For many, 1999 was a flat year
By Industrial Distribution Staff -- Industrial Distribution, 12/1/1999
Sales of hose and accessories went flat in many regions of the country this year, according to members of the National Assn. of Hose and Accessories Distributors.NAHAD president Lee Helfer says some members report growing pressure on profits as a result of industry consolidation and consortiums, which are increasingly taking on national accounts with long-term contracts.
"We've heard from more people joining consortiums or taking part in second tier [relationships]," he says. "Everyone's looking for an opportunity to get their sales back to where they were."
Many Midwest distributors are struggling and Helfer's company, Specialty Hose Corp. of North Canton, Ohio, has felt the pressure from consolidators and consortiums. Sales are below levels of two and three years ago, he says. To combat that, his firm is looking for new markets and concentrating on the high-pressure gas and aerospace industries, for example.
One Southeast distributor, Richmond Supply Co. in Augusta, Ga., reports a solid but not spectacular year with sales running about three percent above 1998 through November. Rubber division manager James Wallace says depressed paper prices resulted in flat sales to paper mills, a key customer segment, while chemical plants and construction contractors have helped make up the difference. Revenues should reach nearly $10 million this year.
"It's a slowdown for us," says Wallace. "We've probably been on average increasing about six to seven percent" in recent years.
Richmond Supply is trying to expand beyond its traditional boundaries and make new inroads with newer customers like contractors. One way of doing that, Wallace says, is for salespeople to build on their contacts with plant maintenance buyers and make it convenient for contractors to those facilities to buy products like hydraulic hoses for heavy equipment.
Moraine Industrial Supply, Inc. of Dayton, Ohio recently joined Induserve Supply, a Butler, Pa.-based marketing cooperative. Vice president Richard Perkins says that has increased his firm's visibility and availability to be a one-stop shop. Moraine Industrial has since added on some new products and hopes to take advantage of national contracts. Perkins expects sales will be close to $6 million for 1999, about the same as last year.
He says the main trend is new players that have picked up hose lines and "go in topping the market with price. You have some customers that react to that, and others that have brand loyalty or loyalty to us."
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