Healthy outlooks for Omni and Luxury Products Group
Both Omni and LPG report increased sales at 2014 spring meetings.
The Omni and Luxury Products Group buying groups had good news to report at their recent spring meetings held at the Loews Royal Pacific Resort in Orlando, Fla.
Omni President Bob Hoff told the more than 1,000 attendees that group sales were up 10% over 2012 levels and total sales to vendor partners had again moved over the much-sought-after $1 billion barrier.
The news was even brighter for the growing LPG, which reported a massive 36% sales increase over 2012 levels.
“2013 was a good year,” Hoff told Supply House Times in a video interview available at www.supplyht.com/video. “It was a lot better year than we thought it would be. Numbers for our group as a whole are tremendous. There is a lot of optimism.”
Omni revealed results of its January 2014 Business Conditions Survey which presents market data based on member responses to a variety of questions covering the last six months of 2013 (compared to the last six months of 2012) and the next six months of 2014. The survey represented 69% of Omni’s current membership.
The survey reveals 77% of respondents saw total sales increase over the last six months of 2013 compared to sales the last six months of 2012. In terms of construction segments, 57% of respondents report new construction sales increased, while 48% say remodeling business increased and 46% report commercial business increased. On the industrial side, 13% of respondents say business increased, while 39% report sales stayed the same. Inventory increases were reported by 48% of respondents.
Geographically, Omni regions III (Mid-Atlantic/South; 77%), V (West Coast; 76%) and II (Northeast; 74%) had the largest percentage of members reporting total sales increases. Region IV, which stretches from Colorado to Louisiana and includes Texas, led the way with a 14% average total sales increase among responding members.
Looking ahead, 79% of survey respondents expect total sales to increase the first six months of 2014. All Region III respondents (100%) expect sales increases. New construction again leads the way with 69% of respondents indicating an expected increase in total sales in that business segment.
“Eighty percent of our members feel there will be an increase in sales. That’s very positive going into 2014,” Hoff said.
A telling statistic in the projected conditions portion of the survey is the low percentage of respondents who expect total sales to decrease in the next six months of 2014. Overall, only 1% of survey respondents expect total sales to decrease during that time frame. By sector, the same holds true with remodeling (1%), commercial (2%), industrial (3%) and new construction (4%) — all registered slim decrease percentages.
Irons in the fire
Hoff also revealed two key initiatives the buying group is hard at work on. During the meeting, two seminars were held on the subject of an Omni-specific captive health-care plan.
“We’re doing anything we can to augment what our members are doing and at the same time we want to respond to their concerns,” Hoff said. “One of their concerns is the Affordable Care Act. Insurance tends to be the second-highest item in a company’s expenditures next to salaries. Insurance costs are going up and they would have gone up a little regardless of the Affordable Care Act. We’re looking at some way we can help our members in that arena and right now we’re looking at a captive insurance program. So far it’s had a great response. It’s moving forward and we feel very confident about it.”
Another benefit to members is the establishment of the Fill It Now database that will allow Omni member companies to search other Omni members’ inventories via www.FillItNow.com.
“We started this about three years ago and have put a lot of time and effort into it,” Hoff said. “This site gives a member the ability to go in and search other Omni members’ inventories looking for product. They will be able to search across the country in a warehouse that is tremendous in size. When you have a membership of 250 companies with more than 600 locations, that’s a lot of inventory you can search through. The blueprint for this is in place and it’s only going to grow.”
LPG on the upswing
Once again, Luxury Products Group, now in its fifth year, showed impressive increases in sales and membership.
“We not only were up 36% in sales but we increased in the number of members and vendors we have,” LPG Executive Director Linda Hoff said. “We’re looking to add even more members and vendors as everybody’s needs change, the economy continues on the upswing, and showrooms grow and look for new vendors.”
Linda Hoff sees several factors that attribute to the group’s rapid growth. “Some of it definitely is the economy,” she said. “But as our members are educating themselves on the showroom business, they are seeing their needs changing from strictly being wholesale to showroom. They are developing relationships with vendors and bringing those vendors into their showrooms.”
The education component, Linda Hoff added, is another major benefit LPG members are taking advantage of. “Developing relationships and learning about new products are big benefits for LPG members, but being involved with American Supply Association and Decorative Plumbing and Hardware Association to educate their showroom personnel is another definite benefit for our members.”
Linda Hoff sees even bigger things on the horizon for LPG.
“The sky is the limit,” she said. “I definitely think we can double our business the next two to three years, increase membership and help our vendors grow a lot, too.”
The 2015 LPG and Omni meetings will be held in late January at The Westin Kierland in Scottsdale, Ariz.
“This is all about the people we have in this group,” said Bob Hoff, who is celebrating 30 years with Omni in 2014. “It’s a fantastic group that has great camaraderie. The friendships that have been developed among members and vendor partners are fantastic and that’s helped us grow significantly. We reached the billion-dollar level again after the downturn and we’re doing nothing but moving forward.”
For additional video interviews, including one with Omni Chairman of the Board Grover Martin, visit www.supplyht.com/video.
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