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Thursday, Mar 28, 2024
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At 125, San Diego Hardware Ages Well By Evolving Well

This month San Diego Hardware entered its 125th year of business, making it the seventh longest continuously operating business in the city.

“The key is to identify the fact that things are changing and then trying to figure out how you fit in as the market evolves,” said Bill Haynsworth, 60, who, along with Rip Fleming, 66, bought the company from Haynsworth’s father, Don Haynsworth, in 1983. “What other business owners need to keep in mind first and foremost is that business is a moving target and constantly evolving. If you don’t change with it, you will die.”

This isn’t the only strategy that has kept San Diego Hardware afloat for over a century; its success can also be credited to its focus on superb customer service. Ultimately, what has given San Diego Hardware staying power is that it hasn’t been afraid to reinvent itself to fit consumer and market needs all while keeping expertise and friendly service at the forefront. This has included, switching gears from selling traditional and sometimes unusual hardware to commercial hardware to featuring decorative builders’ hardware and moving the store out of downtown San Diego to accommodate its growing consumer base to e-commerce, among other adjustments throughout the years.

Creating a Niche

“There are a couple things San Diego Hardware is doing right,” says Hitha Herzog, chief research officer at H Squared Research, a New York City-based research firm focused on retail and consumer spending. “First, it’s evolved with the customer. The business made it extremely easy for customers to get what they need, from ship to home options, a user-friendly website and accessibility to the brick and mortar store. San Diego Hardware started to brand itself as the destination for hinges. Creating a niche within a larger retail environment while also keeping overhead low are some of the reasons why the store has stayed in business for so long. Sometimes you just want to stick with what you know despite the ever presence of the Amazons and Home Depots of the world.”

The lessons to be learned? Never get complacent and never resist change, says Bill Haynsworth, and the year-over-year revenue increase of San Diego Hardware speaks to this business model’s success. Today, the store is ringing up over $10 million in sales a year, with half of that coming from its hinges-based e-commerce site, hardwaresource.com, which launched in 2004. Next year, San Diego Hardware is slated to rake in nearly $12 million in total sales and estimated to grow 15 percent with the help of a revamped hardwaresource.com site, as well as a planned launch of San Diego Hardware sister site with an eponymous name, which will aid in selling even more decorative builders’ hardware online.

“I’ve been a vendor for San Diego Hardware for 15 of those 125 years, and it’s clear that their formula of expertise, selection and service is a successful one,” said James Sailhamer, manufacturer’s representative for Bell Marketing, adding that on top of San Diego Hardware’s ability to pivot to fit the climate, the consistency of the business model is also a reason for its longevity. “Our industry continues to evolve, but those core values will position them to remain a market leader in the future.”

Big-Box Competition

For the first 100 years, San Diego Hardware, founded by Haynsworth’s great-uncle Fred Gazlay and three business partners and originally located in downtown San Diego, ran as a hardware store that simply had a huge selection of hardware with fair pricing and good service. In fact, the motto was “if you couldn’t find it in San Diego Hardware, then, you didn’t need it,” said Haynsworth, adding that back then the store had 50,000 products like left-hand extractors, among other things, and grossed $1 million in sales annually. But in 1985, big box competitor Home Depot opened 10 shops in the county, and the store took an inevitable hit. The owners knew they had to switch things up.

“At the time, [the direction we went in] was commercial industrial hardware,” said Haynsworth, “and that umbrella meant selling products to facilities like SeaWorld and school districts and the Navy.” San Diego Hardware eventually landed a five-year contract with the U.S. Navy to outfit seven San Diego bases with maintenance supplies. All told, during that time, sales volume was $2 million annually.

Decorative Builders’ Hardware

But, when the five years were up in 1997, Haynsworth and business partner Rip Fleming found themselves back at the drawing board. That’s when the partners went from selling nuts and bolts to commercial hardware to focusing on selling decorative builders’ hardware. After deciding one day to put an array of such on the window displays, San Diego Hardware had an uptick in sales literally overnight, and, within a year of not reupping the military contract, it replaced all of the incoming business with the sales of decorative builders’ hardware.

A Profitable Move

As a result, the store’s market of customers grew from a five-mile radius to other towns like La Jolla and Rancho Santa Fe. “Everywhere a home was being built, that’s where they came from,” Haynsworth said. The only problem was they didn’t like coming downtown. So, in 2006, the Fifth Avenue store shut its doors and the 22,000-square-foot showroom in Kearny Mesa opened up, and, overnight, the business had a 40 percent increase in sales. Around the same time, San Diego Hardware launched its very first e-commerce site – which sells more than 4,000 hinges and offers more than 43,000 related items — and within seven years of its inception, accounted for half of the sales volume, shipping several thousand orders a month and bumping the total revenue for San Diego Hardware up to $5 million a year.

“The path that has kept us in business went from selling nuts and bolts to builders’ hardware to, now, e-commerce — it’s what has kept us alive all these years,” Haynsworth said, “I’m sure in 1985, when Home Depot came, if we hadn’t made the decision to switch up, we wouldn’t be here.”

Now, San Diego Hardware is trying its hand at a new method (to keep up with the Amazons of the world): drop-shipping. “We email manufactures and they ship directly to customers, who then receive their orders tomorrow or the next day,” explains Haynsworth. “It happens faster and fulfills the desire customers have now to get products fast.” As a result, the business’s average dollar amount per sale per customer has gone up.

“That’s where everything is going,” Haynsworth said. “If you aren’t on that wagon, you won’t last either in retail.”

San Diego Hardware

Owner: Bill Haynsworth and Rip Fleming

Revenue: More than $10 million a year, according to company

No. of Local Employees: 35 employees

Headquarters: Kearny Mesa

Year Founded: 1892

Company Description: Hardware store specializing in decorative hardware

Key Factors for Success: Continuously evolving to meet ever-changing demands

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