Huntington office supply firm revamps to stay viable
For more than four decades, the Huntington Business Products Centre anchored the west end of Main Street in Huntington Village opposite the public library. Albert and Amira Garbus founded the company in 1970, and for years their 8,000-square-foot store with its maroon awning attracted the town's lawyers, accountants, teachers and restaurateurs looking for paper, pens and other office supplies.
But in December, battered by the same economic and technological changes affecting many retailers, the Garbus family closed the store and two nearby warehouses and consolidated operations in a 4,000-square-foot distribution facility in Plainview. "It was a hard decision to leave," said David Garbus, now president of HBPC and one of two Garbus sons. "Huntington was a great place for us and we have customers very loyal to us, but people were not coming to the store like they used to."
Pressure from the giants
HBPC faced pressure as Staples and other big-box stores proliferated, and smartphones and iPads made fine pens and stationery products obsolete.
"We've been talking about a move for years," said Garbus. For 15 years HBPC's bread and butter has been delivering office products to area businesses. Growth has been 3 percent to 5 percent a year for the last two years, Garbus said.
HBPC is not alone in facing a tough environment. Sluggish economic growth and changes in buying habits have impacted many office products retailers.
In March Staples, the nation's largest office chain, said it was closing 225 stores, and its main competitor, Office Depot, just recorded its 13th straight quarter of declining same-store sales. Retail sales at brick-and-mortar office products stores fell 3 percent to $9.2 billion last year, said Lora Morsovillo, president of the office supply division at The NPD Group, a Port Washington-based market research firm. Meanwhile, online retailers such as Amazon, which have lower cost structures, are moving into the market, adding to pricing pressures.
"It is very challenging," Garbus said. "Clients have much more access to information now, and business clients, in particular, are very price conscious."
Independent dealers like HBPC need several strategies to compete, said Simon DeGroot of Independent Dealer, an online publication for office products dealers.
First, they need to pool their purchasing power. For the past 14 years HBPC has belonged to the Indianapolis-based Independent Stationers buying cooperative. The coop consolidates the purchasing needs of its members and negotiates with suppliers.
HBPC's pricing is competitive with Staples on most products, Garbus said. "I wouldn't be sitting here today if we weren't in a buying group."
Another key is having a robust e-commerce capability. In February, HBPC launched an upgraded online ordering system developed by Texas-based ECi Software Solutions. It boasts 40,000 products versus 24,000 in HBPC's paper catalog. Forty percent of sales are now online, but HBPC's goal isn't to be 100 percent Web-based, Garbus said. "Our strategy is to build long-term relationships with businesses on Long Island."
A mix of winning strategies
Independent retailers need to highlight the advantages of their local presence -- their ability to quickly respond to clients' needs and provide personal service, said Morsovillo.
Garbus' direct-dial number is on his business card, and he often answers the phone himself. "Customers are not going to get that with Office Depot," said Mike Gentile, CEO of Independent Stationers.
Another tactic: Broaden the product mix so office managers can do one-stop shopping. HBPC began offering break room items such as coffee and water last summer, and increased its focus on janitorial products. The two categories, while small, may grow as much as 10 percent this year.
It's early in HBPC's transition to a new business model, but Garbus is pleased so far. The move to a single distribution center next to the Long Island Expressway has cut overhead and increased efficiency.
His goal is to grow 5 percent this year, but that's tough when office product sales overall are flat to declining. "It's certainly a challenge," he said, "but I'm committed to making it happen, and we're taking the steps we feel are necessary to be successful."
AT A GLANCE
Name: Huntington Business Products Centre Inc., Plainview
Founders: Albert and Amira Garbus
President: David Garbus
Annual sales: $6 million