- change ups
Melvin Keeps Things Moving
“Companies don’t like their names attached to us,” NREL’s CEO explained. “They don’t want people to get the wrong idea. Our name is generally connected to failing companies.”
Until recently, NREL’s corporate headquarters was adorned with pictures of some of the more high-profile liquidations of the hundreds the company has performed in its 27 years. Photos of Handy Andy, Ames, Hills, Best and hosts of other fallen chains greeted visitors to the Kentwood office and warehouse.
“One guy walked in and just stopped and looked at them. There were literally thousands of pictures of companies we’ve liquidated, ” Melvin recalled. “He said, ‘Wow, if someone’s your customer, they’re pretty much dead, aren’t they?’ So we thought it was a good idea to take those down.”
NREL has developed a reputation as the nation’s “go-to guy” for the liquidation of store fixtures and equipment. When a chain fails, the company’s assets are soon liquidated, and once the merchandise is emptied, the retailers are forced into a position that they must empty the store to the point where it can be turned back over to the landlord, or pay another month’s rent, which in some cases could be as high as $100,000 for a single location.
“It wasn’t about the value of fixtures, it was about the value of the real estate,” Melvin said. “What it cost to lease a building for a month always exceeded the value of fixtures. It wasn’t a matter of how much we could get for the fixtures, but how fast we could get that building empty.
“In this industry, we’re known as the ‘masters of disasters,’” he said. “When somebody is in real dire straits and they’ve got hundreds of stores to liquidate all over the country and they are throwing up their arms and saying, ‘How are we going to do this?’ — they call us.”
NREL has liquidated as many as 300 stores from 14 different chains in a single month. Although there are only a few dozen permanent staff members, the company payroll has swollen to as many as 600 in high-volume periods.
Melvin isn’t just blowing smoke about his company’s “911” reputation, either. When the Ames Department Store chain was in the midst of liquidating its final 23 stores, the contract was given to another company promising better returns on the liquidation. With seven days left to have the stores empty, the Ames management team came to the conclusion that the other liquidation company had failed, and called NREL.
NREL was able to clear out the stores, dust and all, in only five days.
“We pride ourselves on being able to accomplish any task at hand,” Melvin said. “Everyone in the company has the attitude that we can get anything done.”
In the past year, Melvin and NREL earned some national notoriety when they took that attitude to one task that did prove impossible.
On Sept. 19, 2003, Gilmore, Calif.-based Indian Motorcycles officially closed up shop, leaving 380 people out of work and ending the short-lived reincarnation of the legendary motorcycle manufacturer.
But instead of just liquidation, Melvin had other plans for Indian. For several months Melvin became a local celebrity in the Silicon Valley area as he attempted to take over Indian’s manufacturing operations.
“We had hoped to reopen, to put those people back to work,” he said. “But it never happened. It became apparent that it couldn’t be done.”
For Melvin, the Indian liquidation marked a full circle in his career.
His first job was working as a 15-year-old mechanic at a Honda dealership, and later as a salesman and then sales manager. He sold more than 1,000 bikes in 1973 at the Honda Center in Brighton and was the leading Honda salesman in the United States that year. The title earned him a number of job offers, including one he eventually took as a traveling salesman of after-market parts.
Shortly after Melvin left, the dealership changed hands and the new owner was unable to keep it afloat. Brighton State Bank approached Melvin about the possibility of taking over the dealership.
“I thought about it,” he said. “But I liked my job and my pay, and the industry was in a downturn anyway.”
When no buyer was found, the bank returned to Melvin for help with liquidating the dealership, and he reluctantly agreed. He took two weeks’ vacation to accomplish the job. Eight days later he had sold the entire stock and emptied the building, netting more than five times the expected return.
The downturn hadn’t just affected Honda Center; other dealers were immersed in bankruptcy, and within weeks, Melvin had five contracts to liquidate other stores.
He quit his sales job and over the next 18 months liquidated more than 40 different dealerships.
“Then one day it all stopped,” Melvin said. “All the weak dealers were gone, and I was worried what I was going to do. But as luck would have it, within hours a bankruptcy trustee I’d liquidated a Kawasaki shop for called and asked if I wanted to try a sporting goods store.”
Melvin soon learned that every industry has periods of highs and lows.
“We might do home improvement centers, sporting goods stores, then clothing stores, toy stores,” he explained. “They all have their own cycle, and in most cases they are totally unrelated to the U.S. economy. It’s similar to human life. Eventually they fail, and when the store closes we’re there to help them. Kind of like a mortician. We didn’t cause them to go out of business, but we’re there for them at the end of their life cycle. We buy the equipment, recycle it and sell it to people that are starting new businesses or expanding.”
It was during the liquidation of the Robert Hall department stores in 1977 that Melvin discovered the niche that would become NREL.
When his plans to buy a number of Robert Hall locations in Michigan were ruined because he had gotten the auction information from a newspaper article that had printed the wrong date, he attempted to negotiate a deal with the much larger California liquidation company that had bought all the Michigan stores. The company had no intention of doing business with him — until a legal error cut the liquidation timeline from six weeks to two. Melvin was offered a chance to liquidate the fixtures from the stores.
Melvin and his then 19-year-old partner, Tom Nystrom, contracted Nystrom’s high school football team to go from store to store around the state, loading the fixtures into a semi truck. The fixtures were then stored in rented barns and sold off over the course of the next year.
NREL is now one of the leading distributors of used retail equipment in the nation, selling racks, shelves, shopping carts, forklifts and other equipment. The turnaround on fixtures and equipment is now less than 30 days.
That business has blossomed into a number of other ventures as well.
NREL remodels some of the nation’s largest chains. Over a period of nights, NREL will remove portions of a store’s fixtures and replace them with new equipment until the renovation is complete. The firm also imports new store fixtures for this purpose and even manufactures its own brand of shopping cart.
Contract shipping and warehouse operations also are available to clients.
Name: Bill Melvin
Company: National Retail Equipment Liquidators
Residence: Grand Rapids and Northern California
Personal: Married, with two married daughters and one son
Business and community affiliations: Kent County Conservation Association
Biggest career break: Being offered a job by a competitor while a salesman at Honda