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Coast Overview

Business Profile

Coast is a leading independent supplier of major household appliances and accessories. Headquartered in Vancouver, British Columbia, we sell to developers and builders of multi-family and single-family housing, designers and retail customers.

Sales to developers and builders account for approximately 60% of Coast’s revenues with sales to retail customers making up the balance. We operate stores across the four western provinces and one store in the Greater Toronto Area of Ontario, as well as a network of warehouse distribution centres strategically situated to serve these locations.

The Industry

Canada’s major household appliances industry serves a large and growing market, with annual sales of approximately $3.5 billion.

Well-established industry trends that we believe will continue to drive strong consumer spending on major appliances include:

Track Record

Coast has a track record of strong financial performance extending back to the inception of the business in 1978. Despite economic fluctuations, we have historically maintained a steady and stable growth trajectory. While the financial performance of Coast and our industry as a whole have been impacted by increasingly challenging business conditions over the past several years, Coast has continued to deliver solid results and strong sales growth.

Competitive Advantages

Coast enjoys a number of sustainable competitive advantages that we believe will enable us to continue to grow sales and cash flows over the long-term as economic conditions improve.

Focused Product Category

Coast’s singular focus on major household appliances means we can offer customers the convenience of one-stop shopping for all of their major appliances needs. We are able to optimize sales revenue through cross-selling and cross-promotion between major household appliance categories.

Wide Selection of Recognized Brands

Coast sells more than 35 brands of major household appliances. Most competing retailers offer a much narrower selection.

Superior Value Offering for Developers and Builders, and their Customers

At Coast, we have tailored our wholesale operations to meet the needs of the residential construction and renovation industry. Unlike other major appliance wholesalers, Coast provides developers, builders and designers with just-in-time delivery and installation. Our inventory management system is specifically designed to accommodate the typically staggered and irregular construction schedules of residential developers and builders.

Due to our size and strong relationships with our suppliers, Coast is also able to provide long-term contractual purchase commitments.

Product Presentation in Showrooms

Each of our 16 stores feature showrooms with working designer kitchens that showcase a full complement of brand names and products. At Coast locations, customers can “test drive” and easily compare a wide range of models at various price points.

Experienced, Knowledgeable Sales Force

Coast has dedicated sales teams focused on growing our business in both the wholesale and retail markets.

In selling to developers, builders and designers, we concentrate on establishing close working relationships. Our sales associates function as part of the development team and often visit customers at their office or job-site to help determine their exact requirements. We then schedule delivery and installation in step with planned completion dates.

When selling to the retail market, we focus on the customer experience. We display our product offering in state-of-the-art showrooms with working designer kitchens, where we educate our customers about the differences between appliance models, and help them choose the right solution for their budget, size of home and lifestyle.

Strong Supplier Relationships

With 16 stores, Coast enjoys substantial purchasing power. To maximize our purchasing leverage, we have streamlined our key supplier base to focus on multi-brand manufacturers.

We also benefit from strong, collaborative supplier relationships, forged over the course of many years of continuous business. Coast regularly undertakes joint initiatives with suppliers, such as combined promotions and product launches, co-development of products and exclusive product offerings.

Experienced Management Team

Coast’s senior management team is set apart by the depth and diversity of its collective knowledge and experience, and the long-standing commitment of individual members.

Growth Strategy

Coast’s growth strategy is threefold:

  1. Build on our strong market position in Western Canada and explore growth opportunities in Western Canada and in Ontario as they arise
  2. Increase sales from our existing stores
  3. Continue to enhance our profitability

1. Build on strong market position in Western Canada and explore opportunities as they arise

Founded in 1978, Coast originally operated exclusively as a wholesale supplier to developers and builders in western Canada, later broadening our focus to include the retail market, and establishing stores in all major western Canadian markets. In January 2009, we expanded geographically into Ontario.

To strengthen our leading market position in Western Canada, we have relocated some of our existing stores to higher-traffic areas, a proven sales enhancement strategy. Over the long term, Coast will concentrate on increasing our presence in Ontario, and specifically the GTA, which represents Canada’s largest market. In particular, we believe that our full-service approach to meeting the needs of developers and builders will allow us to grow our business in the GTA’s contract sector.

2. Increase sales from existing stores

Coast is boosting sales performance by continuing to enhance the appeal of our showrooms as a destination point for retail shoppers. We are also capitalizing on our growing consumer profile by building on the strength of our sales force, and by tailoring our product offerings to meet regional preferences and demands.

3. Continue to enhance profitability

To enhance profitability, we have increased our focus on higher-margin and better-selling products. To support better control of margins, increase inventory turns and facilitate price-based marketing initiatives, we are currently upgrading our inventory and pricing management IT systems. Finally, to improve operating efficiency and reduce costs, we are continuing to streamline non-selling functions.