The Juleo Group: Canadian buying group delivers new business model

Home Inside FCNews The Juleo Group: Canadian buying group delivers new business model

HICKSVILLE, N.Y.—Homegrown. Grassroots. Salt of the earth. Whichever the euphemism to describe the Juleo Group—one of Canada’s premiere buying groups—it should impart the honest values of hard work and family. Not to give the impression it is old-fashioned; a unique business model accompanied by exclamations like, “right on,” and “cool,” when describing the company makes this retail franchise an individual entity that is taking floor covering specialty retail in a new direction.

According to an exclusive interview with president Gesner Hudon, original variations of the company sprouted as early as 1970 in Bathurst, New Brunswick, as a small retail operation, then grew slowly into a larger player in the rural region of Eastern maritime Canada. Then 20 years ago, current vice president Jean Claude Bertin came into the mix to create the Juleo Group.

“It is a mix between my grandma Juliet and my grandpa Leo,” Hudon told FCNews. “We grew at a sustainable speed, adding members to get better pricing, manufacturing and distribution. We only took on members who wanted to be financially strong.”

While financial strength seems like an obvious goal for a business owner, it takes on a different meaning for the Juleo Group. “We wanted to pay bills on time and treat our suppliers well,” Hudon explained. “A lot of people in this industry try to play big but they don’t have the strength. They take 60 to 90 days to make payments as a way of business, but we are built on the philosophy of paying bills upfront and being a good player on the market, so suppliers treat us well, too.”

With the membership generating reliable buying power, Hudon and Bertin concentrated their efforts there. “We started to see a lot of loopholes from suppliers’ offerings, and some were not treating us with the loyalty we’d cultivated over the last 20 years,” Hudon said. “We concentrated on keeping up good rapport but developed our own supply chain to control what we offer to clients.”

Five or six years ago, the Juleo Group made the leap to present its own brand of laminates, engineered and solid hardwoods, ceramic tile and various interior décor goods. “We started importing very slowly to avoid angering suppliers. We developed a whole open-minded way of looking at business, sourcing lots of products because our partners were seeing a lot of success.

“The recipe for what we’re doing is adaptable to many different operations,” Hudon continued. “For suppliers to Juleo, they have competition but it’s friendly; we have an open dialogue about the future with our partners. They give us products to sell in a double wholesale situation so we’re increasing our volume with those in distribution but we’re also bringing our brands and establishing ourselves. We’re really breaking the mold of what distribution and other channels are doing in the floor covering industry. It’s a new dynamic of retail, wholesale and buying groups.”

Changing the distribution model

He credits Juleo Group’s ability to operate on low margins to a critical base with affiliated members and manageable volume. “We don’t need the huge overhead that traditional distributors need—members bring in material and we add to that regularly,” Hudon said. “Those who buy from us can benefit from what the group is doing already.”

Although the group has focused on Juleo-branded goods in the recent past, it still works with major suppliers like Tarkett Canada and Beaulieu Canada. Among its U.S. suppliers are companies like Shaw Industries and Bostik.

There are four major areas that make up business for the Juleo Group: retail, commercial, group needs and distribution. “Our focus is on the development of all four,” Bertin said. “With retail, you’re limited to your population. Commercial is limited by the market but the group and distribution have no limits.”

Since the company operates on low margins, warehouse storage is limited to its main facility in Bathurst. “We’ve grown this facility quite a bit and we’re adding another 20,000 square feet that will be completed in two months for a total of 120,000 square feet,” Bertin said. “Very few of our products have to come through our super center, though. It is almost always sent directly to its destination to be sold.”

The Juleo Group has ultimately created its own way of conducting business. “We’ve walked away from the standard retail/wholesale operation and blended those synergies into something adaptable for retailers, wholesalers, you name it,” Hudon said. “It is made to become a nimble and aggressively focused operation.”

For those new to the concept, it has taken some getting used to. “If someone is driving on the left and someone drives on the right, it takes a while to get used to. Some suppliers totally get what we’re doing because they’re model is changing also.

“A lot of our distributors see opportunities because we are building a huge network,” he continued. “There is potential for success because pricing is so aggressive. Instead of us going out and hiring reps, sourcing and warehousing our products, we ask, ‘Maybe there is something we can do together?’ It makes for a new type of busisness that even distributors see as positive.”

Member-centric focus

This progress is developing membership along the Martime provinces and Quebec. In two years, Hudon hopes to double the current membership. “Our thought process is focused on whatever we can do for the group. For example, someone in the U.S. who doesn’t have our suppliers could benefit from buying from our wholesale division,” Hudon said. “The model could also extend to non-members.”

Gilles Allain of Carpet Ranch Miramchi in Beresford, New Brunswick, has been a member of the Juleo Group since he started in the business in 1988. “We have excellent buying power, deals, support—exactly what I’m looking for,” he told FCNews. “They give me the freedom to run my own business but offer the support I want when I need it.”

Over the next two years, Hudon hopes to double the number of members along the eastern Maritime provinces and expects that to be directly proportional to economic growth. “In the past three years, some of our stores have added on to double their operation size,” Hudon said of the economic conditions in eastern Canada.

“We’ve not only stayed at cruising altitude; we’ve gone up a bit,” he added. “While the U.S. market seems tough now, it looks temporary. We believe it will be strong again and want to participate by developing our partnership in the U.S.”

-Emily Hooper

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