Thos. Somerville celebrates 155 years in business as a PHCP distributor
Longevity in overdrive at Thomas Somerville.
In the midst of the Civil War in 1861, Scotland native Thomas Somerville opened The National Brass Works, a small brass foundry in northwest Washington, D.C., that provided Union armies with castings and fittings for cannons and howitzers during the Civil War.
Where Somerville saw an opportunity to meet the demand for brass finishing work around Washington, 155 years later the PHCP distributor that bears his name in the D.C. suburb of Upper Marlboro, Md., still is seizing opportunity as it continues to evolve as a supplier of plumbing and HVAC supplies. Today, Thos. Somerville has blossomed into a distributor that has 21 branches, 10 showrooms and employs around 400 people in the metro D.C. area. Somerville, one of the longest tenured privately held companies in the country, is No. 42 in the 2016 Supply House Times Premier 150 distributor rankings.
“The people who came before us set the tone,” Somerville President Doug Riley says. “It’s who we are today.”
Somerville, an ASA member and part of the AD buying group, continues to be a privately held family-owned company. While no Somerville family members are involved in the day-to-day operations any longer, two family members have seats on the company board of directors. Riley says the groundwork that has catapulted the company to where it is today can be traced back to family member Michael McInerney and to retired President Pat McGowan.
“Michael developed a strong culture of entrepreneurial thinking and made sure each branch manager had the autonomy to run their own branch as if it were their own business,” he says. “That set the tone for who we are today. Michael said it’s your business and you run that location because you know it best. Pat McGowan continued on that same track while making us even more efficient and productive. That model developed a deep culture of how we go to market and how we do business.”
A lot has happened in recent times to help position Somerville for success in the present and into the future. Riley says one big game-changer for the distributor is its 188,000-sq.-ft. central distribution center in Upper Marlboro.
“Every day, each location gets a delivery from the CDC,” he says. “If you ask for something up to 5 p.m., you’ll have it the next morning. It gives 21 places access to $20-plus million in inventory. And we own seven acres adjacent to it. If we ever outgrow it, we have the capability to expand. Michael made sure that facility will set us up for the next 50 years and not the next 10.”
About two years ago, Somerville had its eye further pointed toward the future when it restructured the company and promoted 13 people to the branch manager level and above. “Having that many people available and skilled to promote and not missing a beat is a tremendous accomplishment,” Riley says.
And last April the company purchased a 6,200-sq.-ft. ramshackle building in the Little Italy section of Baltimore and turned it into a thriving Kohler Signature store. In fact, Somerville has made an invigorated push across its retail showrooms by rebranding them as “The Somerville Bath and Kitchen Store.”
“We thought the word showroom had acquired a bad name with the perception it’s just a lot of expensive things on display people can’t afford,” Somerville Marketing and Communications Manager Samantha Sauerhoff says. “It’s a simple change in semantics. The message is the showroom is not intimidating and anyone can make a purchase.”
Somerville Executive Vice President Dan Kelly adds: “Back in 2007, we didn’t emphasize showrooms — it was low single digits in terms of overall revenue. Now we’re in double digits and are hopefully headed toward 25%. We are involved with the custom builder and into cash sales transactions, something we needed to do to maintain market share. As things have evolved over time, many in the plumbing trade have relinquished the ability to buy their own product and have turned it over to the builder. It’s important to get in on that custom homebuilder or risk losing a lot of market share.”
Upping the ante
In addition to taking some risks on more involved product lines that offer some sort of exclusivity and present greater opportunities for profitability, Somerville has put measures into place to make sure its customers have the greatest amount of information at their disposal via the addition of sales and product managers for plumbing and HVAC.
“Besides driving sales, they also serve as liaisons between the salesforce and the purchasing department,” Somerville Vice President of Plumbing Sales Joe Pioli says. “They are instrumental in choosing new products where we see opportunities. They are a great go-between. They know what the customers are looking for and can assist vendors in helping us achieve those goals, as well as help our purchasing department make a decision on which way to go on a product.”
At the same time, the company has an intricate handle on the inventory sitting on its shelves. “We manage our inventory better than the average,” Vice President Purchasing Scott Weir says. “We don’t hang onto the old stuff. The likelihood something is going to sell 24 months later is next to nothing. This company makes smart decisions and is not afraid to take risks on products that seem promising. We take conservative risks, making sure we aren’t investing in particular inventory too heavily or stretching out too much into a new category.”
On the heating and air-conditioning side, Vice President HVAC Ray Mikell touts the company’s new 24-7 HVAC hotline that currently is in test mode in certain territories. “If it’s after hours, all a customer needs to do is leave a detailed message and we guarantee a callback in 15 minutes,” he explains. “Our goal is to make our customers’ lives easier and solve problems with the push of a button. We want our customers to use us as trainers, as their tech support resource and as product specialists whenever possible. We can control their experience when that happens and we believe that raises customer service to the next level — regardless of time of day.”
Somerville also is ramping up its IT and back-office processes via the installation of a new ERP system, as well as expanding its online presence. “We have a number of initiatives in place to help increase online revenue,” Vice President IT Pete Misiewicz states. “We’ve integrated the online with our brick-and-mortar presence. A customer can order something online and come to the branch 30 minutes later to pick it up. Somerville values IT and has made great strides. This company has been in the IT game since early 2000 and sees the value of it and, as a result, we are very strong in that area.”
Current day, Somerville isn’t afraid to lean on its past and is definitely not afraid to keep looking into the future. “History is important,” Kelly says. “We can introduce ourselves to a new customer as a 155-year-old continuously family-owned local company that reinvests a significant amount of profits back into the company so we can continue to have resources to match up to the customers’ needs.”
Riley adds: “I have to mention George Patton who said the moment you dig your fox hole, you dig your grave. You have to be on the offensive and be aggressive. Short-term we will open new locations where it makes sense and continue to develop our employees and added customer services. We will never rest on our laurels and past accomplishments as we continue to work hard at being better every day.”
This article was originally titled “Longevity in Overdrive” in the September 2016 print edition of Supply House Times.