Closing All Company Appliance And Hardware Stores.
Portage Indiana , Parma Ohio Among Them.
What About The Franchisees?
1 reply
What I never understood why this format has been very unprofitable for SHOS. Profit margins at similar hardware sectors are usually 30-40%.
I know the investment of inventory is high and the product turns are slow but some locations were very profitable. They had 200 or so locations in the early 2000s so it was working at one point. They were competing against Ace and True Value as most of these were located in suburbs.
I'm 2011, SHOS then decided to franchise them to remedy some of the profitability issues but the biggest issue was the franchise model itself. The inventory was on consignment, like the Hometown dealer model
The franchisee was only making commission on items as inventory is owned by SHOS. Most franchisees were not making enough money. Should of had an Ace or True Value model. SHOS really took this format to the dumpster and wasted a huge opportunity to disrupt the small box hardware retail sector.
Talk about a huge mismanagement.