Auto Service World
Feature   April 2, 2009   by Auto Service World

For A New Era

A New Look and a New Commitment

In a difficult economy, it is easy to see the Lordco Auto Parts operation as a prime example of what can be accomplished when focus and clear direction drive a company’s initiatives.

It is also natural to give all the credit for that success to one man.

After all, for most of the last 35 years, owner Ed Coates was the man behind a succession of creative and successful expansions that have made the 90-store Lordco chain the envy of much of the automotive aftermarket.

While most large operations started as modest and sometimes quaint operations, Lordco’s beginnings under Ed Coates and co-founder Roy Lord were particularly modest, and not at all quaint. In fact, the 900-square foot headquarters in Maple Ridge was, as Ed Coates has said, “a hole.” But it led to Lordco becoming the largest privately held independent auto parts distributor in Canada, with three warehouses in Burnaby–NFL at 160,000 sq. ft., the Annex facility at 33,000, and the High Performance warehouse at 33,000 sq. ft.–that, together with Parksville’s 62,000 square feet on Vancouver Island, carry a total inventory of $135 million in parts, equip- ment, bodyshop paint and supplies, high performance, and engine parts.

And Coates has been an integral part of it every step of the way.

Still, while he continues to be the sole shareholder and undisputed top man at the company since purchasing Lord’s stake in the business back in 1981, Coates is quick to give credit for the company’s success to a large team of committed Lordco staffers, many of whom have been with the company almost since the beginning.

“Everything starts at the top and works its way down. It is that way and will always be that way. I take great pride in what I do for this company. We have grown this to what it is, and I have had a lot of great people along the way to help, and I respect that. It’s not a one-man show here. It’s a team effort. You join our company as a career, not as a job.

“It’s not for everybody,” he acknowledges, “but the people who buy into what we do here become very loyal and very enthusiastic.

“The vast majority of our people like to come to work every day.”

And he is no different.

From conducting customer presentations to visiting each and every branch–even picking up an order desk phone at a branch if need be–Ed Coates continues to be involved every day.

In fact, with a considerable wealth built up over the years (he is the sole owner, and the company’s balance sheet is essentially debt-free), he is often asked why he hasn’t taken on a less active role in the business. He won’t hear of it.

“Me personally, I get to do everything I want. I travel about 150 days a year, most of it on Lordco business.

“I’ve got all the money I’ll ever need. I’m in it for the glory, not the money,” he says with a hearty laugh. In fact, he adds, he’s in it for the laughter too. Coates brims with enthusiasm for all aspects of the business.

And, at 60, he shows no signs of considering a change in attitude. His reasoning is simple.

“If I couldn’t come to work I don’t know what the f*** I’d do. And you can print that if you want.”

That kind of positive attitude permeates the organization, but it’s not just the infectiousness of Coates’ personal view that makes it so. There are some very real career path programs and incentives to provide rewards to staff.

“We have always used the career-path method here. Entry level would be a driver or a cashier, and from there they could move into the inside sales associate [level], up through store management, the sales side, and so on.

“We actually have some pretty bizarre occupations here. We have our own IT, our own software and maintenance. And we have had people go from the mainstream parts operations into that.”

The list of employees who have shifted gears in the organization to fulfill the career path they want is long, he says, made possible by the fact that everything, from marketing to maintenance, from store construction to machining, travel to trade shows, is handled in-house.

“We don’t use any outside sources, and this opens up lots of opportunities for our staff.

“Even though you might come in as a truck driver, you have the opportunity to do anything.”

A long list of incentives goes hand in hand with empowering staff to make decisions, too, which is a big part of the Lordco philosophy.

Some of those incentives are big–cruises and trips, monthly bonuses paid all the way down to assistant store managers–and some are smaller, like the practice of buying lunch for staff who work weekends (Lordco stores are open full retail hours, seven days a week).

It all engenders pride in a job well done. A prime example of that is the attitude of Kit Gill, manager of the new flagship Clearbrook store in Abbotsford. At 28,000 square feet, it is the largest store to date in the Lordco network, and possibly in the country.

“It’s the new state of the art. They have tried everything new in there. There are 11,500 square feet of retail space. There is a little bit of everything out here.” Actually a lot of everything, he corrects himself: it holds some $3 million in inventory, allowing it to serve as a hub store for other Lordco operations.

“It’s pretty cool,” says Gill. “Every phone call we get, it’s ‘yes, we have that.'”

