Strong demand, skyrocketing sales and an influx of customers are spurring independent garden centers to grow. And as longtime IGCs owners move into retirement, nearby companies are finding opportunities to expand their operations. Building on the brand recognition, strong reputation and experienced staff of existing locations, as well as the expanding marketplace, acquisitions have been taking off in recent years.
Due to the gardening boom in 2020, there has been an increase in private equity interest since the pandemic, which may be driving some of the sales. Mike Zaffaroni says his company, Liberty Landscape Supply (No. 63 on our Top 100 List), has been approached by several interested parties. “I really think over the past couple of years that the availability of investment dollars in the capital markets has had a significant impact on the consolidation we’ve seen in our industry,” he says.
But, he also notes that the industry is so specialized that he expects to see more acquisitions by IGCs or purchases from staff.
Finding opportunities to grow
Without an interested family member or employee, retirement has left IGC owners with no other choice than to list their companies for sale. Oftentimes the land is more valuable than the business itself, but after decades of hard work and dedication to employees and customers, acquisitions can be an attractive solution.
“They’re very interested in keeping their business legacy alive from their lifetime of hard work, and they want their valued customer to continue to be served at the highest level in their communities,” says Marce Ward, CEO of Calloway’s Nursery and its subsidiary, Cornelius Nursery, in Texas. “And they desire continued opportunities for their dedicated teams that they’ve built. So a lot of the acquisition, I think, is being driven from that.”
Cornelius Nursery acquires Tom’s Thumb Nursery
Retirement was what drove the sale of 45-year-old Tom’s Thumb Nursery to Cornelius Nursery last year. Peggy Cornelius (no relation to Cornelius Nursery) was ready to step away from a lifelong career, but wanted to continue the garden center’s legacy.
The long history of Tom’s Thumb was attractive to Cornelius Nursery, along with its loyal customer base, as well as the desirable Galveston location. “It’s just a very charming garden center,” Ward says.
Cornelius opted to keep the Tom’s Thumb brand and operates the garden center as Cornelius Nursery at Tom’s Thumb, using both names in marketing efforts.
Calloway’s Nursery has been expanding its footprint in the Texas market for years, making it one of the largest independent garden center businesses in North America. While the company (No. 3 on our Top 100 Independent Garden Centers list) has typically opened one or two stores a year, it’s expanding even more this year with the opening of three new locations — one under the Calloway’s name and two as its subsidiary, Cornelius Nursery, which serves the Houston and Dallas/Ft. Worth area.
While Calloway’s new Prosper, Texas, location and Cornelius’ Spring, Texas, store are new builds, the 1-acre Galveston acquisition came with its own dedicated staff. Although the store’s ownership changed hands in January, the new location is operating as Tom’s Thumb by Cornelius Nursery to make the most of the location’s reputation with customers.
Like many garden center sellers, Cornelius was pleased to place her garden center in good hands to continue serving her longtime customers. “We are grateful to our loyal customers, and we are pleased that our legacy of quality and service will continue through Cornelius Nursery,” she said in a press release.
While Calloway’s is always looking for opportunities to grow, Ward says the company isn’t growing just for growth’s sake. Each opportunity must be carefully examined and evaluated for its contribution to the business as a whole. For example, Calloway’s has a specific demographic package it uses to assess any potential new location. “We have to work pretty hard at it, but we continue to find those opportunities,” Ward says.
B.B. Barns acquires Woodley’s Garden Center
Over in Columbia, South Carolina, Woodley’s Garden Center was in much the same position as Tom’s Thumb. After 38 years in the business, founder Rick Woodley was retiring, and with no successor in place, the garden center sold its two locations to B.B. Barns, based in Asheville, North Carolina, last year.
“It’s a unique time in our industry because for whatever reason, it seems like a lot of garden centers were founded in the 1980s and it’s time to transition,” says Thomas Gibson, second-generation owner and CEO of B.B. Barns (No. 82 on our Top 100 Independent Garden Centers List). “And either you have a plan or you don’t, but most people, it seems, don’t have a child who wants to come into the business or don’t have a key employee to transition it to.”
Gibson was originally looking for an opportunity to buy a location within a two-hour radius of Asheville, but when he spotted an unnamed two-location garden center listing online in November of last year, he dug into the details as well as the Columbia demographic.
