New Orleans Dealer Rises Above Adversity

Ask dealer Chad Theriot to describe how tough the power equipment business has been. His placid response might suggest that “business” hasn’t been very tough at all.

Theriot’s Outdoor Power Equipment, located in the New Orleans West Bank suburb of Marrero, survived Hurricane Katrina in 2005. Last year it endured the tragic loss of its matriarch, Chad’s mother Evelyn. Needless to say, the dealership’s modest, recession-triggered sales slump in 2009 proved rather trivial.

All things considered (from a business perspective at least), 2009 was actually a very good year for Theriot’s; their 10% decline in sales was well below the industry average. Chad, together with father and co-owner Lawrence, have learned to stay focused on the positive, along with what needs to be done in order to stay on the path their business plan has charted.

Katrina Floods Service Shop

The Theriots have also learned to count their blessings. Let’s back up to August 2005. When Hurricane Katrina pounded the Gulf Coast and flooded 80% of New Orleans, Theriot’s Outdoor Power was spared from the worst of the carnage. The dealership took some wind damage and had to close for a couple of weeks, but no flooding occurred—at least in the way of water.

There was, however, a flood of service work following the storm that became nearly too much for Theriot’s to handle. But they gritted it out, learning how to better streamline shop flow in order to accommodate a massive backlog of repairs.

Smoothing Out Shop Flow

The lessons learned during the aftermath of Katrina are still applied today, and in many cases have even been improved upon.

A total of 10 Stanley Vidmar storage cabinets were purchased two years ago; five sit directly behind the parts counter while five more are in the shop. Chad says the total investment was well over $10,000, but has already been recovered in the way of reduced dead time previously spent retrieving parts in the somewhat distant parts room.

Last year a new warehouse was built behind the main building. Designed to store new, crated equipment and pre-assembled handheld equipment, the 2,000-square-foot warehouse with 17-foot-high walls also houses overflow from the shop—typically large zero-turns and compact tractors. This has allowed for much more efficient use of the dealership’s 7,800-square-foot main building.

“Our new warehouse was pretty much full throughout 2009,” Chad relates. “So it’s obvious how valuable it has been. Our main building is broken down this way: 2,000 square feet for showroom; 2,000 square feet for service; 3,800 square feet for parts and storage.”

(Check out the video of Theriot’s Outdoor Power at GreenIndustryPros.com/video, click on the “Business” channel to find it.)

As Theriot’s continues to stock and sell big amounts of big iron, Chad is setting plans in motion for further expansion. “You never know how long these things will take, but we’re looking to purchase a 3/4-acre lot that’s adjacent to our property,” he says. “I’d like to use that land to eventually put up a 5,000-square-foot building that would serve as our service shop. Then we could double the showroom space in our main building to 4,000 square feet.”

Reeling In New Business

Once that 3/4-acre lot is purchased, Chad figures it will be another two or three years before the new service shop is built. His immediate plan for the property is to fence it in, and use it to display compact tractors, implements and, if everything works out, boats.

Theriot’s Outdoor Power had been servicing Gator-Tail mud motors for years. More recently they began selling sparse amounts of Gator-Tail boats. With fall duck hunting wildly popular in Louisiana, this line of business has helped generate additional revenue for the dealership from August through December.

Now Theriot’s is looking into becoming a dealer for Xpress Boats, which manufactures a much broader line of boats. Chad got connected with the company through a local fishing guide he is friends with. “If it all works out, we would have to hire a specialized technician to work on these outboard motors,” Chad points out. “But when you consider how popular this brand is down here, and how recession-proof this business seems to be, it would work out well for us.”

Meeting Demand

One thing that unfortunately has not worked out so well, thanks to the economy, is Arctic Cat ATV’s. “This has been one product category that apparently is not recession-proof,” Chad relates. “Things have gotten so bad that we have to seriously think about getting out of this business.”

Theriot’s recently got out of the business of selling a certain brand of mower because too many other dealers were being set up by the distributor. But Theriot’s still sells a lot of equipment—a lot. Contrary to how some dealers feel, at least those who’ve decided to narrow their product offerings over the past five years or so, Chad believes a diverse brand offering is what is needed for his dealership to thrive.

“We’ve thought about scaling back our brands, but it just doesn’t seem like the smart thing to do,” Chad tells. “The biggest problem is that there usually is a hole in a given manufacturer’s lineup; maybe they make nice lower-end line trimmers but their commercial models don’t hold up, for example.

“Another problem is that consumers, especially commercial cutters, are very brand loyal in our area,” Chad continues. “If we didn’t carry a certain brand, somebody else would—and we might end up losing customers.”

Theriot’s is very fortunate to have the necessary square footage to store, stock and sell the many brands and products it carries:

- Four handheld lines
- Five mower lines
- One compact tractor line
- One implement line
- Four lawn and garden shortlines
- One ATV line
- One high-end grill line
- Mulch, fertilizer and industrial supplies

The real challenge, Chad conveys, is playing the “stocking game” with suppliers. “It’s difficult when suppliers push hard for you to stock only their brand, or their entire product line as opposed to just a few models. I understand it’s a numbers game, but we’ll decide what and how much to stock.”

That approach has become especially important in the past year. “We went from buying whatever we wanted in 2007-2008 to pinching wherever we could last year,” Chad tells. “A lot of our customers were holding back on buying new equipment, so we had to adjust accordingly.”

This spring, mobs of tire kickers continued to make their way to Theriot’s Outdoor Power Equipment. Chad’s gut feeling was that, this time, they’d be back to make a purchase. “And for those who don’t, we’ll just continue making our money in parts and service,” Chad says. That’s just one of the many blessings Theriot’s can be thankful for.

Theriot’s Outdoor Power Equipment
Marrero, LA
theriotsope.com
Founded: 1984
Owner: Lawrence and Chad Theriot
Employees: 9
Annual Sales: $2 million
Sales Mix: 50% wholegoods, 30% parts, 20% service
Customer Sales Mix: 60% consumer, 40% commercial (1/3 of which is industrial, municipal)
Shop Labor Rate: $70 per hour
Major Lines: Arctic Cat, Billy Goat, Echo, Grasshopper, Gravely, Holland Grills, Mahindra Tractors, Mantis, Maruyama, Little Wonder, Shindaiwa, Snapper, Snapper Pro, Stihl, Toro, Walker, Woods

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