Rapid True Value store at Lane Plaza, on Constant Spring Road. The chain is being expanded in and outside of Kingston. - File
Hardware and Lumber Limited, a subsidiary of the GraceKennedy group, is looking to build its chain of stores operating under the name Rapid TrueValue in and outside of Kingston.
But chief executive officer of GK Investments, Don Wehby, under whose portfolio the retail operation falls, said Tuesday the size of the investment to be made was dependent on the finalisation of a strategic plan that he was in the middle of formulating.
That plan, he said, covers the entire GK Investment division, whose operations span commercial banking, investment and securities, remittance, insurance and retail.
But Wehby did disclose that in addition to the three retail stores at Lane Plaza, Sovereign Centre and Manor Park, at least one other was likely to be established in Kingston, and another in Savanna-la-Mar, Westmoreland's capital.
"We're doing a feasibility study on where to put these branches," said Wehby.
The chain already comprises about a dozen stores across Jamaica.
Hardware and Lumber, though profitable, has had two years of depressed earnings - dropping from a peak $156 million in 2004 to $20 million in 2005 and $37.7 million in 2006 — but GraceKennedy which controls about 58 per cent of the listed company, has never given any thought to selling its stake, the GK Investments CEO said.
GraceKennedy controls 47 million of H&L's 80.8 million issued shares, with the next big shareholder being Pan Caribbean Financial Services whose 16.8 million shares gives it just under 21 per cent ownership.
Wehby who is also deputy chief executive officer of the GraceKennedy group, said the conglomerate was bullish about H&L's prospects.
Revenues were up 23 per cent over the first six months to June, he said, and hurricane sales are already signalling that the turnover for August will also increase.
For the company's half year results ending June 30, H&L sold $3 billion of goods from which it carved profits of $31 million.
In the comparative six-month period for 2006, the chain made sales of $1.26 million, but recorded a loss of $6.9 million.
Going forward: "Our first priority is to ensure smooth implementation of the information technology system," Wehby told the Financial Gleaner.
"That will enhance efficiency and improve customer service."
The new technology is meant to synergise inventory and customer demand, by tracking the rate at which stock moves off Rapid TrueValue's shelves to ensure that products are available and in the right quantities.
"We're trying to ensure that the variety and range of products we carry will improve," Wehby said.
GraceKennedy is investing US$1.4 million in the management system procured through an IBM agent in New York. Full implementation, said Wehby, is on track for November.
Already, as part of the expansion plans, the Lane store has been outfitted with a 'home centre', while the main warehouse at Spanish Town Road, Kingston is to be refurbished.