@BizLondon cover story about Moffatt & Powell
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Moffatt & Powell HQ in London
From Business London magazine, @BizLondon, July, 2014
Nancy Powell-Quinn has a vivid childhood memory of typical Sundays, stretching back three decades. Coming home from church, her father would detour to his lumber and building supply store in Strathroy to catch up on paperwork while it was closed.
“My older sister Jennifer and I were dressed in our Sunday best and we would run around the store, playing in the showers and having a lot of fun,” she recalls. “It was great.”
Today, Nancy, 35, could easily recreate the moment with any of her own children – boys, 6, 4 and nearly 2 – in a setting very much like the one she and her sister enjoyed some 30 years ago.
Her father’s business was Moffatt & Powell, a lumber shop founded in 1956. Since 2010, Nancy and her husband, D’Arcy Quinn, have owned the company her father built with his past and present business partner, Keith Moffatt. Her father continues as an advisor and interested observer, but they have owned it for the last four years, during which time they have modernized and expanded, doing what it takes to compete against behemoth competitors in an industry as sensitive to economic slowdowns as Ontario voters are to Hudakian austerity plans.
It says something about the entrepreneurial spirit of Nancy’s father, Dave, that the first company his daughters could have played in as youngsters was not Moffatt & Powell itself.
It was Powell Building Supplies, a company he acquired and renamed to compete with Moffatt & Powell, a business being run at the time by his father, Melvin, and Keith Moffatt.
“Keith was in business with my father in Strathroy, and I bought a competing business in Strathroy, a millwork shop. I competed with my father for 10 years until he decided he wanted to retire,” Dave Powell, 68, recalls. “We had the same accountant, and he suggested I buy out my father and merge the two companies. And that’s what we did.”
They merged in 1982. Nancy was 3. Her father, Dave, took the place of his father, Melvin, as Keith Moffatt’s business partner. Even today, after both have sold their shares of present-day Moffatt & Powell to the next generation, Dave and Keith remain in business together, running a roof truss business in Watford and London-based Travel by Design – Ruse Travel, which focuses primarily on corporate travel.
When Dave Powell started thinking about stepping back from the day-to-day work of running Moffatt & Powell, he did not involve an accountant in the discussions. Instead, he went to Winnipeg where he believed there were two ideal candidates to learn the business and eventually buy him out.
“My parents were visiting us for Christmas in 2006,” Nancy says. “We said we were thinking of starting a business in Winnipeg, where we were living at the time. He mentioned the possibility of joining the family business.”
“It was a very easy decision,” says husband D’Arcy, 41.“It seemed like a great challenge and an amazing opportunity. We said yes in theory right then, that Christmas.”
What they eventually agreed to do was move to London and work at the company for two years before deciding whether they would take an ownership position.
“We knew we could always go back to Winnipeg and continue our life there,” Nancy says.
Moffatt & Powell is familiar to thousands of contractors, builders and homeowners not just in London but across Southwestern Ontario. Before there was Home Depot, before there was Lowe’s, before there was Rona or the Building Box or Aikenhead’s, there was Moffatt & Powell. Perhaps the closest comparison is Copp’s Buildall, a family company with a longer history but a smaller footprint – four locations concentrated in London.
In the beginning, Moffatt & Powell sold primarily to contractors and builders, supplying lumber and cement. Its product lines expanded over the years, as did the number of locations. Besides London, it operates today in Exeter, Mitchell, Strathroy, Tillsonburg and Watford. It has always served smaller markets, developing relationships with contractors that stretch over generations and are as much about trust and familiarity as about prices and SKUs.
The company employs more than 100 people combined at all locations and is moving in several directions to expand its reach in communities where it already operates and in others where it would like to open new stores. As with all successful family businesses, the transition from one generation of owners to the next has sparked a process of renewal and rethinking.
The smooth transition between generations was one reason Moffatt & Powell was awarded a Family Enterprise of the Year Achievement Award by the Canadian Association of Family Enterprise (CAFE) for 2014.
Many a family business has imploded when the inevitable transition to the next generation was bobbled in some way. Often the next generation shows no interest, so the business continues operating but not under the control of the founding family.
One successful succession secret is that the incoming generation is well served by working somewhere else before coming on board to assume control. A spoiled child who spends his formative years counting the years until he gets his hands on his family business is likely to destroy the business, chasing out loyal workers who understand the operation far better than he does.
