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Local store retools and thrives

With its diverse and quirky merchandise, 101-year-old Virgil's Hardware in Glendale competes with Home Depot.

January 24, 2007|Martin Zimmerman | Times Staff Writer

Virgil's Hardware in Glendale has been around -- in one form or another -- as long as the city it calls home.

Known for its quirky inventory and helpful staff, the store survived the Great Depression, retailing fads and sweeping demographic change.

But it almost didn't survive Home Depot.

When Tony Maniscalchi and his then-wife, Kaylen, bought Virgil's in 1996, the store was in trouble. A couple of years earlier, Atlanta-based Home Depot Inc. had opened one of its massive orange home improvement centers a few miles away on San Fernando Road, and the outlook for the hometown competition wasn't good.

"Virgil's took a pretty bad hit when Home Depot came to town," Maniscalchi recalled.

How bad? The store's annual sales -- more than $6 million pre-Home Depot -- plummeted to $4 million in the year after the big-box retailer opened, Maniscalchi said. It had lost $250,000 the year before he took over.

The new owners faced a predicament familiar to independent hardware dealers, coffee shops, office supply stores and electronics retailers across America. How do you compete against what is known as a category killer -- a competitor so big and so rich that resistance seems futile?

Mom-and-pop hardware stores across the country that couldn't answer that question have failed by the thousands as Home Depot, Lowe's Cos. and other big-box competitors expanded. Since 1990, the number of independent hardware stores in the U.S. has declined 10% to about 20,200, according to the North American Retail Hardware Assn.

The association doesn't keep regional figures on closings, but the pressure on independent dealers clearly has been growing. Home Depot, the nation's second-biggest retailer, behind Wal-Mart Stores Inc., has 69 stores in Los Angeles and Orange counties, up from 27 a decade ago. Lowe's, which had no California stores 10 years ago, now has 78 in the state -- 15 in L.A. County.

"When the Home Depots really started to spring up in the '90s, the attrition was vast among independent hardware and lumber stores," said Bill Anawalt, owner of Anawalt Lumber & Hardware in Montrose, which has been in business since 1921.

Staying in business in the face of such formidable competition requires tenacity and the ability to learn from one's foes, said Ken Clark, editor of the trade magazine Home Channel News.

"If you're an independent and you want to survive against the likes of Home Depot and Lowe's, you've got to keep your friends close and your enemies closer," he said, quoting Michael Corleone in "The Godfather: Part II."

For Maniscalchi, that means sending his employees to roam the aisles of competitors, checking prices and inventory; deciding which items he can match them on in terms of value and selection; avoiding price wars he can't win; and stocking hard-to-find items that the big guys don't want cluttering their high-turnover inventory systems.

"It came down to service, price and selection," he said. "To remain competitive, we had to address those three things."

At stake was the future of a store that traces its roots to 1906, the year Glendale was incorporated and Glendale Hardware Co. opened its doors. That store was later acquired by Robert Brinkman, whose father, Virgil Brinkman, had founded Virgil's Hardware in the 1940s.

Robert Brinkman merged the two stores in 1975, setting up shop at the present Glendale Avenue location under the name Virgil's Glendale Hardware.

That was around the time Maniscalchi got a job at Virgil's as a stock clerk during his senior year in high school. He worked there for three more years while attending Glendale Community College, after which he embarked on a career in real estate.

Fast-forward two decades. It's Christmas Eve 1996 and Robert Brinkman is having lunch with his former employee. Brinkman, tired of being a little box in a big-box world, had asked Maniscalchi to help him sell Virgil's. Maniscalchi, who hasn't had much luck finding a buyer, decides he'd like to take a shot at turning the store around.

"We worked it out over lunch on a cocktail napkin," Maniscalchi recalled. The purchase price was $1.2 million for the name, the inventory and a 25-year lease on the building.

Maniscalchi, then as now a partner in Stevenson Real Estate in Glendale, hadn't worked in retail since his days as a stock boy. And he was at least partly responsible for Virgil's dire straits, having brokered the real estate deal that brought Home Depot to town. As the new owners, he and his wife faced the delicate task of bringing Virgil's into the modern retail era without alienating its longtime customers.

At Kaylen Maniscalchi's urging, the store was brightened up to make it more inviting to female shoppers, who now account for half of the store's weekend traffic. The housewares section was expanded, and checkout and inventory systems were computerized.

Some things were left untouched. The new owners tried to maintain Virgil's reputation for flooding the floor with knowledgeable salespeople.

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