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SAN ANTONIO —Handy Hardware Wholesale, the Houston-based hardware co-op, reported a record attendance of 656 stores—up 4% from 2009—for its fall market held here at the Gonzalez Convention Center. The event also broke records for giving away 215 iPads during the course of the three-day event.
During her state-of-the-co-op address at the convention center, CEO Tina Kirbie hammered away at the economy, comparing it with a truck struggling through the mud.
“The recovery is alive, it’s just not very robust,” she said.
Her mid-year report showed sales of $124.2 million, essentially flat compared with the first six months of a year ago. Before-tax earnings from operations were up 19% to $967,000.
“Like our members, Handy has had many challenges in 2010, in particular in sales, but there [have] also been many positive things that have occurred and are occurring that will spur our growth,” Kirbie said.
Chief among those positive developments is the construction of the company’s second distribution center in Meridian, Miss. Currently, the co-op operates one distribution center in Houston. The company has also spent a good part of 2010 “developing, testing and learning” the new computer system to help manage the expanded infrastructure.
The Meridian facility is expected to begin shipping product in November.
Handy ended July with a total of 1,271 members. Of the 188 new member dealers the company added in 2009 and 2010, 58—or 31%—of those new members are going to be served out of the Meridian facility, Kirbie said.
The company also said it expects to begin online training for the use of an improved company website in October.
And while looking ahead to the launch of the website and the opening of its second distribution center, the co-op is also looking to move past an unpleasant situation involving the resignation of its CFO Lynn Bradley. The show took place a little more than a week after the co-op announced to members it would accept Bradley’s resignation. Handy made no announcement regarding a replacement for Bradley, who remains with the company as senior director of retail development.
The announcement shortly followed the disclosure of a Securities and Exchange Commission settlement connected to Bradley’s alleged actions at a previous employer.
Handy executives explained in an Aug. 6 letter to members that the company recently became aware of an SEC fraud action against Bradley settled in 2007 and unrelated to dealings with Handy Hardware. The settlement ended with Bradley neither admitting nor denying charges, and included an agreement for him not to serve as an officer or director of a publicly traded company.
Handy said it had been unaware of the SEC action, which occurred before it hired Bradley. The company also said it was unaware of the signing of the SEC consent decree after he began working at Handy. While Handy apologized for insufficient diligence over the matter, the company said it believes no law or decrees were violated as a result of hiring Bradley.
“For us, this is an issue of openness and honesty, the bedrock upon which Handy has been built and upon which the company and its staff operate,” the Aug. 6 letter read. “We feel strongly that Lynn’s omission is serious enough for us to accept his resignation from his positions of chief financial officer and senior VP sales.”
The company said Bradley’s performance while at Handy was “highly beneficial to the company and to our members.” The letter also noted that “the company is on solid financial footing.”
One of the highlights of the market was the announcement of product discounts at the Saturday morning breakfast. Mickey Schulte, VP merchandising, announced special opportunities for products ranging from Ultra Hardware entry lock combo kits to Stanley Power Lock tape measures. All were offered at wholesale price discounts of at least 25%, and in some cases more than 50%.
The bargain prices were well-received, and so were the iPads, Schulte said.
“We had never had that kind of positive feedback on a giveaway item,” he said.