Mom-and-pop shop thrives in shadow of big-box store

LOS ANGELES (AP) — Virgil's Hardware in Glendale has been around — in one form or another — as long as the city it calls home.

Known for its quirky inventory and helpful staff, the store survived the Great Depression, retailing fads and sweeping demographic change.

But it almost didn't survive Home Depot.

When Tony Maniscalchi and his then-wife, Kaylen, bought Virgil's in 1996, the store was in trouble. A couple of years earlier, Atlanta-based Home Depot Inc. had opened one of its massive orange home improvement centers a few miles away, and the outlook for the hometown competition wasn't good.

"Virgil's took a pretty bad hit when Home Depot came to town," Maniscalchi recalled.

How bad? The store's annual sales — more than $6 million pre-Home Depot — plummeted to $4 million in the year after the big-box retailer opened, Maniscalchi said. It had lost $250,000 the year before he took over.

The new owners faced a predicament familiar to independent hardware dealers, coffee shops, office supply stores and electronics retailers across America. How do you compete against what is known as a category killer — a competitor so big and so rich that resistance seems futile?

Mom-and-pop hardware stores across the country that couldn't answer that question have failed by the thousands as Home Depot, Lowe's Cos. and other big-box competitors expanded.

Since 1990, the number of independent hardware stores in the U.S. has declined 10 percent to about 20,200, according to the North American Retail Hardware Association.

The association doesn't keep regional figures on closings, but the pressure on independent dealers clearly has been growing. Home Depot is now the nation's second-biggest retailer, behind Wal-Mart Stores Inc.

Staying in business in the face of such formidable competition requires tenacity and the ability to learn from one's foes, said Ken Clark, editor of the trade magazine Home Channel News.

"If you're an independent and you want to survive against the likes of Home Depot and Lowe's, you've got to keep your friends close and your enemies closer," he said, quoting Michael Corleone in "The Godfather: Part II."