After discovering the opportunity was Woodley’s, Gibson reached out to the broker, and within a week, his team went down for a visit. That same day, driving back, they decided to put it under contract in a push to make the transaction before spring sales began. B.B. Barns officially took over in February and hit the ground running.
Despite the short time line, B.B. Barns did its due diligence before entering the contract, including a financial analysis and facility inspection. But one of the biggest pieces of the analysis was the company culture. Luckily, Woodley, gave B.B. Barns access to employees before the transition, so the team made several visits and had as many conversations as possible before taking over.
“You don’t want to acquire something that has a toxic work culture, or the people are all burned out or it’s dysfunctional,” Gibson says.
After much deliberation about keeping the original name or branding as B.B. Barns, the team decided to fully transition from Woodley’s to the B.B. Barns brand sometime this summer. In the meantime, the original Woodley’s website is still up and running, with a notice of the new owners on the home page. The stores even hosted a send-off for Woodley at a meet-and-greet at both locations on June 4.
“I don’t know if that’s right or wrong in every situation, but in this case, we feel pretty comfortable that Columbia at large will embrace B.B. Barns,” Gibson says. “We think there’s a lot of positive energy and excitement there. At the end of the day, we’ll probably create less confusion for customers if we just simplify it.”
Liberty Landscape Supply acquires Trad’s Garden Center
In Jacksonville, Florida, yet another retirement led to a new location for Liberty Landscape Supply, which has been on the lookout for expansion opportunities, both organic and acquisitions, since 2015, adding a second newly built store in 2017. In the fall of that same year, owner Mike Zaffaroni contacted the owner of Trad’s Garden Center and expressed his interest in buying if the IGC ever went on the market. That conversation would continue to the spring of 2019, when the owner was ready to sell, and the company finalized the acquisition in November.
The Trad family opened their garden center in 1971, but like so many other garden centers, the owners had reached retirement and the younger generation wasn’t able to or interested in taking over the business. Denise Trad Wartan, daughter of the original founders, was focused on managing Trad’s pest control side and decided to move on and sell the garden center.
The Trad’s location was very desirable, Zaffaroni says, so the land was a critical component of the deal. He has a long-term lease on the land from Wartan’s parents with an option to buy in the future. “I would not have been able to find another similar parcel to do something like this for at least 5 miles in either direction,” he says.
Zaffaroni says he jumped at the opportunity not only because of the location, but also because chances to purchase existing IGCs are so rare. In Liberty Landscape Supply’s area, there are plenty of big-box stores like Lowe’s and Home Depot, but not many independent garden centers.
“Jacksonville is a big city but it’s not like we have dozens and dozens of garden centers and they just all over the place,” Zaffaroni says. “So that did make it seem like a prime opportunity, and one that was not going to come along every year. So this one seemed like a good fit.”
And beyond the allure of an existing storefront, the Trad’s property was within the parameters Liberty Landscape Supply was looking for at about 5 acres, with a demographic that met its requirements. The traffic count also looked good, so when Zaffaroni contacted his accountant about the deal, he immediately got the green light. The company had just signed a big contract with the city of Jacksonville, so the timing wasn’t perfect, but it was too good to pass up.
For Zaffaroni, who is in the process of building a fourth location from the ground up, the existing infrastructure was a boon. Trad’s ceased operations on Oct. 31, and Liberty took over on Nov. 1 without skipping a beat. “It was nice to do a deal that way versus spending what can be millions of dollars up front until you finally get to a ribbon cutting and start trying to collect some of those dollars on the back end,” Zaffaroni says.
Liberty Landscape Supply has kept the Trad’s branding, operating as Liberty Landscape Supply at Trad’s to maintain the well-known name while reinvesting in the structure and inventory at the new location. “They always had a good name for all the years that they were in business,” Zaffaroni says. “So there was no reason for us to distance ourselves from anything that they were or their name.”
Strong staff assets
All three garden centers were lucky enough to retain the existing staff at their acquired locations, easing the transition and providing consistency of service to customers.
B.B. Barns is still assessing the staffing at its new locations, deciding not to make any big changes during the hectic spring months. Between the two locations, B.B. Barns has inherited about 60 staff from Woodley’s, adding to their 100 or so in Asheville, split equally between the company’s garden center and landscape division.
While B.B. Barns hasn’t made any big changes to the operational structure yet, the company plans to assess the staffing over the summer and roll out its organizational structure once the spring sales die down.
