Nuts and Bolts hammers away

Somebody ought to tell the folks at Nuts and Bolts Hardware that we’re in an economic downturn. They haven’t seemed to notice.

Just when most businesses have been scaling back and waiting for the economy to stabilize, this upstart company created by former Westlake Hardware execs Brian Richards and Scott Westlake has been opening back-to-back-to-back stores—the first in Overland Park, Kan., in August; the second in Independence, Mo., in September; and the third in Arlington, Texas, in February.

And these are not just little stores, but large Destination True Value formats measuring 52,800 sq. ft., 22,000 sq. ft. and 32,000 sq. ft. Rather than tucking tail and waiting for things to improve, Richards and his partners have hit the ground running in the hardware business.

“Hardware stores have historically done pretty well in tough times as people continue to fix, repair and replace things in their homes,” said Richards, who has more than 30 years of experience in the hardware industry. “People do more of that in the hard times than build new houses.”

That’s why when Richards, Westlake and three others executives, Sandy Kauffman, Kent Schaper and Keith Aholt, made the break from the 90-store Westlake Hardware chain in late 2007, they began looking for communities whose homes were built in the 1950s, ‘60s, ‘70s and ‘80s. According to Richards, areas with aging housing stock are the sweet spot for hardware stores. Newer neighborhoods can be a tougher audience. “You may sell your share of gas grills and patio furniture, but from the hardware point of view, things in new homes don’t need to be repaired,” he said.

One of the main reasons Richards and Westlake chose to join True Value was the co-op’s Destination True Value (DTV) format, which Richards said offers the best decor package, fixturing and signage in the business. He likes the fact that DTV emphasizes small projects and offers a broad product selection in core hardware categories that can be adapted to the needs of the individual store. In fact, Nuts and Bolts has added almost 5,000 SKUs to the DTV offering.

Richards describes the stores as “impressive.” The Overland Park location has 8,000 sq. ft. of patio furniture, with every grouping from the True Value catalog on display. The hand and power tool and hardware departments—with 228 linear ft. of locks and hardware—are the largest in the store. And then there’s 180 linear ft. of paint, which he says makes a bigger section than you’ll find in most Home Depot and Lowe’s stores.

With all of its modern conveniences, however, Nuts and Bolts is—at its core—an old-fashioned hardware store. Meaning, it’s all about service. In addition to key cutting and screen and lamp cord repair, there are 160 SKUs of metal that can be cut by the foot; on-site tool and knife sharpening; free delivery and assembly; repair of any type of electrical item; and changing watch batteries. And true to their name, the stores also have 12,000 nuts and bolts in stock, while the average large hardware store has 6,000 to 8,000 units.

Richards also believes in promoting his business and spending money to make money. On each of the stores’ grand opening weekends, customers received 25% off all purchases and a “buy one gallon, get one free” offer on paint. There are regular coupon promotions like “half price on any item $50 or less,” or “bring in an empty paint can and buy two gallons for the price of one.” In addition, the stores offer discount bonus cards that give 10% off lawn and garden purchases everyday.

While he does take advantage of some of True Value’s circulars, Richards also likes to run his own promotions. That way, he is able to adjust ads and merchandise with a local understanding of weather patterns for maximum results. “It was warm in early March, so we advertised fertilizer and sold a lot,” he said.

Despite continued bad news on the nation’s economic front, the Nuts and Bolts team remains bullish. They plan to open three more locations in calendar year 2009, and although Richards did not specify where, he said they were looking at the same general areas as the first three stores.

“We’re not facing sales issues and are, in fact, meeting all our projections,” Richards said. “The consumer is out there looking for good value and tremendous service, and that’s what you’re going to find in our stores.”