Hastings Hardware set to tee off - Brief Article

Home Channel News, April 16, 2001 by John Caulfield

ORLANDO, FLA. -- It may be a while before Robert Hastings gets back to working on his golf game.

The transplanted Australian businessman is spending nearly all of his time these days getting the 20 smaller stores he acquired from Scotty's on Jan. 28 into shape. All 20 are undergoing a complete remodeling and remerchandising to return them to what Hastings calls "their hardware roots." Hastings' efforts are being supported by Do it Best, the dealer-owned buying group that has supplied the store design, computers and products, and will handle the stores' replenishment once the operation is fully reopened in late July or early August.

The 51-year-old Hastings, a 5-foot 6-inch dynamo with an indefatigable spirit, now finds himself scheduling painters and tilers, haggling with landlords and encouraging 117 store employees whose demoralization under Scotty's had approached despair. What he's trying to do -- create a mid-sized hardware-store chain in a state dominated by Home Depot and Lowe's -- may seem folly to some, especially after Scotty's disastrous conversion of these stores into bargain outlets whose product mix included everything from pantyhose to dolls. But don't tell Hastings that.

"You have to create your own identity, and I think we're actually five years ahead of most startups because we took over a going concern," he stated confidently, while leaning back into a huge couch in the living room of his 5,000-square-foot home here. That house is serving as Hastings Hardware's temporary offices until it moves into more permanent digs this month. Hastings' 40-year-old American-born wife, Leslie, is perched behind an ever-growing bank of personal computers. She helped design the company's Web site and is serving as her husband's right hand in this fledgling enterprise. "It's been exciting and fun," she said, with a wry smile.

Stores had become 'a joke'

Fun is hardly the word that Hastings Hardware's employees would use to describe Scotty's failed attempt to inject new life into its chain of different-sized stores by adding a volatile mixture of closeout merchandise. The larger stores could more easily absorb these products, but as much as 80 percent of the smaller stores' inventory became nonhardware products.

"The customers saw us as a joke," said John Baluha, a 10-year Scotty's veteran who manages Hastings Hardware's 6,500-square-foot store in Winter Park, Fla. He noted that his store's commercial business, which accounted for 13 percent of its sales, dropped to less than 1 percent when Scotty's made the switch. In addition, this store -- like many that Hastings acquired -- is in a strip mall near a supermarket, which made selling foodstuffs Scotty's had brought in virtually impossible to sell.

Scotty's executives at its headquarters in Winter Haven, Fla., apparently arrived at the same conclusion late last year, and were mapping out a major restructuring of their company that did not include the smaller stores in its long-range plans. Here's where fate, friendship, fortune and golf came into play.

In June 1999, Hastings was easing into semi-retirement. He had sold his burgeoning electronic components company, Sydney-based Amtron Australia, to Tyco International. He also sold his holdings in a hotel and pub in the Hunter Valley wine-growing region of New South Wales.

Hastings had planned to take two years off and concentrate mostly on lowering his golf handicap, which he got down to 9. What drew him to Orlando, he said, was an article in Unique Homes, a magazine published in Australia, that was written by golf pro Mark O'Meara about Isleworth, a course designed by Jack Nicklaus around which was being developed an affluent community of "McMansions" whose residents eventually would include rich pro athletes like Tiger Woods, Shaquille O'Neal and Ken Griffey.

At a Pro-Am tournament held at Isleworth Country Club, Hastings met two men who would pull him out of early retirement: Tom Morris, Scotty's CEO, and Tom Hansen, an entrepreneur and former manager with General Electric, who describes Morris as "my best friend."

Hastings, who after graduating from high school became a carpenter's apprentice and eventually started his own construction company, was intrigued by Morris' offer to sell him six Scotty's stores. "But running six stores would have been a two-day-a-week job," Hastings re called. So six became 10. And then Hansen -- who runs a $100 million, 2,000-employee database marketing company in Louisville, Ky., called Accent Marketing Service -- offered to come in as a second investor. Hastings and Hansen (who has known Morris for nine years) paid Scotty's $6.2 million for the 20 stores, a deal that Hastings said closed very quickly. "I actually wanted to consummate the sale on March 28, but the whole thing happened in only around 10 days."

Hansen lives full-time at Isleworth but isn't directly involved in the day-to-day operations of Hastings Hardware. He referred to Hastings as the "driving force" behind this transaction. "Both of us have proven track records in starting new companies, and we have a great partnership. But if Robert wasn't in this, neither would I be."