Throwback Thursday: Post mortem for a Panelrama
In the early 1970s, Ardmore, Pa.-based Panelrama Home Center was a rising player. At its peak, the company operated 35 units in 9 states. It was flush with $2 million from a public offering, and it was branching out beyond its focus on paneling for the home.
But in 1974, the company began its slide – partly as the result of the waning popularity of paneling, and partly because of marketing and operational missteps.
In an interview that appeared in the March 3, 1980 issue of National Home Center News, the forerunner of HBSDealer, Panelrama founder Gary Erlbaum looked back at what went wrong.
Here are some of the company’s issues from the 1970s that might serve to inform expanding businesses to this day:
• Merchandise. “We were not able to take the success of our paneling business and transfer it onto other product lines,” Erlbaum said. The thought was, customers buying paneling would buy other home products. That worked for panel accessories, but not for unrelated home improvement products.
• Image. “We never changed our paneling image substantially,” he said. “We became so strongly identified with paneling that even our name, Panelrama, became a detriment.” He added: “We should have changed the name.”
• Competition. Channel Home Centers moved into the Philadelphia market about 1974, and that created “problems.” Additionally, the home center competition rapidly improved their paneling expertise.
• Store size. Erlbaum said if he had another run at home center retailing, he would do it with bigger stores. Panelrama’s averaged about 10,000 sq. ft. They needed to be at least 30,000 sq. ft. (Note: that was his feeling in 1980.)
• Expansion strategy. “We never became strong enough in one market. If I started over again, I would get as strong as possible in each geographic area within a city before going ahead in any other market.
The last Panelrama closed around 1980, but the company had a strong run, and overachieved by a long shot its founders’ expectations. “I did it just to see myself through law school,” Erlbaum said. “I never assumed it would grow into a big business.”
Do you remember Panelrama Home Center? Let us know here.
HBSDealer’s Throwback Thursday is sponsored by Schaffer Associates, a national management consulting firm specializing in executive search and organizational strategies for the hardware, home improvement, building materials, and consumer products industries. As the premier management consulting firm serving the industry, we help build organizations and leadership teams that foster corporate growth and success well into the future. Contact us at SchafferAssociates.com.
But in 1974, the company began its slide – partly as the result of the waning popularity of paneling, and partly because of marketing and operational missteps.
In an interview that appeared in the March 3, 1980 issue of National Home Center News, the forerunner of HBSDealer, Panelrama founder Gary Erlbaum looked back at what went wrong.
Here are some of the company’s issues from the 1970s that might serve to inform expanding businesses to this day:
• Merchandise. “We were not able to take the success of our paneling business and transfer it onto other product lines,” Erlbaum said. The thought was, customers buying paneling would buy other home products. That worked for panel accessories, but not for unrelated home improvement products.
• Image. “We never changed our paneling image substantially,” he said. “We became so strongly identified with paneling that even our name, Panelrama, became a detriment.” He added: “We should have changed the name.”
• Competition. Channel Home Centers moved into the Philadelphia market about 1974, and that created “problems.” Additionally, the home center competition rapidly improved their paneling expertise.
• Store size. Erlbaum said if he had another run at home center retailing, he would do it with bigger stores. Panelrama’s averaged about 10,000 sq. ft. They needed to be at least 30,000 sq. ft. (Note: that was his feeling in 1980.)
• Expansion strategy. “We never became strong enough in one market. If I started over again, I would get as strong as possible in each geographic area within a city before going ahead in any other market.
The last Panelrama closed around 1980, but the company had a strong run, and overachieved by a long shot its founders’ expectations. “I did it just to see myself through law school,” Erlbaum said. “I never assumed it would grow into a big business.”
Do you remember Panelrama Home Center? Let us know here.
HBSDealer’s Throwback Thursday is sponsored by Schaffer Associates, a national management consulting firm specializing in executive search and organizational strategies for the hardware, home improvement, building materials, and consumer products industries. As the premier management consulting firm serving the industry, we help build organizations and leadership teams that foster corporate growth and success well into the future. Contact us at SchafferAssociates.com.