New Investor Sees Big Opportunity for Home Service Store

September 18, 2012
Companies

Roark Capital Group, an Atlanta-based private equity firm, has acquired The Home Service Store, a Georgia company that coordinates lead generation, sales and installation for do-it-for-me home improvement projects between retailers, dealers and manufacturers. Its replacement window activities currently include programs with BJ's Home Improvement and Costco.com.

 
 The website for BJ's Home Improvement program, managed by the Home Store Service

Robert Sheft, founder of RMA Home Services, which sold and installed replacement windows and siding on a nationwide basis for The Home Depot, is leading the transaction for the private equity firm and serves as HSS executive chairman. RMA was sold to Home Depot in 2003.

With The Home Service Store, Sheft hopes to take RMA's model of success and "take it to the next level," he says. RMA's strength were the tools it developed to support dealers and contractors and a streamlined process. Talking about HSS, he adds, "we have a tremendous platform to build on here now."

HSS’s management team, led by CEO Mark Ilderton, remains with the business. “I’m very pleased to have Roark and Robert as our partners," Idleton states. "Their operational approach and the sector experience they bring make them a terrific partner for HSS, its management team, our retailer partners and our network of installers and dealers going forward.”

Headquartered in Kennesaw, Ga., HSS currently maintains a network of more than 700 independent dealers and installers, which the company has has vetted for service quality, insurance and reliability, it reports. In 2011, the company facilitated more than 39,000 installation projects.

"For the retailer, the ability to deliver a quality product consistently at a good value makes this an extremely attractive model," Sheft states, and the company is looking at other channels as well. "Windows is clearly a significant category for us," he notes. (Its business currently includes patio doors, with other types of doors under consideration as well.)

Finding dealers and contractors to work with has never been a problem for HSS, according to Sheft. There are procedures that need to be followed and some companies and individuals prefer to do things their own way, but the goal is to keep processes simple, making it more attractive business proposition.  "We want to make simple as possible for them to spec out and price a window. We did it pretty well at the Home Depot," Sheft states. "We've had a lot of technical advances since then that should improve the process significantly."  

There's no timeline for window programs at HSS, but there are numerous strategies and ideas being reviewed and market tests for new programs could begin by first quarter of next year. "Much like we did at Home Depot, the hope is to create a value proposition that benefits everyone involved, from the manufacturer to the retailer to the contractor all the way to the customer," Sheft concludes.