THE Montvale Massacre!
Buck Wheat has only been home for a few days and already she, Guy and I have new pairs of “Beats” noise-cancelling headphones on order. A cocoon designed to protect you from ANY sounds-including words-the world around you may make!
Despite the tight housing compared to a month ago, I thought things were going well; right up to the moment Buck told me we needed three pairs of the “sounds of silence” headsets!
In-fact, things ARE going well here and I hope you and your families are also getting through the pandemic with as little pain as possible.
But we still need the headphones!
One house, four adults (ALL on their own schedules), three of whom are working from home, taking phone calls, making podcasts AND eating lunch in the kitchen-which is now my office! Peace and quiet is more aspirational than actual in “Casa Lipton!” The effects of the coronavirus outbreak on independent paint retailers are the words that my family is trying to block with their new noise-cancelling headsets. The topic is omnipresent in every phone call; I’m sure that they would say incessant!
Included in the din of conversations that my family is forced to endure, was some good news, some light at the end of the tunnel. Yesterday, I heard of the first dealers in New York City who were able to reopen.
I‘ll admit my Yiddish is a bit rusty, but I know a good time to say Mazel Tov!
Recovering from the economic impact of this pandemic is going to be a long journey for many dealers and that is certainly true for those hardest hit by this event: New Yorkers. But the journey of 1,000 miles starts with the first step and you can’t sell paint through a locked door so re-opening is that first step!
I wish them all, my closest paint comrades, good fortune.
There’s another group of people that are going to need good luck if they are going to come out of this mess on the right side of fate: Benjamin Moore.
The network of independent Benjamin Moore dealers, particularly their largest (dollar-volume) segment of dealers-traditional paint & decorating stores-are going to take the brunt of this economic hit and that means so will Benjamin Moore! Unless there are another 5,000 Ace dealers around the United States that I’m not aware of, then “Omaha, We have a problem!”
Benjamin Moore is going to need its paint and decorating dealers to succeed if they plan to survive this event as a significant player in this channel. And that will not happen by providence, they will need a plan.
To date, they have not communicated that plan to dealers.
In-fact, during this crisis Benjamin Moore dealers have received scant communications from Montvale and what communications they have received has been contemptible and of little value. To me that means that either: Benjamin Moore is unaware of the extent of their current problems OR they’re aware and don’t want to talk about it.
The line in Vegas says bet the latter.
Their historical reluctance to discuss difficult issues with their dealers is at least part of the reason for their corporate silence. During the greatest economic crisis in nearly a century, Benjamin Moore has said nothing that helps dealers answer the only question that matters:
“Is Benjamin Moore working on a plan to address the effects of the coronavirus outbreak on their core business: the paint & decorating store?“ and “How will dealers be engaged in that process?“
Dealers are entitled to the answers to those questions. And plenty of other ones too!
The effects of the outbreak on independent retailers in general has been well noted by the national media so I won’t rehash that here. But for Benjamin Moore, the money from government funded bailouts such as the PPP will not address structural issues that exist for them which go beyond the “typical” concerns caused by COVID-19.
For starters, the residential repaint segment is badly damaged. This represents the largest segment in their current business model; approximately 65% of their current gallon volume. While I certainly don’t think that this segment is dead forever, it’s dead now and will remain so for the remainder of 2020. While it is the job of dealers to work out the kinks of how they sell and deliver paint in a world of social distancing, it’s Benjamin Moore’s responsibility to do all they can to replace that lost volume nationwide and if they want to maintain their market share. Having the largest segment of your business close up shop overnight was not their fault. But now it’s their problem.
Additionally the hardest hit part of the country, the 250 miles corridor between the New York and Boston metropolitan areas, represents 40% of their nationwide volume. As the region hardest hit by this outbreak, it will be among the slowest to recover economically, which only extends Benjamin Moore’s pain. Ace will help them in this area if they lose a lot of dealers BUT, it’s a bad trade to have to make. The average paint and decorating store purchases five times the amount of paint from Benjamin Moore as the typical Ace store.
As if all of that is not enough, the age of their dealer network is as concerning as any other issue Benjamin Moore is dealing with. Long a concern for Benjamin Moore, their failure to get younger over the last number of decades will leave MANY otherwise “solid” but older Benjamin Moore dealers with difficult choices to make as they come out of this event: Dump their savings into a paint store which they were going to sell in a few years anyway or leave the doors locked and keep your money!
THAT is not a problem for dealers! But it IS a problem for Benjamin Moore.
Some otherwise healthy dealers will make the self-enlightened decision to close their stores. One 60-year-old dealer I spoke with told me that with the losses he has recently sustained, he needs to put $250K into his business to reopen the doors and set it up for success. Yet his plan remains to retire in five years. He KNOWS, that putting that money into his business is tantamount to kissing it goodbye. Considering the lack of value in and the illiquid nature of Benjamin Moore stores as retailers look to get out, (a topic I have some recent personal experience with). This dealer calculates that over the course of the five years he has left in the business, he would be better off financially by just closing now!
Saving a paint business is a young person’s game.
THE Montvale Massacre!
I was never asked to share my views on the current state of Benjamin Moore or their dealer network with Chairman and CEO Dan Calkins. Or anyone else for that matter! A fact that I find vexing considering my connection to their retailers and the fact that they were paying me!
Still though, Dan showed that he drew similar conclusions to the ones I offer above: Last week, in what insiders are calling the “Montvale Massacre,” he laid off approximately 15% of his non-manufacturing staff.
About a week before the “Montvale Massacre” in a move that got even less attention, Benjamin Moore also let go all of their contract employees.
That included me!
And that means that for the first time in 113 years, there is no association between the family of Isaac Lipton and one of the first salesmen my great-grandfather ever bought paint from: Mr. Benjamin Moore.
That makes me sad.
I’m going to have a lot to say about what has been without a doubt the most complicated relationship of my business career: my 30+ year relationship with Benjamin Moore & Co. and their employees. I look forward to writing about the 30+ year relationship with the (only) men who have served as its CEO.
But not today!
All that is going to take me time to figure out: I’ve got over 30 years of notes to go through! And now is not that time.
To my former coworkers, including those recently RiF’d, I am really grateful that we got to spend some time on the same side of the counter! I enjoyed meeting so many new faces as well as getting to work side-by-side with decades-long friends.
While sad, the timing of this separation works well, at least for me and independent dealers. During this crisis I can do more to help dealers from outside Benjamin Moore than I ever could have ever done from inside the walls of Montvale.
For newer readers: Now do you understand the tape in the pro pic?