FinishMaster expands its footprint through acquisitions and organic growth.
By Chris Kelsch
Anyone who has experienced a car accident knows it is an emotionally stressful ordeal. Dealing with insurance and finding a collision repair center is challenging enough, to say nothing of possible physical injuries.
When faced with such a situation, consumers tend to go to a local collision repair center they have used in the past or that came recommended from a friend. Collision repair centers work hard to build a strong presence in their community as someone you can hand your car over to without a worry. Steve Arndt, president and COO of FinishMaster, notes that is exactly the same relationship his company aims to create with the market it serves. “We consider ourselves a key supplier and partner to the local collision shop,” Arndt explains. “Vehicle repairs have to be done to pre-accident specifications and it is our job to support collision shops with products and services to get the car back on the road as quickly as possible.”
Since its founding in 1968, FinishMaster has grown to be one the largest distributors of automotive and industrial paint products and services in the automotive aftermarket. It has 215 branches across 33 states and is supported by more than 1,900 team members focused on supporting customers and growing the business. “We have been called the biggest and that’s OK,” Arndt says. “Size gives us the ability to provide our customers access to resources and technology to help drive process improvement and profitability in their shop.”
The automotive aftermarket has seen a dramatic increase in consolidation in recent years, both in collision repair shops and distribution. FinishMaster has grown significantly by acquiring strategically located distributors across the US. In 2016, FinishMaster made seven acquisitions, adding 44 branches and 370 team members. In addition, the first FinishMaster branch opened in Ontario in September 2016. FinishMaster Canada has since expanded to seven locations.
That trend has continued in 2017. FinishMaster has completed four acquisitions expanding its footprint in California, New Jersey, and Massachusetts, and adding its first two branches in Alaska. The company also opened a greenfield location in Nashville, marking its fifth location in Tennessee and supporting its strategic plan to expand in major metropolitan areas.
FinishMaster’s parent company Uni-Select has demonstrated its commitment to drive growth through continual support of acquisitions and by remaining focused on the exceptional customer service FinishMaster delivers to its customer base.
This commitment to exceptional service and expanded branch footprint has fueled FinishMaster’s impressive organic growth. FinishMaster has a growing partnership with some of the largest collision repairers in their industry known as multiple shop operators (MSOs). There has been significant consolidation in the MSO segment over the last several years and FinishMaster’s national footprint and strong service model puts them in an advantageous position to support the growth.
Consolidation across collision repair centers results in fewer, but larger customers who are in expansion mode. “As customers get bigger, their demands are greater,” Arndt explains. “We have made changes to our structure and support teams based on how we need to service growing customers.” For Arndt, the decision to grow and expand in response to a changing market has been a relatively easy one. “We want to be a key factor in our customer’s success and to be that we have to build our model to support the largest and fastest-growing segment in our business, MSOs, while still providing equally exceptional support to the locally owned collision repair shops,” he says.
To further fuel its expansion, FinishMaster relies on four distribution centers in California, Georgia, Michigan and New Jersey. The New Jersey distribution center was completed in late 2016. The company is actively looking for a fifth distribution center in the Southwest to better serve its growing branch and customer footprint and will continue to search for additional locations as their customers and branches increase demand.
Providing exceptional customer service is part of FinishMaster’s promise to its customers. That promise is supported by Uni-Select who shares the same values and commitment to set the industry standard in customers partnership. Despite its size, the company has remained agile and takes pride in its ability to be flexible to meet the needs of each customer. Recognizing a one-size-fits-all approach does not work, FinishMaster offers a variety of technical services such as inventory management, process analysis, and reporting tools to help collision centers save money by reducing inventory and increasing throughput of vehicles.
MSOs are a big part of FinishMaster’s business, but the company is still focused on traditional collision repair shops with only one or two locations. It has also increased its focus in 2017 on growing business in the industrial sector and has built a national team to help drive that new business growth.
On a smaller scale, the company also services walk-in and do-it-yourself customers who visit FinishMaster’s branches. For Arndt, it is important each branch has a unique, local neighborhood feel to it. “We have many customers who aren’t an MSO and they don’t know we are a national company,” Arndt notes. “That’s because the branches are built to have a local feel.”
Given its roots, it’s easy to see why FinishMaster prefers a local neighborhood feel. The company was started by Jim White in a single location in Grand Rapids, Mich. “Jim wanted to create an experience where it was about servicing the collision center and helping them improve their business,” Arndt notes. “He really wanted to provide careers for people and create a family atmosphere.” The team is the foundation of the business.
That attitude carries over after FinishMaster acquires a competitive distributor. Team members and owners are invited to stay on with FinishMaster. “We want them to stay on and be a part of the business,” Arndt explains. “We value their input on how to grow and meet the challenges of running a successful business.”
The results of FinishMaster’s efforts are visible – literally, when one considers that a car’s paint finish is easily the largest contributor to its overall appearance. “We sell the products that are noticed the most, by our customers and by our customers’ customers,” Arndt says. “It’s our job to make getting the car painted and delivered back to the customer as efficient as possible by delivering the best products and support in our industry.”