Hardware Associates Warns of Closures Ahead - Construction Network Ireland - Construction Network Ireland

Back to News

Next Article

Published in Construction on 06/07/2020

Hardware Associates Warns of Closures Ahead

CNI reports

Dozens of family-run hardware stores face likely closure or takeover as a crisis-driven industry shake-out favours larger chains, according to the president of the Hardware Association of Ireland.

“It’s a wider problem than the pandemic. Younger people haven’t come through the industry. A lot of these family-run businesses are considerably older and would like to exit,” said Sean Moran, who is also chief executive and majority shareholder of HPC Group, owner of several building merchant brands.

He said about 200 of the country’s 300 hardware stores and building merchants were family-owned firms that had toughed out the economic crisis a decade ago. He estimates that 20 to 40 could sell up or shut down in the near future.

“They’re now very weary having this Covid crisis landed on them when they’re perhaps in their mid-to-late-60s and would like to get something for the business and get out. We do anticipate that some independents will not want to go through all this again.”

For larger players, this consolidation could mean growth in a sector with a half-dozen building merchants of scale. These include Grafton Group-owned Chadwicks, Limerick-based McMahons Builders Providers, Brooks Timber and Building Supplies, Northern Ireland-based Murdock Builders Merchants, DPL (Dublin Providers) and HPC, which is short for Home Project Centre.

It employs 270 workers in 15 branches operating under a half-dozen brands, including the group’s most recent February acquisition, Deeside Supplies in Ardee, Co Louth.

Most operate under the TJ O’Mahony label alongside plumbing and heating specialist PH Ross, Commons Hardware, McCarthys Hardware and Wexford’s C+D Providers.

Sales in 2018 topped €70m, in 2019 €80m – and were expected to top €90m before Covid hit. Mr Moran still expects to eke out a profit this year despite a feared 20pc drop in turnover. He forecasts a return to solid growth in 2021, potentially approaching €100m sales by 2022.

HPC plans to open its 16th outlet in Naas, Co Kildare, in September – a move postponed on the eve of the Covid crisis.

The group has only three stores in the west – two in Galway and a third in Tipperary – and wants to open at least two outlets in the midwest and southwest in the coming year.

Mr Moran says HPC has enough cash and loan facilities for acquisitions as smaller, weakened firms face closure.

“We expect a lot of opportunities for the larger companies to make those acquisitions,” he said, adding: “You can’t be reckless with decisions to open new stores or signing new leases or acquisitions.”

The Hardware Association represents 400 firms throughout the supply chain for building materials. It has published a report today appealing to the Government to revive and expand the Home Renovation Incentive Scheme closed in 2018. This provided tax credits for people hiring tradesmen for home improvements up to €30,000 – effectively getting the 13.5pc Vat charged for labour costs refunded.

Mr Moran wants the Government to revive that policy and raise the cap to €50,000.

“People will spend money if a scheme’s there to claim some of it back.” he said. “People like to get money off the Government.”

REF: Independent.ie