Profile | Industry | Track Record | Competitive Advantages | Growth Strategy
Business Profile
Coast is a leading independent supplier of major household appliances. Based in Vancouver, British Columbia, Coast sells to developers and builders of multi-family and single-family housing, and to retail customers throughout Western Canada.
Coast’s sales are almost evenly divided between developer and builder customers, and retail customers. Currently, Coast operates 15 store locations and four warehouse distribution centres serving the four western provinces.
The Industry
Canada’s major household appliances industry serves a large and
growing market, with annual sales of approximately
$3.3 billion.
Well-established industry trends that management believes will continue to drive strong consumer spending on major appliances include:
- Favourable demographics and population growth
- Robust housing start and resale activity
- Expanding house sizes
- Growth in home renovation activity
- Heightened focus on the family and home living environment
- Increasing prominence of major appliances in the home
- Ongoing product innovations
- Continuing shift to more energy-efficient appliances
Track Record
Coast has a track record of strong financial performance extending back to the inception of the business in 1978. Despite economic fluctuations, Coast has maintained a steady and stable growth trajectory.
Competitive Advantages
Coast enjoys a number of sustainable competitive advantages that management believes will enable it to continue to grow sales and cash flows.
Focused Product Category
Coast’s singular focus on major household appliances means it can offer customers the convenience of one-stop shopping for all of their major appliances needs. Coast is able to optimize sales revenue through cross-selling and cross-promotion between major household appliance categories.
Wide Selection of Recognized Brands
Coast sells more than 30 brands of major household appliances. Most competing retailers offer a much narrower selection.
Superior Value Offering for Developers and Builders, and their Customers
Coast has tailored its wholesale operations to meet the needs of the residential construction and renovation industry. Unlike other major appliance wholesalers, Coast provides developers and builders with just-in-time delivery and installation. Its inventory management system is specifically designed to accommodate the typically staggered and irregular construction schedules of residential developers and builders.
Due to its size and strong relationships with its suppliers, Coast is also able to provide long-term contractual purchase commitments. In contrast, the few appliance manufacturers who still sell directly to builders and developers usually require them to take delivery of a large quantity of products at one time, and on shorter lead times.
Product Presentation in Showrooms
Each of Coast’s 15 store locations feature showrooms with working designer kitchens that showcase a full complement of brand names and products. Customers can “test drive” and easily compare a wide range of models at various price points.
Experienced, Knowledgeable Sales Force
Coast has dedicated sales teams focused on growing its business in both the wholesale and retail markets.
In selling to developers and builders, Coast concentrates on establishing close working relationships. Its sales associates function as part of the development team and often visit customers at their office or job-site to help determine their exact requirements. Coast then schedules delivery and installation in step with planned completion dates.
When selling to retail customers, Coast focuses on educating them about the differences between appliance models, helping them choose the right solution for their budget, size of home and lifestyle.
Strong Supplier Relationships
With 15 stores, Coast enjoys substantial purchasing power. Coast also benefits from strong, collaborative supplier relationships, forged over the course of many years of continuous business. Coast regularly undertakes joint initiatives with suppliers, such as combined promotions and product launches, co-development of products and exclusive product offerings.
Experienced Management Team
Coast’s senior management team is set apart by the depth and diversity of its collective knowledge and experience, and the long-standing commitment of individual members.
- President and CEO Blain Lawson, is an experienced business leader with more than 20 years of senior retail management experience and a demonstrated ability to manage rapid growth. Prior to assuming the leadership of Coast from Harlow Burrows in January 2007, Mr. Lawson was with the Hudson’s Bay Co. for 18 years. At the Bay, he headed up that company’s largest strategic initiative, Hbc Home and its fastest growing division, Home Outfitters.
- Vice President and CFO Jack Peck, a Chartered Accountant, joined Coast in 2005, bringing 20 years experience as a Chief Financial Officer with both publicly-traded and large privately-held companies.
- William Smith, Vice President, Sales & Marketing – Multi-Family, joined Coast as its second employee in 1978.
- Steve Raben, Vice President, Sales & Marketing – Single-Family, has been with Coast since May 1990.
Growth Strategy
Coast’s growth strategy is threefold:
- Enter new western Canadian markets and explore expansion into Eastern Canada
- Increase sales from existing stores
- Enhance profitability
1. Enter new western Canadian markets and explore expansion into Eastern Canada
Over the near term, Coast is working to increase its geographic coverage in both Alberta and British Columbia by opening new stores and relocating some existing stores to higher traffic locations. With the strong encouragement of its suppliers, Coast is also investigating expansion into the Ontario market.
Coast will also look for the right opportunities to grow its business through strategic acquisitions in the highly-fragmented major household appliances retail market.
2. Increase Sales from Existing Stores
Coast is boosting the sales performance of its existing stores by continuing to enhance the appeal of its showrooms as a destination point for retail shoppers. Coast is also capitalizing on its growing consumer awareness by continuing to build on the strength of its sales force, and by tailoring its product offerings to meet regional preferences and demands.
3. Enhance Profitability
Coast has relocated a number of its existing stores into higher-traffic areas, a proven sales enhancement strategy. It has also increased its focus on innovative, higher-margin products. To optimize efficiency and continue to increase inventory turns, Coast has refined its inventory management. Finally, Coast is working to streamline non-selling functions.