Hardy Entrepreneur Survives Hard Times in Hardware
Business success stories have traditionally described a rise from rags to riches against great adversity. Sheldon M. Woolf '54, however, has made a success story by just hanging onto what he had a multi-million-dollar retailing firm, National Hardgoods Distributors Inc.
Never heard of National Hardgoods Distributors? Don't worry neither had three out of five stockbrokers surveyed by The Boston Globe in January, despite the fact that the company's stock has been traded over the counter since 1969. Recently, however, NHD has become something of a celebrity in the business news, and NHD shares have been a hot commodity on the stock exchange.
The company attracted attention when it showed up almost simultaneously as one of the "worst" and one of. the "best" firms in New England. Last summer New EnglandBusiness tallied the fiscal 1982 performances of the region's 100 largest service companies and found that NHD with a loss of $1.09 million on sales of $28.5 million was the fifth worst. Then, barely six months later, TheBoston Globe ranked the company first when it tracked the: 1983 stock market performances of New England. firms. In one year NHD stock had jumped by 262.5 percent from $2.00 per share to $7.25 per share prompting Money magazine to place NHD 31st in the top 100 national stocks traded over the counter.
The Globe described the phenomenon this way: "While unknown to many brokers and investors, National Hardgoods has emerged as a case study in corporate comebacks." "Shelly" Woolf modestly explained it by saying, "There is one moral to the story, that if you can get down low enough, then you can have an impressive turnaround if you ever get back to even."
The story behind the figures began in 1960 when Woolf established his Massachusetts based firm as a retailer of hardwares, gifts, and auto parts. He sold most of his merchandise through leased hardware departments in discount department stores nationwide. Eventually he became the largest operator of leased hardware departments, selling his goods in 72 stores in 18 states. By the midseventies, however, it was clear to Woolf that overexpansion of discounting meant that the discount store business would cease growing, so he began looking for other outlets for his goods. By 1977 NHD was operating three of its own hardware stores in Massachusetts (under the name Resnicks), and that Same year Woolf bought five Rhode Island B/G stores. As it turned out, Woolf's move to wards operating his own stores is what saved the firm.
A glut of discount stores, coupled with the recession in the late seventies and early eighties, led to a rapid series of bankruptcies and closings. "I was not really prepared for the erosion of the industry to the extent it occurred," he told The Providence SundayJournal in February. "Our option for growth the stores turned into the only lifeboat out of a sinking business." Between 1977 and 1983, NHD closed 61 of the 72 leased departments it had operated and at the same time opened over a dozen of its own service-oriented hardware stores. The second and third quarters of fiscal 1981 were the darkest hours for the company, with the closing of 43 leased hardware departments and, to top it off, a fire which destroyed the most profitable of the firm's own stores. This was the low point from which Woolf bounded back in such a short time, much to the amazement of those who watch business statistics.
Woolf's business acumen was vindicated in December when NHD had better than a 25 percent store for store sales increase. And in its just-completed fiscal 1984, the firm showed a rise in net income of more than 30 percent from the previous year. Things are looking so good that Woolf plans to open two more stores this year and is considering a stock issue to finance the.addition of four or five more stores each year thereafter. A recent report by financial analysts at Advest Inc. even cited the formerly obscure company as one of "four small specialty store chains that have good cost controls, experienced management, and a concept that may be right for the times." For his fellow '54s, Woolf summed up NHD's success story this way: "Between our 25th reunion and the 30th coming up, we had to dismantle one business and build a new one. It's been great fun, particularly since the story has a happy ending."
But is any of this a surprise to Woolf's classmates who recall the young entrepreneur financing his college education by peddling white buck shoes from room to room? "Woolfie's Whites," they were called. Maybe you can still find a pair tucked away in some corner of an NHD store.
Dealing in large quantities of hardware items from caselots of car care products to barrels ofbolts Sheldon Woolf '54 has made his National Hardgoods Distributors one of the hottestitems on the New England business scene of late.
