By Bernie Cahiles-Magkilat
HMR Philippines Inc. is pursuing its pioneering reverse logistics business, a retailing model that enables companies and distributors to tap a third party to sell their excess inventories. Some items are brand new while others are used but have been restored into good, working condition at affordable prices.
This model has been so successful that it is now the destination for startup businesses whether it be for their kitchen wares, office wares, furnishings, farm equipment, cars, properties, and many other unique items. You name it, they have it. The only category not included in our line is fresh food products.
SHARLENE CARMAN-POWELL heads the family business, which has grown from its original precious recycling venture into a formidable synergistic conglomerate.
Under Sharlene’s leadership, HMR is now ready to encroach into new territories, pursue innovative re-marketing approaches to further serve practical buyers in need of quality products at affordable prices.
To the broader public, HMR is known as the one-stop discount shop on Pioneer St. in Mandaluyong.
But this retail store actually traces its humble roots from its original precious metals recycling business established in 1986. It became a computer shop and now has diversified into a successful conglomerate of highly synergetic businesses which specialize in the core competency of the reverse logistics of capital assets.
As a reverse logistics company, HMR procures or accepts all categories of excess inventories of companies or from its distributors to be sold in its facility. These products are either sold in retail, wholesale or during auctions.
“Due to the growth of the Asian market and the huge increases in redundant inventory, HMR Reverse Logistics is overflowing with opportunities for interested buyers. All this is resulting in an extraordinary burst of revenues for the company. We have actually been approached by overseas businesses that would like to partner and establish a similar model to HMR which can service the immediate supply chain issues around excess merchandise and equipment in neighboring countries,” she adds.
In a nutshell, HMR buys and sells with a difference. All industries eventually accumulate excess assets and from there grows the need for reverse supply chain logistics services to dispose of redundancies at optimal prices to maintain value on their balance sheets.
But HMR is more than that. It has become a conglomerate of its own with several companies under it.
“The companies within our conglomerate comprise of auctions, wholesale, logistics, refurbishment, telco fabrication, recycling, E-commerce, design & fit out and more,” says Sharlene.
HMR is growing significantly in terms of outlets as well. Today, there are 28 company-owned stores all over the country. There are 15 HMR Trading Haus stores, 7 SOS Stores (3 franchised & 4 company owned), 3 HMR Express Stores, 1 Schaffen Tools store, 1 Loro Sports Store and 1 HMR Outlet Store.
“Our 5-year business plan is really exciting,” says Sharlene. With a robust business strategy, Sharlene said they plan to establish another 50 stores nationwide by 2022.
To achieve this target, Sharlene said they are still looking to add new destination stores around major cities but are planning on focusing more on franchising as a great way to extend HMR’s market reach to provincial areas as well as give opportunity to local entrepreneurs within that region to market secondary products. Opening a grand Vehicle Auction facility by 2019, and constructing the largest Reverse Logistics Center in Asia by 2021 would be the expansion plans for the Group.
Destination stores require capital expenditures up to P300 million to establish. “The majority of this cost is attributed to working capital, but the ROI on a successful location is very attractive,” adds Sharlene.
“We have a franchise program called SOS which is a smaller version of HMR, and we are encouraging more business partners to open SOS stores nationwide,” adds Sharlene. “At present, there are seven SOS stores in Zamboanga, Tacloban, Dasmarinas Cavite, Festival Mall Alabang, Sucat Parañaque, Ever Commonwealth Mall Quezon City and Cagayan Valley. Our goal is to reach 100 franchise stores by 2022.”
“With the expansion of our reverse logistics operation we are looking to open more franchises in the provincial areas that have local knowledge of their own community and have the location to put a retail store. So, we impart to them unique product ranges and coach them to be successful in their local markets,” adds Sharlene.
HMR has multiple sales channels for all categories of assets. It has an auction company called HMR Auction Services Inc. with three branches which sell second-hand construction machinery, agriculture equipment and used cars, trucks and bikes. They also sell these through live public auction.
Also, they have an online auction platform (www.hmrbid.com) which they utilize to handle liquidations for manufacturing plants, industrial assets, offices, restaurants and consumer goods.
Its consumer goods include apparel, home appliances, home furnishings, among others. They also have farm equipment including grass cutters and many others, and even power generator sets, either brand new or secondhand items.
These products are sourced mostly locally, but some are imported. “We strike a balance between importing goods from overseas markets, and assisting with asset disposal requirements locally. Obviously, there are additional costs associated with import, but that’s part of what makes a shopping experience at HMR special, that you never know what you’ll find. It could be the only item of its kind in the Philippines,” says Sharlene.
Sharlene personally joins their purchasing team to meet suppliers abroad and locally.
HMR items are sold a lot cheaper than what can be found in the traditional retail stores.
This is because their model seeks to assist sellers by finding a secondary sales channel for their obsolete items. “Therefore, the major value proposition which HMR offers is our reverse logistics expertise and infrastructure,” says Sharlene, who adds that out of hundreds of offers a day, HMR only purchases less than 5 percent for the purpose of having attractive prices, an ensured level of quality, and all this ultimately translates into margins.
“We have established systems, analytics, and committees from pricing to sales to ensure that we meet our objectives of target margins with fast turn over.”
