No product too exotic for Sappanos - Brief Article

Home Channel News, April 16, 2001 by Brae Canlen

Chicago retailer takes niche retailing to the next level

Its stores sell camel hair paint brushes, gold leaf foils and quail feathers. They also sell industrial strength Rust-Oleum and a fire retardant for the inside of airplanes. Hi-Grade/Sappanos Decorating Centers has taken niche re tailing to new latitudes by offering every conceivable category of specialty paint out of its four stores in the Chicago market. With a new e-commerce site and a fifth location in the works, the Goldmeier family that owns this company is ready for another century of independent paint retailing.

"We go to market every way we can," said Harold Goldmeier, a former education professor whose father ran a wholesale paint business. Goldmeier's son, Joshua, who works as the company's retail manager, stated it another way. "We're tired at night," he said.

The Goldmeiers bought Sappanos Decorating Centers 10 years ago, after having operated Hi-Grade Paint, a wholesale industrial coatings firm, since 1981. Putting the two companies together meant a longer name and a thicker catalog, but the two channels created a healthy synergy.

"It's very hard for independents to be just in the retail or wholesale markets," said Harold Goldmeier. "With wholesale, margins are slimmer and cash flow is tighter. Retail gives you better margins, but suppliers don't care about you unless you buy in enough volume."

The Goldmeiers run everything out of their four stores, which average 8,000 square feet. Two units are within the city limits, and the other two, in La Grange and Elk Grove Village, Ill., are suburban locations. (The fifth store, scheduled to open in July, will be located within Chicago's south loop.) Professional and commercial/industrial accounts -- which includes government agencies, institutions, painting contractors and design professionals -- make up 65 percent of the stores' customer base.

Sappanos Home Centers started selling faux finish supplies in the 1930s, long before it caught fire in the DIY market. "What we have goes way beyond rag rolling and sponge painting," Goldmeier said. Decorators who specialize in trompe d'oeil, wood graining and marbleizing (that's where the feathers come in) shop his stores for paint brushes made of squirrel hair or Chinese pig bristles. Consumers looking for lambskin paint roller covers or Crayola chalkboard paint also shop there, sharing counter space with military contractors trying to meet industrial coating specifications.

Hi-Grade/Sappanos is the exclusive U.S. distributor for a line of intrumescent, a clear fire retardant used on wood paneling in ships, airplanes, and a number of McDonald's restaurants in Japan. The dealer also does a big business in fireproof coatings used during loft rehabilitation projects. One product its stores sell can encapsulate smoke; another provides a barrier against lead.

With 90 employees and seven delivery trucks, Hi-Grade/ Sappanos broke $12 million in sales last year, a figure that should rise as the company's Web site gains customers. Launched last December after an 18-month test, PaintPlus.com is receiving 15,000 new visitors monthly. "We invested the same kind of money in the Web site as we would for a bricks-and-mortar location," said Goldmeier, citing development costs (he hired an outside firm) and marketing. Paints Plus.com sells all the categories offered by Hi-Grade/ Sappanos, including wallpaper, automotive paint and a full-body harness kit (designed to prevent falls) that retails for $284.99. With the Web site up and running, the company plans to phase out its catalog.

For a cutting edge retailer, Goldmeier displays some traits of an old-time store owner. Paints Plus.com offers a marked-down section of "steals and deals," and Goldmeier's voice mail signs off with "Let's do business!" Like many longtime operators, he laments the odds that continue to stack up against independents. Competing against Home Depot and Grainger is tough enough, he said, without going up against your own suppliers. Hi Grade/Sappanos is a high-volume dealer for Benjamin Moore, the New Jersey paint maker that has been acquiring independent retailers and operating its own re tail outlets. Benjamin Moore recently opened an outlet three blocks from Goldmeier's largest store, he said.

"We try to maintain an arm's length relationship in terms of the information we give them," explained Goldmeier. His stores also sell other high-end paint for the DIY market, such as Pratt & Lambert, manufactured by Sherwin Williams. Pro customers can choose among brands like Muralo, ICI Paint and Martin Senour.

Goldmeier is always looking for new niches; one of his most re cent category additions is power tool rentals. But in the final coat, Hi-Grade/Sappanos will maintain its longevity through the tenets of independent retailing. "The people who come in here like to be helped," Goldmeier stated. "It's all about relationship building."