When Dave Powell broached the idea of leaving Winnipeg over Christmas dinner in 2006, it was the last thing Nancy and D’Arcy had on their minds. He was an air traffic controller who had studied biology at the University of Waterloo. He’d faced death before ever going to university when he was crunched in a car accident north of Toronto, leaving him with a broken back. He spent three months in hospital and had his back fused.
Then he got his pilot’s license and started an air charter business before becoming an air traffic controller and being posted to Winnipeg. When he got the Winnipeg job, he and Nancy were engaged. They met at Waterloo, where she studied Earth Sciences and business. She was working in a lab there, but moved to Winnipeg with her fiancé and promptly earned a Masters degree in Natural Resources Management at the University of Manitoba.
They married in 2003 and she began a job with the Department of Fisheries and Oceans, travelling to the Arctic with scientists doing research in the far north. The last thing the couple was thinking about was moving to London, Ontario and working in her family business.
Intrigued by her father’s suggestion, however, they had an eventful 2007. It took them about eight months to disentangle themselves from their life in Winnipeg and move to London. While they were making those arrangements, Nancy got pregnant with their first son.
They worked at the business for a year, reporting to a general manager, not her father. “After six to eight months, I think we had a really good sense that it was a good idea,” D’Arcy says. “After a year we decided we would do it.”
Dave and Keith slowly reduced their roles until they sold their shares to the next generation in 2010. Keith has little to do with the company today but continues as a partner with Dave in several other businesses. Dave is the chairman of the business but holds no ownership position and is free to spend his free time producing maple syrup from trees on the farm where he and wife Linda live.
Since they assumed control, Nancy and D’Arcy have pushed the company into the high-tech world, modernizing its entire inventory and order system. And they struck a deal with Rona, the Canadian-owned big box home improvement centre with which it still competes on some level.
Determined to broaden its product mix to include products DIY homeowners are looking for, the couple has overhauled the look of the company’s stores and filled them with many more home improvement products. But getting those items at a competitive price is much more difficult than sourcing lumber and other contractor supplies.
“It was getting tougher and tougher, and we were spending a lot of time sourcing products,” Nancy says. So they struck a deal with Rona, a deal Rona is making with numerous independent lumber yards and home centres across the country. Moffatt & Powell can stock any Rona item of its choosing and can take full advantage of Rona’s huge buying volume to get the lowest possible prices.
In return, they put the Rona name on their stores, becoming a Rona affiliate store. “Rona has 700 stores across the country and most are affiliate stores,” D’Arcy says.
You won’t find all the home décor products available at a giant Rona store at any Moffatt & Powell store. But you will find more retail products than ever before. More importantly, customers outside London, where Moffatt & Powell is one of the only games in town, can order anything Rona sells and have it delivered to their local Moffatt & Powell store within a few days.
The business still sells about 70 per cent to contractors and builders, but the 30 per cent retail sales is the highest proportion it’s ever been, and it’s growing fast.
The next step is to offer homeowners not just the materials to do projects but the option to have Moffatt & Powell do the project for them.
“We’ve been delivering shingles to the tops of roofs for years now,” D’Arcy says. “The next step is for us to install the shingles on the roofs. The same goes for drywall, for example. We’re going to offer more and more services aimed at homeowners.”
Expansion is also on the agenda. They have at least two communities where they would like to open stores as soon as possible. That doesn’t necessarily mean building a new store, however, especially since it can be difficult to secure prime real estate in competition with Home Depot and Lowes.
“There are lots of family-owned lumber yards with no clear succession plans,” D’Arcy says. Without the option of going to Winnipeg for Christmas and pitching succession to the next generation, some of those lumber yard owners may be looking to sell. Buying smaller competitors is nothing new for Moffatt & Powell. Dave and Keith did the same thing to grow across Southwestern Ontario.
Now Nancy and D’Arcy are plotting a similar strategy, leveraging their strength as a family-owned business to grow into new markets.
It’s far too early to know whether any of their kids will be interested in taking over one day. If they show any interest, however, you can be sure they will go work somewhere else for a few years. They probably wouldn’t compete directly against mom and dad – although you can’t rule it out. That would make their grandpa mighty proud.