project on the site of a competitor’s hardware store that closed last year.

In December 2010, CTL’s drive-through lumberyard opened. The challenge of training new people in a new field was daunting, but Thomas likes what he sees so far, describing the addition as a “dry run” for an even bigger project on the drawing board.

CTL is continuing its business evolution. And it already has the blueprints drawn up for a facility that Thomas describes as a game changer for the industry in the BVI. The new home center will consolidate the two existing Tortola stores in one location just a little outside the island’s major city of Road Town in an area called Fish Bay. The new version of the 45-year-old business will combine a larger drive-through lumberyard and a larger home improvement center — totaling about 50,000 sq. ft. Located on waterfront property, the facility will allow customers to carry merchandise by boat back to their home or project. It’s about a year away, but expectations are running high.

“It’s going to change the face of retailing in the BVI,” Thomas said. “Our plan right now is to build a comprehensive offering to serve customers’ projects from the ground up. And I’m just looking forward to bringing our store concept to more people.”

The setting may be unusual, but the retail principles are familiar, according to David Thomas, marketing manager for CTL Home Center: Your people, your products and your service determine success.

“We’ve done our best to give our customers really great products, really great pricing and keep the stores looking good and comfortable to shop,” David Thomas said.

CTL describes Orgill as the company’s primary supplier, and estimates that more than 60% of its inventory is ordered through the Memphis, Tenn.-based distributor.

Several years ago, when Home Depot opened in St. Thomas, Orgill representatives arrived on the scene to develop a price strategy with CTL to find competitive and margin opportunities. And last month, Orgill’s team provided new planograms for the Virgin Gorda store. “They came in and reset the entire store. We can already see that it’s made a big difference.”

While building is at a lull across the British Virgin Islands, sales have grown about 5% a year in the last two years. While it’s not the high-margin areas of plumbing and construction, housewares is one of the fastest-growing categories for the company.

“We’re growing, even in the bad economy,” Micheal Thomas said.