Hardware & Lumber (H&L) has set its eyes on regional expansion chiefly for its wholesale business as it grapples with a change in spending patterns in Jamaica.

“The agro business is set to grow regionally and our wholesale businesses are on a regional growth trajectory,” Marcus Richards, managing director of Hardware and Lumber, told the Jamaica Observer in a recent interview.

“Most of the stuff that we sell are in demand in other territories and so building on our supply chain expertise, we are making them available to other territories. We have great brands, amazing infrastructure and so we are now extending our vision outside of Jamaica.”

Richards said Hardware & Lumber’s wholesale businesses – H&L Agro, which sells to farm stores and farms – and H&L Wholesale, which sells to hardware stores, projects, developers and contractors – have already started to explore for business opportunities across Caricom countries.

“The beauty of the wholesale businesses is that they are not block and steel. They are really relationship- and salesperson-driven and so that makes it easier for us to expand,” he pointed out. Richards said the company started to manoeuvre for the regional markets last year and is hoping to start reaping success from the efforts this year especially in the bigger countries of Belize, Suriname, Guyana, Barbados and Trinidad and Tobago.

Hardware & Lumber operates six business lines. Its H&L Agro subsidiary has both a retail and wholesale componet. H&L Rapid True Value operates only as a retail entity. A fourth entity, H&L Wholesale, caters to business to business customers. The other two subsidiaries are Regency Blinds in which Hardware & Lumber acquired a majority stake in 2021. The company also recently launched its courier service Brown Box.

However, Richards said the retail businesses are not under consideration for regional expansion right now. “The investment capital required to grow those externally is significant, so we have to prepare for that differently,” he noted, while stating that if an opportunity comes up to take any of the retail brands to the other islands, he would explore it.

H&L Town Centre store concept

In Jamaica, the company has turned to what it calls the H&L Town Centre concept to bring “all the banner brands under one roof”, Kerry Edwards, general manager, H&L Rapid True Value, told the Caribbean Business Report. The first H&L Town Centre store was opened in Ocho Rios earlier this year.

“We wanted to ensure that our customers have the full suite of products from Regency, H&L Wholesale – which is a new touch point for contractors and developers and wholesalers – and we have H&L Agro,” Edwards said. The store also has a Brown Box centre, the first in the island which Hardware & Lumber hopes will challenge other courier services by leveraging the company’s 100,000 customer base for business.

“We will be rolling out in three locations,” Carey Lue-Pann, general manager of Brown Box, told the Caribbean Business Report. “This is the first one [in Ocho Rios]. Then we will be going to Lane [Plaza in Kingston] and then Mandeville and more locations to come on stream in the future,” he continued. Brown Box will follow the H&L hours and will be opened seven days per week.

The company plans to roll out more of the H&L Town Centre concept, but “how many more we can’t say because it’s dependent on the space available to us on a few other things”, Richards added. He however said the next town centre store will be rolled out by the end of the second quarter.

Craig Fongyee, general manager of Regency Blinds, said he too is seeking to leverage the town centre concept to grow that business.

“The plan is for me to piggyback off of their visibility as much as possible. So we’ll be opening Regency Blinds in other stores. As to where, we can’t say just yet,” he added.

The Hardware & Lumber subsidiary now has three locations. Its head office on Half-Way-Tree Road in St Andrew where it operates a factory and showroom along with Fairview in Montego Bay which is just a showroom, and the Ocho Rios location which is also just a showroom. Fongyee said the company manufactures everything it sells.

“We don’t bring in any finished products,” he noted.

Regency Blinds manufactures and distributes custom-made blinds. Fongyee said with increased visibility, he hopes Regency Blinds will be able to double sales “in the next couple of years”.

“A lot of persons don’t know about Regency. A lot of persons don’t even know about the industry. So, by using stores like this brings exposure to us and H&L Rapid True Value being the big name industry automatically will bring the business towards us. So that’s what’s that’s the plan,” he said.

Challenges

However, the entity has been seeing challenges.

“I wouldn’t say a slowdown in sales, but spending patterns have changed. For example, when we first came into the business, Christmas season was a huge outlier relative to the rest of the year. However, because of how we’ve made changes in the business, we’ve seen a levelling out across the course of the year, so I wouldn’t say that I’ve seen these sales soften,” Fongyee said.

But he admits, “Business has been challenging with the upheaval in the last couple of years – a pandemic, supply chain disruptions from the Russia-Ukraine situation and inflation, but through it all, our platform has stood very strong.”

“You do see changes from quarter-to-quarter. In general people have been pulling back on luxuries. Fortunately, our businesses are all revolve around necessities.”

He declined to quantify the impact of the changes on sales but said it has picked up again.

“I know that you you would love to have the numbers, but we’re not in the habit, as a business of putting that out there,” Richards said when asked for greater details on sales and how share of revenues each business contributes. He cited that the company is no longer on the Jamaica Stock Exchange and so doesn’t have to provide those numbers for public consumption.

However, he said, “What is being perpetually contemplated by the board and the shareholders is whether Hardware and Lumber goes back on the stock exchange and/or we take some of our subsidiaries to market.”