For example, the wiper blade aisle is 28 feet long. “There are wiper blades there that I have never seen before. And that’s the idea. We want people to come in and be able to find what they are looking for.

“We have had the majority of our larger customers through–and a lot of the others too. The amount of stock is the big part of what we offer here. You look at the Walker exhaust aisle, it’s 90 feet long, double sided. It’s just enormous. Now they know that when they need something we will have it. It is a real confidence builder.

“We have a lot of good guys on the counter and the stock to back it up. It’s definitely a winning combination.”

What he doesn’t say, but Coates is quick to mention, is that Gill and other store management staff worked tirelessly to make that new location happen, from working on plans to hauling gear–whatever it took.

The additional store is having the desired effect:, sales in Abbotsford are up 35%.

“And we’re just beginning.”

Coates says that one of the reasons the company has been so successful over the years is the degree of penetration it looks for in a market. When they opened the new store in Abbotsford, they didn’t close the old one, only a few kilometres away.

“Lordco has always been noted for having good coverage in the market. In the Lower Mainland our stores are probably only 5 km to 6 km apart.”

The other key to success has been the firm’s emphasis on retail, an approach that provides a high profile and helps pay for services to the trade customers who generate nearly half of Lordco’s overall business.

“Our percentage of retail is much higher than pretty much anybody else. In Canada we are the second-largest auto parts retailer in the country [after Canadian Tire].”

And, he says, opening large stores is pretty well standard operating procedure for the company.

“Lordco for some time has been opening up larger stores. We started this maybe 20 years ago. The first ‘super store’ was, probably Coquitlam. When most auto parts stores were 5,000 to 6,000 square feet, we opened up one that was 15,000.

“Now we have 10 stores over 25,000 square feet.”

And more to come, of course. Coates muses about moving into B. C. towns where they lack the kind of penetration the company looks for; there are a couple of corners of the province where Lordco doesn’t have a corporate presence, though he quickly adds they do have jobber customers. And then there is Alberta, where they have customers but no stores, and which could be the next area of expansion either through acquisition or green field expansion.

Looking to the future, Coates sees the current time as cha
llenging for everyone in the market.

“We are obviously in an economic downturn in North America, and probably the world.

“So we are learning to work in a little different environment. We have made some changes in our program to deal with that. We are encouraging our people to be more active and to look for more business.”

This activity is helped by some changes the firm recently put into place. With such a large network of stores and staff (now approaching 2,000), it was time for a more formalized structure.

So B. C. was divided up into seven regions with regional managers and reporting structures which, combined with the Lordco philosophy of allowing people to make decisions, has made the company more responsive.

“This has been a real bonus for our company. We are able to make decisions regionally, and that takes a lot of the load away from the head office day to day. Day in and day out the regional managers are working on a lot of issues–with staff and customers, employee matters, constantly looking at where we can add the next Lordco.”

In addition, separate divisions were created for product areas such as tools and equipment, bodyshop paint and supplies, welding supplies, engine parts, and machining operations.

“Realistically, because we are in a changing market, these people needed to focus on their designated divisions, promoting their product and getting more of those in front of the people in the stores and at customers’ shops.

“The way we look at our future is that, yes, we are very large in the auto parts business, but we have to look at other opportunities, because some of our auto parts are declining.”

He sounds like he looks forward to the coming change and challenges.

“Hypothetically, you take every challenge on a personal note. I can solve it my way with the help of my 1,800 closest friends. People talk about the economic conditions and the layoffs and share prices dropping. We’re privately held so we don’t have to worry about share prices.

“I assured our team there will not be any layoffs. At Lordco we have not had a layoff in 35 years”–even through some very tough times– “and we have no intention of laying people off.

“I have reassured my whole team that we won’t be looking at that as an option.”

His reasoning is simple. They’re family. He has four children working in the business, and extended family that reaches to every corner of the company, but you can tell he’s serious about the way he sees the rest of the organization.

“There is a lot of family involved, and when people work for you for 25 years, I guess they become your family.”

And a young family it is. The average age is 30, with some 41% being women (a statistic of which he is particularly proud).

“That means we have a lot of young people to grow with. We have a lot of young, intelligent people, prepared to take on new responsibilities. I have a lot of ideas that I’d like to implement that I think will work. We have to give it a shot.

“That’s what keeps it exciting.”

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