Thursday, July 22, 2010

It doesn't take an MBA

In the nineties, I worked for an independent hardware store under the banner of ServiStar Hardware. The owner of the business was a hands off owner and let us run the business nearly as our own, as we had the better retail backgrounds. ServiStar was a co-op. For those who don't know, the owners of the independent stores actually own the co-op. That set up is in place today for names many know such as Ace and Do-It-Best. The actual co-op is run by a board and a CEO that make direct decisions for the betterment of the group. The value to members is clout. By combining their purchasing power they are able to negotiate for lower prices for all members.

Back 'in the day', Ace was the number one co-op followed by True Value and ServiStar. The latter two joined forces and formed the corporation of TruServ then usurping Ace's position as the top dog. That was in 1999 (I think). Each banner would be supported going forward with the benefits for all. That seemed great on the surface.

As the merger began to take place there were signs (at least to me) that things weren't going to happen even-handedly to both banners. There are operational issues that needed to be overcome such as skus. A sku is the 'stock keeping unit'. It is a number assigned to every item to track, order and sell it. TV used six digit numbers and ServiStar used five digit. It was decided that all member would use six digit skus. As these types of issued were overcome it appeared that the ServiStar owners always lost out to the TV owners. I had this discussion with my owner. She said it didn't matter and they were assured things were equitable. After six months of working through these issues I told her I gave it no more than five years and the name ServiStar would cease to exist and if she wanted to stay in business she should start saving for a new TV sign out front.

I worked for her for less than two more years before moving on, seeing the writing on the wall. The business closed after another two years after surviving twenty good years. That was not the only factor in the close but it was one.

I hadn't thought of it for some time and the other night I went on the internet and looked up the word TruServ. On the first Google page was a hit for the article that said on January 1, 2004 TruServ would officially change its name to True Value Corporation.

It doesn't take an MBA to see the writing on the wall. You just have to pull your head out of the sand.

1 comment:

  1. The brand ServiStar is now a registered trademark of a new home services franchise company that started in Norfolk, VA. Their website is