Australian investor buys 20 Scotty's units

Home Channel News, March 19, 2001 by Brae Canlen

Impact on Do it Best's distribution has other members concerned

WINTER HAVEN, FLA. -- When Scotty's disclosed its decision to reconvert its chain to a hardware-store format in January, the news came as a surprise to most of the retailer's staff. Ten days later, Scotty's employees in St. Petersburg, Daytona Beach and 18 other locations were in for another shock: they now worked for Hastings Do it Best Hardware.

Robert Hastings, a former home builder and electronics manufacturer from Sydney, Australia, heads a group of Orlando-area investors that purchased 20 of Scotty's 115 stores. Spread throughout the state of Florida, the small-format units, which average 10,000 square feet, are in the process of being remodeled and remerchandised. Store designers and other staff from Do it Best Corp. are working with Hastings, who serves as president and CEO of Hastings Do it Best Hardware.

Hastings, an avid golfer, was playing in a tournament and could not be reached for comment. But Laurie Hastings, interviewed by telephone at their Orlando-area home, said her husband started his professional career as a carpenter. "He likes a challenge, and he sure is getting it," she joked. The Hastings house is currently serving as company headquarters while corporate offices are being readied in a new office building in Orlando. Hastings estimated that all 20 stores should be running on Do it Best's CS2000 information management system by the end of April. The night manager of the store in Tampa, Fla., told NHCN on March 8 that this unit was liquidating inventory and would be fully converted and operational within six months.

Dave Haist, Do it Best's senior vp-member services, said that the co-op played no role in the transaction between Scotty's and Hastings, which was being negotiated when Scotty's joined Do it Best. Haist also said that the buying group is not extending special financing in connection to the conversion process. Haist said he expects Hastings Hardware to participate in "just about every [program]," including circulars, planograms and installed sales. The retailer is also considering rental centers, Haist said.

Hastings's 20 stores -- along with the 87 Scotty's units that also joined Do it Best -- undoubtedly will put pressure on the Fort Wayne, Ind.-based co-op's regional distribution center in Lexington, S.C. Some Do it Best members whose stores pull product from that warehouse are worried about the extra demand. "I hope they have enough merchandise to serve everyone," said Hector Sera, owner of Flagala Hardware in Panama City Beach, Fla. "That's my one concern."

Jack Lurie, a Fort Myers, Fla.-area Do it Best dealer, said that his field representative paid him a special visit to break the news about Scotty's. But that didn't allay his concerns. "We already have distribution problems," said Lurie, who has noticed an increase in "ship later" items. "I don't imagine that this is going to make it any better."

Some dealers who are riled over Scotty's partnership with Do it Best aren't even members of the co-op. "A lot of us dealers in Florida have been talking to Do it Best," said Dick Beal, owner of Merritt Island Ace. "All of a sudden, this [Scotty's] thing came up, and we said, 'Hell, no.' "Beal reported that he and the other retailers don't want consumers to associate their stores with Scotty's. One prospective Do it Best dealer even cancelled a trip to Fort Wayne, according to Beal. "He called them up and said, 'Come pick up your [plane] tickets,'" Beal reported.

Scotty's has closed several stores since it sold the units to Hastings for an undisclosed price. The 77-year-old regional chain operates 65 home centers and 22 smaller hardware stores in Florida and Georgia. Although Scotty's is expanding its product offerings through Do it Best's catalog, it has no plans to change or add to its name, according to spokeswoman Lora Kellogg.