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Building a Following : Role of Service Is Hammered Home at HomeBase


IRVINE — Ila Bramhall knows what she likes--and the service she'd been getting at her neighborhood HomeBase store just wasn't it.

She could never find what she wanted, and employees were of little assistance. Said the Tustin resident: "I used to get so mad at the salespeople that I'd walk out."

But when Bramhall walked out of the do-it-yourself store on Barranca Avenue in Irvine recently, she had a $75 purchase in hand and a whole new attitude.

"I don't know what happened," Bramhall said, "but everyone in that store helped me."

The warm reception she got is part of the new hospitality at the Irvine-based home improvement chain. HomeBase is recognizing that, in an increasingly competitive field, low price and wide selection aren't enough to satisfy consumers.

"Service is king these days," said Terry McEvoy, an analyst who follows the home improvement industry for the brokerage Janney Montgomery Scott. "And you've got to have guys in the store who can help," he said, because most do-it-yourself shoppers "are basically unskilled laborers."

HomeBase's major competitor, Atlanta-based Home Depot, has long balanced price, selection and service. And San Jose-based Orchard Supply Hardware, a 45-location home improvement chain based in Northern California, recently brought its reputation for high-quality service to the competitive do-it-yourself market in Southern California.

Allan Sherman, who joined HomeBase as president in September, acknowledged in an interview that experiences like Bramhall's were once all too common at the chain.

"We knew customers recognized us for price and selection," Sherman said. "What we didn't give was service."

"The customer is dictating that service be an integral part of the total (sales) equation," said Sherman, most recently an executive with Waban Inc., HomeBase's Natick, Mass.-based parent. "I think the so-called category killers in consumer electronics--Circuit City and the like--are showing how it can be done with experienced salespeople."

In addition to bolstering service, HomeBase is completing a costly restructuring that will include the closing or relocation of 24 stores that were too small, too old or too far away from the chain's stronghold in California, where 31 of its 81 remaining stores are located.

HomeBase is abandoning an ill-fated bid to become a national chain and is putting renewed energy into its operations in the West. (Waban reported a $101-million pretax charge in connection with that restructuring at its subsidiary.)

Waban executives are optimistic that the restructuring is working: Operating income at the 67 HomeBases to remain open after restructuring rose to $11.8 million for the quarter ended April 30, up from $8.4 million for the same period a year earlier.

Observers suggest that HomeBase's failure to recognize earlier the importance of customer service was in part a result of its history as a membership club. Up until just two years ago, the chain was known as HomeClub, and its customer base was mostly contractors whose main concern was low prices on bulk purchases, plus convenient hours and fast check-out lanes.

Today, three-fourths of HomeBase's customers are do-it-yourselfers like Bramhall, who typically need guidance to tackle leaky faucets, broken hinges and worn-out electrical fixtures.

Sherman is encouraging employees to steer customers to the licensed contractors, plumbers and interior designers who are now on site at HomeBase stores. Employee counts at the stores, which had ranged from 80 to 170, have risen to 120 to 250.

Because builders have different needs than those of weekend warriors--pros, for example, often buy top-of-the-line power tools or lumber by the truckload--HomeBase has dramatically increased the number of items it stocks to 25,000, up from 10,000.

Still, some industry insiders question whether warehouse-style operators can make good on their pledge of lower prices and increased service.

"You can have a big store with service," said Bill Griffin, 52, who has been selling hardware at Griffin Ace Hardware in Santa Ana since he was 12. "But you can't have the same pricing, because service costs money. I think people know what they're going to get, and they'll be disenchanted with promises of service."

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