“If you have a business that has the right people in it, the rest of it kind of takes care of itself,” Gibson says. “For us, the big challenge is that we shouldn’t just assume everything is hunky-dory, operating smoothly.”
So Gibson plans to dig into the details at each location, where, historically, they have operated almost as individual businesses. His goal is to bring the two Columbia stores under the same umbrella and increase the overlap in staff responsibilities. For example, he plans to merge buying responsibilities across all three stores. He also hopes this will allow some part-time individuals to go full-time, working at more than one store.
The “terrific staff” was an important asset of Tom’s Thumb Nursery as well, so Cornelius Nursery was excited to keep all of the original employees, minus the original store manager who wanted to retire along with the owner. To help the changeover, Ward says the Tom’s Thumb staff have received ongoing training and education from Cornelius, such as a 10-week education series on new spring plants and products.
Ward says the transition has been “really smooth,” partly due to the Cornelius benefits package, which team members were excited about.
Liberty Landscape Supply went the same route, offering all of Trad’s staff a place on the team, and all accepted except for just one. But since the acquisition talk began in spring and finalized in November, Trad’s needed to hire some additional staff in the summer.
So Wartan approached Zaffaroni to see if he wanted to bring over some Liberty staff or hire from outside. Luckily, Zaffaroni’s stepson was employed at Liberty, so Zaffaroni sent him over to work at Trad’s while remaining on the Liberty payroll. He spent three months at Trad’s learning the ins and outs and assisting with the transition to Liberty Landscape Supply.
“It was really very helpful,” Zaffaroni says. “He earned the trust of the people that worked there and that really benefitted us because when we came in, we definitely had more structure and more rules. But they didn’t feel like this big corporate giant was coming in and telling them, ‘We’re going to change this and we’re going to change that.’”
Zaffaroni did make some changes like raising some salaries and bringing in a Liberty Landscape Supply general manager to help ease the change. That was also crucial to ensuring the POS system was operating properly, supplying critical data for the store’s success.
Including its acquisition, Calloway’s Nursery now boasts 27 locations with no signs of slowing down. “We’re very optimistic,” Ward says. “We’ve all seen how many new gardeners were created in our country during 2020 and so far, all indications are that that is sticking — that it wasn’t a once and done situation. They got the gardening bug and now they’re really into it. So we believe that’s going to exist well into the future. And it provides a lot of optimism.”
And after opening two locations in just a few years to grow from one to three, Liberty Landscape Supply is planning to continue its growth trajectory as well. “I find that this industry has a tremendous potential,” Zaffaroni says. “There’s so much opportunity for growth in what we’re doing. We do have some distinct advantages in Florida, but I think just overall, the industry that we’re in is a great industry and a very good business to be in.”
Liberty is in the midst of building a fourth, 13-acre location in St. Augustine from the ground up, planning to open its largest location to date next year.
The Trad’s location itself has seen growth since the acquisition, too. Now offering installation services and about five times more inventory on a dollar value basis including palletized stones and field-grown trees. Along with the inventory, the staff has grown from six to about 30.
“When you pump a place full of inventory, you have some work, but I think it's exciting because then the customers also get excited, which empowers the staff,” Zaffaroni says.
And while growth is exciting, it comes with unexpected challenges. The increase in staff and foot traffic at the new store has increased bathroom usage. So Liberty Landscape Supply had to install a new septic system.
“All of a sudden you have these growing pains and you’re like, ‘I thought this was supposed to be easy and fun and you’re supposed to make a lot of money,’” he says.
But despite the challenges, Zaffaroni says Liberty Landscape Supply is pushing forward. Zaffaroni foresees plenty of opportunity for expansion for not just years to come, but decades. “We’re actively looking all the time,” he says. “It could be another acquisition, or it could be another ground-up build, but we’re going to be smart. We’re trying to pick the right places at the right times.”
Gibson expects to see fewer independent garden centers in the marketplace in the next 10 years versus the previous decade but that won’t slow them down. As a second-generation owner, he feels lucky to be in a position to think about expansion.
“Our company finally has the kind of capacity and management structure to grow,” Gibson says. “It’s often pretty impossible for a first-generation owner operator to even think about growing because they’re so swamped with getting the business started and getting the business going. So for me, it’s a cool opportunity since I’m very passionate about the B.B. Barns brand.”