30 January 2009

Quality KBB is not a volume business

At first glance the news from across the pond that Home Depot Inc (the USA's biggest home improvement retailer), is to axe 7000 jobs is yet another indication that kitchen and bathroom market is going to hell in a handcart. But don't be mislead!

Most of the cuts affect workers at Expo Design Centres, YardBIRDS, Design Centres and HD Bath, a bath remodeling business. They represent about 2% of the company's workforce.

The majority of cuts come from Home Depot's Expo Design Centres - upscale interiors outlets that rivalled many an independent KBB showroom in presentation.

But presentation isn't everything at the quality end of the market. Indeed, many a bespoke kitchen retailer does not have a showroom - unless the corner of the carpenter's shop counts as a showroom.

What the quality customer is interested in is individual service. Yes price does pay a big part, and there is no such thing as a customer without a budget, but if they are going to buy big-ticket items, they want big-ticket service.

Generally speaking, it is the independent showroom that can deliver this in spades. Owner-managed showrooms, or at least companies with the owner keeping a very tight rein on a small number of high-end showrooms, is where the quality business gets done.

I'm not surprised that Home Depot has pulled out of is high-end market, it was never going to make a success of it.

Quality KBB is not a volume business and this is why I believe it is the independent sector that is best suited to weather the tough market conditions of today.

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