On Sept. 13, Do it Best released its 2007 year-end financials, reporting annual sales of $2.81 billion for the fiscal year that ended June 30—a 7 percent decrease from sales of $3.01 billion the previous year.
At the same time, the co-op reported it will be returning a record-setting $126.2 million rebate to its member-owners, representing a 3.5 percent increase over 2006, while hardlines sales were up almost 4.5 percent over the previous year. President and CEO Bob Taylor gave much of the credit for these positive numbers to Do it Best members.
“This is a cyclical business. We’ve been through cycles before and we’ll go through them again, and our members understand that,” Taylor told HCN in an interview. “I think they’ve done a good job in preparing for that and understanding that other opportunities—whether it be expanding into home decor, looking at installed sales, rental and industrial/commercial—those are opportunities to broaden the base of their business, protect themselves and continue to drive additional volume for their operations.”
Much of the sales decrease was driven by the deflation of lumber and panel pricing, which were off more than 25 percent and 60 percent, respectively, the company reported.
“Certainly on the building side, we were impacted like a lot of others in our industry by what was happening in the housing market and regional economies and other drivers as well,” Taylor said. “But I think even there, if you look at it from a unit sales perspective in the lumber and commodities categories, we actually finished up about a point in unit sales. To go through that and still end up where we did with the profitability we did—and continue to drive growth and be where we are in unit volume—I’m real proud of what our team and our members were able to accomplish.”
Do it Best’s operating overhead, which the company points to as the lowest among hardware co-ops, rose from 1.8 percent to 2 percent of total sales in fiscal 2007. The co-op also reported it will be returning the $126.2 million rebate to its member-owners at the 2007 Do it Best fall market—to be held at the Indiana Convention Center in Indianapolis Oct. 13 to 16. This represents an average 13.13 percent of regular warehouse purchases.
Do it Best
|Down 7 percent|
“By providing our member-owners with innovative programs to increase their performance at retail, and by continuing our relentless focus on improving operational efficiency, we have been able to return a consistently high year-end rebate to help our members reinvest in and grow their independent businesses,” Taylor said.
In fiscal 2007, the co-op continued its retail focus with the Signature Store Design Program, a performance-focused store design format that offers three different models and is flexible to meet the needs of individual stores. Taylor said that there are about 150 Signature Store Design conversions in progress, and he hopes that eventually anywhere between one-third and one-half of Do it Best members will adopt the program.
In addition, Do it Best has continued to expand its store count through RetailSTART, a program that helps member-owners make informed decisions on determining when and where to add new locations.
Do it Best, whose 4,100 members include hardware, lumber and building materials dealers, is the second largest co-op in the industry, operating in the United States and in 47 other countries.