“We are in the business of moving every category fast. There isn’t one category of items that I can select which we can’t move in 60 days,” she adds.
Stocks that cannot be sold through the primary re-sale channels are offered through its auction services on an as-is basis.
On the procurement side, HMR offers a range of disposal services to manufacturers, distributors, retailers, BPOs, restaurants; virtually any company that is liquidating assets, whether that be to upgrade, relocate or close operations.
For the industrial line, HMR targets businesses with end of lease equipment, completed construction projects, hotels renovating, and manufacturing plants that are closing.
“With the BPO and POGO boom, Office furniture attracts the startup businesses looking for a bargain on quality office tables, chairs, pedestals, filing cabinets, swivel chairs, board room tables. For the Household furniture, appliances, apparel and electronics we attract the end user,” says Sharlene, a mother of two boys.
To ensure quality and standards of its products, HMR employs over 300 skilled workers of all trades to ensure that items placed in any of its stores are in good working condition before they are sold. HMR employs seasoned mechanics, electricians, furniture makers, steel fabricators and even upholsterers for sofas and apparel.
“We also offer warranties on products sold,” she adds. “In our HMR Trading Haus stores we offer 12 months’ warranty on brand new generators and air-conditioning units” where we offer in house and well-known brands.
But construction equipment is sold through HMR Auctions, on an as-is where is basis which has assisted small to medium contractors with the “Build Build Build” demand.
“The greatest satisfaction and joy really come from a few things: seeing how our team progress within HMR as well as receiving feedback on how satisfied our customers are, and most importantly seeing that our deals are good both for the customers and for HMR,” she adds.
The entire HMR group has grown over the years and they now employ over 3,000 employees.
As the CEO, Sharlene adopts a flexible management style depending on the situation and the circumstance.
For the most part, she encourages a collaborative working environment by allowing her team to share their ideas in the process, and try to reach a general consensus within the group.
“I find team input a vital component for seeking innovation and improvement, as we all bring something different to the table, whether it be a perspective, an experience or a solution. That being said, ultimately, it’s my final decision and accountability,” says Sharlene.
This family-owned business, which her Australian father started, has many challenges though.
“My role requires me to collaborate with my team and develop strategies to drive continuous innovation; while also expanding our sales reach and channels. In turn, the joy is experienced in hitting sales and profitability targets; and seeing growth in individuals within the team. All these feed into our key corporate objective of customer satisfaction. Seeing that in our outlets, really makes the effort and sacrifices worthwhile,” she adds.
Throughout her life, Sharlene said she has been blessed with many mentors and figures whom she respects in business.
“But the two most significant are my parents who both started from humble beginnings and through hard work, dedication and sacrifice have built HMR into what it is today,” says Sharlene.
To recharge from the demands of her job, Sharlene said it is important to be physically, mentally and spiritually refreshed, on a weekly basis. This certainly helps effectivity at work, but more importantly aids quality of life.
“For this, I enjoy boxing, church and spending quality time with my kids. I have two young boys, who are growing up very quickly,” says the soft-spoken boss.
“I have learned many lessons over the years and take what I can from each lesson and work with it,” says Sharlene.
“One which is key to my career is to be enthusiastic and passionate about what I do because only then will you move beyond the mere figures and profitability and grow something of lasting value,” she says adding. “When you ingrain a part of yourself into everything you do, it encourages and inspires your team, and that shows to the customer in the end.”
She has also learned to set KPI’s for each business segment as a whole. Aside from that, she has to recognize that it takes others longer to be successful in this unique type of setup.
“Developing people within my team is also a key factor to achieving targets, so I make sure I have the right people in the right jobs,” says Sharlene.
With that, she has developed into a resilient manager. “When something does not go as planned, I’ve learned to pray for God’s strength, guidance and to be agile enough to convert negatives into positives by driving forward.”
Both her parents are still very active in the business with the father in operations and her mom on the finance side.
Growing up, Sharlene would have wanted to establish her own career path. In fact, when in college, she had aspirations to become a broadcast journalist.
However, while she was working in Australia, her brother David visited and told her all about his experiences of working within HMR, and the growth which was occurring. Her two brothers David and Warren are still onboard. The brothers are focused on finance and on the online auction business while Sharlene is more on the commercial growth side.
“I could see the passion he experienced in contributing to our parents’ legacy, and it was then that I knew it was something I wanted to be a part of,” shares Sharlene.
Sharlene sees more growth opportunities for HMR Reverse Logistics to help local and international businesses handle their excess assets and inventory. There will be vast expansion through wholesale and franchise channels to sell product to resellers throughout the Philippines and nearby export markets.
She sees their online Auction platform, (www.hmrbid.com), continue to extend its reach, as it expands its product offerings. There will be growth in the Auto Auction business as HMR’s recent success has necessitated the opening of more yards in strategic locations, nationwide.
The fit-out company SDW has expanded a great deal in the last 5 years since its inception. It started as an in-house division for building HMR stores and now it has become the contractor of choice for major BPO and Shared Office Spaces.
“Many will appreciate the challenges associated with operating a family owned business, but when you all have the collective maturity required to push towards a common goal, the achievements are enhanced, as you are sharing accomplishments with the people you love most,” concludes Sharlene.