McClelland seeks to double sales by 2006

Home Channel News, Nov 9, 1998

INDIANAPOLIS -- Mike McClelland confidently predicts that his buying group, Do it Best, can double its wholesale sales by 2006.

McClelland, the co-op's president, expects that growth to $4 billion to come mostly through acquisitions of smaller distribution companies. In an interview with NHCN during Do it Best's October Market, McClelland spoke at length about what direction his company and its dealer-members are headed.

Aside from acquiring companies, McClelland said he saw growth also coming from helping existing members open new stores. McClelland said he sees the co-op evolving to where the majority of members own more than one store, as successful businesses buy up weaker players.

Internally, McClelland wants to reduce gross margins by 15 percent and increase dealer rebates by the same percentage by 2006, "If we can get more money into the hands of our members, they will grow their businesses," he said.

To make sure members can stay competitive on price the co-op is taking a harder look at what competitors Do it Best's vendors are selling. At the show, the co-op announced it had dropped two vendors, including Stanley's line of mirror doors.

McClelland said the co-op won't exclude vendors that sell the big boxes, as long as Do it Best can compete on equal footing. "If a vendor is selling Home Deopt at a better price, then we're not going to do business with them," he said. "We have to get the best program from the vendor!'

Ad circulars, which are now priced at just 0.9 cents each, will probably go even lower, McClelland said. The additional volume generated by a free program would probably make it cost-effective to run without charging members a fee.

"I think we're moving toward free ads," he said.

The company is also hoping to go to a paperless office system to create greater internal efficiency.