It's a New World
TCGI and its holding change the auto glass equation
Allan Skidmore is a people person. He will be quick to tell you that he hires good people and then lets them make their contributions to the company with his solid support and backing. His people-personality is a large part of the big changes at the family-owned Skidmore company TCG International.
The first change was the sale of the company’s Canadian auto glass operations to Belron (see AGRR, November/December 2005, page 14). The Skidmore family, which is celebrating 60 years in the auto glass industry this year, has known the Lubner family, founders of Belron, for a long time. Skidmore, as co-executive chairperson and CEO of the Burnaby, B.C.-based company, was satisfied that Belron would do the right thing for the TCGI employees involved in the sale.
The second change is the establishment of two key positions and the people to fill them. Skidmore calls them his lieutenants, to oversee the day-to-day operation of the company. Garry Skidmore, executive vice president, Allan’s son and the next generation to be involved in the business, oversees the infrastructure of the company including information technology, administration, accounting and Speedy Glass, the company’s U.S. retail operations. Keith Beveridge, senior vice president of Shat R Proof Corp., oversees the company’s brands (SRP, Novus Windshield Repair, Airbag Service and TCGI’s international operations in Europe and Australia).
During a recent visit to Shat R Proof Corp.’s new headquarters in Savage, Minn., AGRR spoke with Skidmore and Beveridge about these changes and their view of the auto glass industry and the future of TCGI.
Sale to Belron Canada
Skidmore explained the sale of the Canadian auto glass operations as a logical conclusion since Canada only has 30 million people and two very well known brands (Speedy and Standard). “It was like having two Safelites in Canada,” says Skidmore. “They expanded from the east to west and we were coming from west to east and in every major city we had a warehouse full of inventory and within a mile they had an inventory. We had a Speedy retail shop and they had a Standard retail shop. The markets were starting to get mature. The first logical thing might have been to combine our warehouses; but at the end of the day, it (the sale) appeared to be a better strategic move for them and for us and you have to make these moves sooner or later.” There is still a working relationship between both companies with Skidmore having a consulting arrangement with Belron Canada and Belron Canada supporting TCGI’s SRP Totalseal adhesive program.
The Big Branding Iron
Asked about success in today’s market, Skidmore and Beveridge agreed that branding is a huge key. “On the retail side, branding is important,” Beveridge stated.
“The Internet is going to play a big part in where people go. You create a brand name and then people come to you.” Beveridge said. Skidmore added the he doesn’t know how long insurers will stay in the AGR business. “The price of glass is getting too low for deductibles, which I see going to $500. As the dollar-value goes up and the price of repair goes up, then the deductible goes up. That’s why it’s called a deductible. It’s a deferred liability,” he said.
In Beveridge’s opinion, there are just as many cash jobs as there are insurance jobs. “It’s just that the insurance jobs are more ‘captured.’ So you have to advertise. You’re going to see a lot of advertising and promotion moving from insurance (scratch pads and other marketing material to agents) to consumers. You’ve got to get the customer to know who you are and to think of you. We don’t think you can just be an auto glass store any longer.” Skidmore added, “We changed the name from Speed Auto Glass to Speedy Glass. In my opinion, you want to be an all-purpose glass store.”
Beveridge agreed that cash is becoming much more significant in the United States “‘No deductible’ is mandated in some states, but overall it could become in some states like some provinces in Canada where cash is 70 percent of the market, fleet and commercial is 20 percent and insurance is 10 percent.”
“I have very good knowledge about what service work was done in Canada, and those companies are owned by Americans or Europeans, and the number of insurance jobs has gone down,” stated Skidmore. “Five or eight years ago in Canada, a store would do 7 to 10 insurance jobs a day. Now it’s two. I can see the same thing happening here. The call centers, the CSRs, the whole industry has to change because the cost of doing business is much higher than it used to be.”
Products Are the Key
Earlier last year, Pilkington North America acquired the U.S. auto glass distribution business of Autostock Distribution, a division of TCGI. Coinciding with that, Pilkington became the distributor for another TCGI company, Shat R Proof Corp., which is the marketing and product development arm of the Skidmore Group, the automotive side of TCGI.
“With the changes in the auto glass distribution model by Pilkington and PPG, you can see a definite focusing of the distribution going from non-manufacturing distributors to manufacturing distributors where before it was very much the reverse,” said Beveridge. “That is why it was always important for TCGI to strive to be more than a glass distributor or installation company. It needed to be a product-driven company.”
One of the ways TCGI has accomplished this over the years is through Shat R Proof, which was created in the late 1990s as a way to bring new product lines to the marketplace. “It allows us to offer something different, a way to distinguish ourselves from everyone else in the AGR marketplace,” added Beveridge.
“When I first started Shat R Proof, my idea was to develop a line of AGR products that we could use in our own stores,” explained Skidmore. “Since all of our automotive businesses at the time centered on buying, selling, or installing auto glass and accessories, it was a way for us to control expenses and control our own destiny. I can’t be effective as a business if I am selling the same products as the guy down the street unless I can differentiate myself from them. That was the driving force behind SRP products.”
“It was our plan from day one to get these products into our retail stores and then, once we felt the products were rock solid, to sell these products to the trade,” added Beveridge. “It took two years of tweaking formulas and packaging changes to get to a point where our corporate installers loved what they had. Once they were happy, we knew we had something different; we had products that were not only designed for the auto glass installer, but products designed by the auto glass installer.”
Beveridge pointed out that the changes in the U.S. and Canadian businesses will only help in growing the brands through expanded distribution. David Osland, director of marketing and product development for Shat R Proof, agrees with Beveridge. “Strategically it has worked out very well for us now that our distribution partners have changed and our base expanded. Product lines such as the SRP Totalseal adhesives, which has been on the market for eight years, is ready to go and we are finding a very receptive audience for our products on a much larger scale than we did just two years ago. We are growing at an exponential rate and one of our biggest challenges right now is adding additional staff and doing our best to keep up.”
The Next Move
Skidmore said that the Speedy name will stay around. “In some ways it’s quite unique but I guess my business will be in other parts of the world other than Canada. It doesn’t mean I won’t be in the flat glass (building products) business in Canada. I’ll be creating other businesses than AGR in Canada—some in the glass business and others that we’re looking at. [TCGI has a large wireless communications business, which is headed by Allan’s brother, Thomas.] We do endeavor to make money. Sooner or later there’s always a day when the timing is such that you divest and move on and reinvest.”
“Everything is a medium- and long-term view,” Beveridge added. “Things change and the Skidmore’s sold out in 1992 and then came back four years later. Not that that’s going to happen again. But when the timing is right you make the move. It’s long-term opportunities.”
Is Skidmore looking to expand in retail in the U.S.? “Only if the opportunity arises,” he stated. I’m just looking to sell glass and accessories day-by-day along with our AGR products. I think I’ve got pretty good brands and people and I’m happy doing what I’m doing.”
Charles Cumpston is editor of AGRR magazine.
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