Why a contracting retail market doesn’t concern FacilitySource

Source: Dan Eaton, Columbus Business First – Why a contracting retail market doesn’t concern FacilitySource

FacilitySource LLC is growing even as some of its biggest customers are shrinking.

The Columbus-based facilities management company expects to add 272 new jobs as it expands at 200 E. Campus View Blvd. in the Crosswoods area. It’s a project that received as much as $406,500 in city incentives last week and was approved for as much as a $1.58 million state package Monday.

The 11-year-old company has 115 clients and oversees more than 120,000 stores and sites. So far this year, sales are up more than 50 percent, following several years of double-digit growth.

The bulk of its work is in retail. But that is a world in flux as chains large and small shutter shops, which is both a positive and a negative for FacilitySource.

“The headwinds in retail, in the short term, benefit us,” CEO Bill Hayden told me. “Companies are looking to save money and outsourcing to us could be a solution.”

But longer term, the business is paying attention to the contraction and what it means for its business.

“There’s going to be less stores,” he said.

Fewer stores could mean less work for FacilitySource, which is why it’s prepping for that future by diversifying.

Logistics, health care and grocery all are areas where the business is pursuing clients. It is researching assisted living as well. And not all of retail is bad news. One dollar store client has more than a thousand new stores in the works, so there are still some growing merchant segments.

Hayden traces the growth to 2012 when the company was acquired by Warburg Pincus LLC and made a key change in its model, moving from being just a software provider to being a service manager.

“We were the platform that helped clients manage their service providers,” he said. “By 2010, clients stared asking us for provider recommendations.”

A company with 1,000 stores wouldn’t go out and hire 1,000 plumbers, but instead would use a larger aggregator with access to a network of plumbers, for example. It was five years ago that FacilitySource began building its own networks of plumbers, electricians, tradespeople, etc..

“We got the contracts. We manage the providers,” Hayden said.

The new model gets better pricing for customers, is better for consistency across stores since one company is handling coordination and generates better strategic insights.

“We have 10 years of data now on costs and when equipment needs to be replaced,” Hayden said.

The company is on the third floor of its current building. Build-out on the first floor is expected to wrap up by late October, when employees will move there and workers will start on the third floor. That phase could be done by the end of the year.

“We’re likely to wind up taking more space in the building, too,” Hayden said. “We’re going to fill it up.”

The bulk of the new hires in Columbus – approximately 186 – will be service delivery coordinators. The company’s largest offices are in Columbus, where all service operations are handled, and in Phoenix with smaller offices in Dallas and Racine, Wisconsin.