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Hermitage Changes Business Model to Suit Post-COVID World

Hermitage 125x86

 

Hermitage 400x275October 7, 2022

As times changed over its nearly 80-year history, Hermitage has changed right along with it. Even the name has evolved in keeping with its customer base — from Hermitage Distribution Company in 1944 to Hermitage Electrical Supply in 1946 and later from Hermitage Lighting Gallery in the 1980s and ’90s to its present Hermitage Design Center.

Over the next 12 months, Hermitage Design Center will be transitioning to a Pro model, with an emphasis on catering to the builder and designer trades. Most significantly, the business has sold its flagship building and will be relocating staff and the showroom roughly 10 minutes away to a second, smaller Hermitage location it has operated for some time.

“With the development of downtown, we’ve had the opportunity to gain significant benefits by selling our property,” noted owner Jack Fleischer.  “We want to thank our retail customers of middle Tennessee and southern Kentucky for all of the support over our 78 years in business in Nashville,” he added.

Moving forward, retail customers can work through their respective contractors or purchase directly online. Hermitage Design Center will continue its pro model with appointments only to the trade, operating as normal. Builders, designers, architects, developers, and our National Accounts customers will continue to have sales representatives who will work directly with them.

“We think this is the right time and the right approach to help benefit our valued customers. The pandemic has shown us that we can continue to grow without a significant showroom presence,” Fleischer stated.

According to general manager Steve Falk, consumer shopping patterns are not the same since 2020. “People’s buying habits have changed. Even with our doors locked for three months during COVID, we still had some of our best months ever,” Falk remarked. “We have always counted the number of retail customers who walk in every day. Pre-COVID, we were averaging about 100; after COVID, it dropped to about 25 people a day.”

From better-utilizing space to reduced utility costs (i.e. not needing to keep HVAC and electric on weekends), the move to smaller quarters without sacrificing inventory makes good financial sense, Falk explained.

“Retail walk-in traffic has been about 15 percent of our business. Moving to this appointment-only Pro model lets me and my sales team focus more on growing the builder and designer business,” Falk stated. “It allows me to spend a lot more time with the designer or builder doing an entire home [than a consumer coming in for a vanity fixture or chandelier].”

Since the new location is in a commercial area that does not  generate drive-by traffic from homeowners, Falk doesn’t anticipate having to turn homeowners away — and if someone should come, there will be staff ready to help (no employees will be laid off as a result of the physical downsizing).

“We will not be stocking and displaying inventory [in the new location], as it will be more project-based and in a gallery format,” Rachel Fleischer stated. “We will have a warehouse and will stock as needed for jobs and single-family home builders.” 

Consumers are now very comfortable buying lighting online. “If you look at retail sales in our industry [regarding showroom traffic] over the past several years, it’s been flat or maybe fluctuating up/down by 5 percent,” Falk said. “However, it’s the ecommerce model where growth has been up 40 percent each year.” Hermitage expects to maintain that growth momentum in ecommerce sales with its appointment-only trade model.

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