One of the largest Canadian buying groups.
At the peak of Canada's short but hot summer season, negotiations were finally concluded on a high note between Gest-Accor Inc., of Laval, Quebec, one of Canada's largest home furnishings and consumer electronics buying groups, and John Gillberry, major shareholder in the venture, with his partner, Working Ventures Canadian Fund.
Happy with the $50 million deal, Gillberry, Gest-Accor's new President, describes his vision for the future. "We'll provide new products for the dealer members. For example, retail finance programs, point-of-sale systems and inventory control systems. There will be buying group opportunities which would be looked at as group buys and consolidated buys on behalf of our entire membership, leasing products and financial services, private lock-off models, original equipment and product opportunities. And, of course, special pricing opportunities that we can get to through the collective bargaining unit of our buying group membership.
"Gest-Accor will be re-capitalized to take advantage of other merger and acquisition opportunities that exist in the marketplace." said Gillberry. "We purchased the company as a platform business in order to grow these types of businesses in Canada. We are re-energizing what I consider to be a specialty marketing and financial services business."
Back in 1978, Yves Royal founded Gest-Accor in Quebec as a national buying group, servicing independent specialist retailers in furniture, appliances and electronics through negotiating with major manufacturers and making volume purchases. The group has acted as an intermediary between its national network of retailers and more than 275 North American suppliers. Most of the 500-plus member-dealers are independent, mid-market retailers who rely on the buying power and centralized service of Gest-Accor to remain competitive.
Gest-Accor offered extended repayment terms to suppliers, guaranteed 48 hour turn around time when dealers required action and response, in-house industry seminars, business management software systems for furniture, informative monthly newsletters and extensive marketing support. The list goes on to include group rate insurance, bankcard discount rates. flexible consumer finance plans, Canada Post and custom brokerage group rates and periodic flyers covering furniture, appliances and electronics. A helpful strategic marketing calendar was devised, organized buying trips were planned and representation was provided at industry trade shows when dealers could not attend themselves. The group's slogan "National in Scope, Regional in Approach" worked well.
National Vice President, Michel Gervais, predicts rapid growth. He's presently hard at work developing a comprehensive strategic marketing plan for the new company. "Gest-Accor has always been a vibrant, viable company, but with new ownership, new vision, and new products, the sky is the limit! John Gillberry brings a strong mix of financial and marketing knowledge and experience to the organization which will help to accelerate targeted and meaningful expansion of Gest-Accor's dealer base."
Canadian suppliers endorse Michel's optimism. CAMCO Vice President Daniel Walker said, "I foresee that Gest-Accor will take a new pace in this changing market. We are going to join forces, and I am very positive about a bright future." Mark Redmond, President, Thomson Consumer Electronics Canada (RCA, GE, Proscan) "We at Thomson have a long history with Gest-Accor and their members. We are looking forward to the new ownership, and are excited about the new opportunities they will bring to Gest-Accor dealers." Pat Thody, President of Simmons Canada and the Ontario Furniture Manufactur-ers' Association, "This new arrangement will strengthen the buying group. We're delighted when something positive happens in the furniture industry, and we're looking forward to this very positive move." Albert Labelle Junior, Vice President AVCO Financial Services Canada agrees. "Since Yves Royal founded Gest-Accor many years ago, we have enjoyed a close partnership, particularly during the past two years with Michel Gervais serving as a member of the National Advisory Council. We at AVCO will continue to offer our financial services as a preferred supplier to Gest-Accor members. The future looks very positive." And Cec Soucie, Vice President General Manager Toshiba of Canada applauds the "Good news for the members, most beneficial for them, the two principal parties and also their suppliers. We've had 15 years of good business relationship as preferred suppliers to Gest-Accor and look forward to many more productive years of good association." Bruno Rodi, Summum Design Inc. President was succinct, "This is going to be a plus for our industry!"
In North Vancouver, British Columbia, James Patterson, sole owner of Colony Home Furnishings, has been a dealer-member for "Many years! If you're in the retail business anywhere in Canada, a small independent retailer dealing interprovincially or even multinationally, it's difficult to compete. When we joined Gest-Accor not only were we better able to compete, it also provided some degree of exclusivity. Gest-Accor is prepared to leave their independent dealers to function independently, and not require their dealers to buy certain products. We independents are not necessarily conformists, we want to do our own thing in our own area.
"Another important factor is Gest-Accor's very good people. Tom Mueller works closely with us and he is very well informed. If we have needs or problems he deals with them in an effective and timely manner. With his services and the strength of the group nationally, it has worked for us, a win-win association. They've taken good care of us.
"Our product mix has changed over the years. We are in bedding and major appliances now. When we began operation in the late '60s, almost 30 years ago, we were a TV, stereo and appliance store, but with the changing of retail and the arrival of the big box retailers, we gradually phased out of TV and stereo. But we're stronger than ever in appliances now. Over the years we've carried floor covering, draperies, picture framing, lamps,. upholstery and casegoods. Fifteen years ago, we moved to a new larger operation and discovered that some of the products we were handling at that time didn't lend themselves to the new location. We went into bedding in a big way and have an extensive selection and display. Our combination may seem rather unlikely, but it works well for us. We enjoy our association with our suppliers, and have a loyal following amongst our customers.
"As we near the end of the century, it is an ever-changing environment we've found ourselves in. Every day we come to work it's a whole new ball game! Our volume has increased, but also we've tried to simplify our lives and focus on areas we enjoy most."
Joice Sweanor Appliances, Port Hope, Ontario, joined the Gest-Accor family "Just after The Great Flood!" laughed Paul Sweanor. The business was founded in 1945 by Paul's father, Trevor, and his partner Clayton Joice. The partners parted company in 1958 when Joice went into the electrical contracting business. Originally the store carried only appliances, but furniture was added to the mix in 1965 when they moved to a larger location on Main Street. In 1980, The Flood washed them out. Explained Paul, "The locals say there's a flood every 50 years and the time had come!" They moved again, this time to what they thought of as temporary quarters in a vacant warehouse in an industrial park. "We've been here ever since," said Paul. "We eventually bought the whole building, and it's proved to be a very good location for us."
The store now devotes one-half of its floor space to furniture, the other to appliances and home electronics. "We wouldn't want to be a specialist in any one of these fields," said Paul.
"Gest-Accor has been the means for us to be more competitive with larger dealers, chain stores and department stores. It's narrowed the gap. We get better pricing on products, better rebates to fall back upon. And we like the advertising support. We get a steady parade of flyers, six each year. If I had to do the flyers myself, the cost would go way up. I'm optimistic about the new ownership. Fresh ideas are positive. It's exciting!"
We should let the new President have the last word. "The overall industry impact is that a rationalization of the industry will create benefits for both the retailers and the manufacturers, and fresh capital and personnel badly needed in this industry. Our business venture provides both."
If you've not already planned your August schedule, add the August Toronto Home Furnishings Market (August 10-13) and the Gift Show (August 11-15) running concurrently at The International Centre, nearby showrooms and the Congress Centre close to Toronto's Inter-national Airport. Plenty of exciting introductions, Market specials and lots of things to see and do in Toronto. The weather's bound to be good!