Brights Hardware Stores: Taking stock of family values

The last decade has seen a tremendous influx in the variety of products available for hardware and DIY retailers. The challenge of stock control has increased with the need to select the right type of product from a market has become awash with innovation and green products. At Brights Hardware Stores, the solution has been a combination of strong family values and business relationships, which have enabled the business to grow with support and invaluable advice from trusted sources.

hardwarestoresThe company was founded in 1971 and has developed into a popular business serving the Western Cape, as Orlando Luis, CEO, describes:

My father came over to South Africa from Portugal as an electrical engineer, working at a local refinery. He wanted to start a dry cleaning business but the start-up costs made this prohibitive and he eventually started an electrical repairs and supply business called Brights Bazaar.

We remain a family-owned business today, with seven directors including my mother, sisters (and their spouses and my own family. Ten per cent of the company shares are also allocated to the Bright’s staff trust which is donated yearly to loyal staff members.”

Today Brights Hardware has grown into a company pushing 600 employees, spread across 6 outlets, with a seventh store scheduled for launch in Montagu Park, close to the busy N7, in the coming months.

Success and growth have been carefully nurtured by Luis and in recent years have had to cope with the bewildering range of new products that have entered the market:

We provide hardware, building materials and electrical products for both the retail and wholesale markets,” Luis states. “Retail accounts for roughly 90 per cent of our business although the wholesale side has been growing steadily and we have been able to resupply other hardware stores because of the good prices we can offer.

Most of our customers are DIY guys and more recently developers, although increasingly we are seeing an uptake in the female market which tends to be more upmarket, so we are stocking products with house and hardware capabilities such as catering, design products and internal finishing,” he continues.

Brights Hardware is headquartered in Stikland and operates further stores in Boston, Blackheath, Utizicht Durbanville, Brights Trusses (also in Stikland), and Platekloof, with a further store recently opened further up the Western cape coastline, in Langebaan.

Our focus is on the Western Cape and primarily we have concentrated on the Northern Suburbs, with very little footprint in the Southern areas of the Province,” Luis explains. “There is enough growth potential in the Western Cape and the geographical distances present a challenge when it comes to our customer needs and values:

We recently opened the Langebaan site – which is roughly 100 kilometres away – and the problem is to ensure that we can deliver what the customer wants quickly. We pride ourselves on being able to meet the customers’ needs from one day to the next.

That problem is exacerbated by the need to maintain lower stock levels to make the business economically viable. With a range of products exceeding 60,000, maintaining low inventory levels whilst guaranteeing customer deliveries within a day, puts a huge emphasis on stock control and distribution.

We want to make sure that all of our stores are about 10 kilometres from one other. Most of our products are obtained locally through suppliers – if we imported items that could potentially put added strain on our ability to deliver to the customer within a day and we would prefer to pay a little more to guarantee quality.

In 2006 we bought an area of land in Blackheath – 6 hectares in total. We utilised half of the land to create a branch and the remainder was left for the creation of a future distribution centre. We have left the land until we have sufficient capital to finance this project and we are now working towards that goal through a series of franchises that we have opened,” Luis says.

The concept of franchise stores is one that the family-run business had to think long and hard about, but the fact that there are six directors, has resulted in a successful approach  to date, with the company having opened its second and third franchises in the past 12 months, with a fourth store earmarked in the near future.

The economic downturn affected financing but we were able to keep our faith in the business and we opened franchise stores during the recession,” Luis recalls. “We took the decision that franchises would be offered to long-standing staff with a proven track record for enthusiasm and loyalty to the business – and we helped to develop their skills to give staff opportunities.

We have a good infrastructure and support base in the group that enables us to open franchises and by keeping franchisees within our core staff, we are guaranteed the same level of knowledge and customer service. We believe in growing slowly and regardless of the recession.

According to Luis, each new franchisee receives close support from one of the family members – and in keeping with the company’s family values, each franchisee is encouraged to involve their families in the venture to continue for future generations.

The company aims to help the franchisee to turn their business into profit within a year, with each new project costing roughly R2 million. With the imminent arrival of a seventh store, Luis is hopefully that the funding will be in place to increase Brights’ distribution centre in Blackheath from the present 2,000 square metres to 6,000 square metres within the next two years.

Aside from storage, maintaining the company’s fleet of about 20 vehicles (ranging from 4 to 10 ton trucks), is a vital component. Luis suggests that the cost of maintaining the fleet; as well as rising fuel prices, are a challenge, but at present the existing system serves the company well.

We may at some point need to outsource transport, but for now we are able to deliver on our service values. Our stock control is equally important though and we keep our full range of products at the Boston and Stikland branches, which have gradually developed their stock over a number of years. The other stores will carry less stock, depending on how developed the store is.

We use a special order book – and if we don’t have an item in stock, we will try to find it for the customer. Once an item has sold three times on special order, we will stock it in a store.

Each store uses an interlinked IT system and will forecast its inventory needs. We carry out control reports on a monthly basis and where possible, we try to sell stock before we have paid for it, and try to maintain a 0.2 per cent turnover target for losses,” he continues.

In the winter months we see a drop off, with October through December our busy period, when the man in the street tends to focus on DIY projects (DIY accounts for roughly 60 per cent of our trade).

Those winter months are where our wide and varied range of products really comes into its own and we sell equipments for BBQ and fireplaces, waterproof products, gas systems and lighting and electrical items which prove popular in our “quiet” season, as so our appliance repair products. As a consequence, our income remains reasonably consistent across the whole year.

Luis underlines the importance of technology in Brights Hardware’s continued success, which takes its next big leap with the launch of an online store during July:

We have always been involved with computers, going back 25 years now,” he affirms. “We are increasingly seeing people order items by email and certainly the internet orders will provide a delivery challenge. Supplying customers elsewhere is going to be an exciting learning curve for us.

On the operational side of the business we own our own source code and have developed our own software through a subsidiary business called Touchpoint, which is run by Jack Theron. As the business grows, we are constantly working closely to tailor the software according to our ordering, stock control and delivery needs.”

Staff retention is an important consideration for the business, with dedicated training often leading to professional qualifications. Luis says that unfortunately many employees are not immune to some of the social and economic pressures of modern day South Africa and are given little option but to leave employment in order to alleviate financial stresses through the company’s long established Problem Fund.

For those that stay on, a number of SETA-approved courses deliver outstanding customer service and attitude courses, while more technical training is available for employees with longer ties to the company.

Eventually, aspiring leaders are given the opportunity to own a franchise, with directors providing a hands-on support function.

Support and knowledge are important words in the success of Brights Hardware Stores. Aside from the owners of the company nurturing budding leaders, Luis stresses the key role that suppliers play in guiding the choices that the business makes:

As products evolve there is lots of innovation and it becomes very difficult to select the best products available. For example, in recent years everyone has started to manufacture LED lighting – but choosing the right product range is critical to our business as products of poor quality would damage our reputation.

There is a lot of technical know-how within our business and our industry contacts help to ensure that we buy the correct products. You have to make decisions based on informed product knowledge – more-so in the present regulatory environment and our business partners and suppliers are so important in helping us.”

Luis has overseen a gradual building of the business in his 30 years with Brights Hardware Stores. It is an approach that he is keen to continue:

I would like us to further develop our footprint in the Western Cape and to increase our service to the Southern Suburbs, without the need for stores further than 200 kilometres from Cape Town. Over the next 5 years our aim will be to operate up to 10 store outlets in the Western Cape,” he concludes.