The quality of a company isn’t accurately measured in times of plenty — as an old saying in the retail world goes, “You don’t impress anyone at Christmas.” The true measure of a firm, be it strategy, staying power or spine, only is revealed when exposed to the heat of competition and the pressure of down markets.
By these or any other measurements, Little Rock-based commercial distributor Hugg & Hall Equipment is a glowing success story. Now in its 66th year, the firm has seen the best and worst of construction times, methodically moving forward to the point where the company ranks among the top echelon of its market peers.
“We’ve always kept our eyes on the goal,” said Robert Hall, vice president, when asked to encapsulate the company’s sustained success. “We made sure that the company stayed stable, and we weren’t selfish with our money, our time or any of our assets. That’s allowed the company to grow at a very fast pace and allowed us to share our success with our people. We’re blessed.”
Hugg & Hall’s history has been marked by bold, decisive leadership and an eye for expansion opportunities. After growing locations organically within the state over several years, the company turned its eye to acquisitions to expand its footprint.
“We expanded in Arkansas, first into Springdale and then south Arkansas,” Hall said. “That was our original footprint; we call those our legacy stores. We expanded into Conway, Jonesboro and Texarkana. Then, we started buying companies.”
In 2011, the firm purchased Arkla Taylor, which took the company from operating strictly within the state to having an immediate presence in four states besides Arkansas, where Hugg & Hall remains an industry leader.
“We had been operating in Arkansas only, but that first acquisition had a sales territory that included Louisiana, east Texas, Oklahoma and southern Missouri,” Hall said. “That acquisition started driving us to fill in that territory with other locations and other brands to sell and rent in that footprint.”
The effort has steadily grown the company’s headcount (currently 720 employees) and locations (approaching 20) right up through the present day. After Arkla Taylor, Hugg & Hall purchased Westquip in 2012 and RPM Service and Rentals in 2016. In 2019, the Little Rock company was named the exclusive dealer of Toyota forklifts for the entire state of Louisiana, and officials just finalized acquiring Southern Material Handling on April 1. The latest buy strengthens Hugg & Hall’s Oklahoma presence, adding 50 workers to the payroll.
Hall said growing in this manner isn’t just about acquiring real estate, but also maintaining existing business relationships in what is often a hyper-local business.
“We don’t have a steady goal to acquire people just to acquire. We look for opportunities constantly to try to expand within our own footprint,” Hall said. “Every acquisition we’ve made has been to expand our enterprise to be big enough to justify having facilities and people in those areas. We know that’s what it takes to really service a market, which is why we love to keep the existing staff. I’d say in all four of our acquisitions, we’ve kept 90 percent of them.
“It’s very important in our business, the relationships with the customers, as well as just the knowledge of the industry. Those are big assets, and that’s really what we’re buying. We’re buying those people and that knowledge and those relationships. Inventory is easy. Anybody can buy that. The history with the company is the key ingredient.”
This kind of strategic, growth-minded thinking has been the hallmark of the company since Charles Hugg bought the firm in 1970, an era when the firm was operating only in Little Rock and Fort Smith. Since then, Hugg & Hall’s strategy has continued to be refined under Charles’ son John, who in 1990 purchased the firm from his father along with Hall, who joined the company in 1979.
John picked up where his father left off, accelerating the company’s rental business which, combined with parts and service, now is roughly on par with equipment sales as a percentage of annual revenue.
“Early on, we were a Clark equipment distributor,” Hall said. “The products that we represented were Clark forklifts — they had a line of Ranger log skidders — and Bobcat. We were predominantly a sales, parts and service company, very small in rental.
“John [Hugg] championed that whole rental process. He began emphasizing rental probably as far back as 1984 or 1985. Today, that sets us apart from most equipment distributors in the country. Our ability to grow not only what we call our distribution business, which is the brands that we sell, rent, repair and sell parts for, but we now have another huge arm of the company driving the short-term rental business that is not only our distributor products, but other brands.”
Strategy and fearlessness have not only fueled the company’s growth and expansion thus far, it’s also been a major reason why Hugg & Hall continues to weather the current supply chain fallout as well as it has. Among industries that continue to be affected by the pandemic, those dealing in mechanical equipment and parts (such as transportation, automotive, farming or, like Hugg & Hall, heavy industry and construction) have felt the sharpest pinch.
Starting with computer chip shortages — as ubiquitous in the latest equipment and vehicles as they are critical — supply chain bottlenecks around the world have steadily squeezed dealerships, repair shops and retail parts outlets with longer wait times and higher prices.
“It’s very challenging,” Hall said. “Every brand, everything we purchase, has been stretched for availability and price. Prices are going up and availability is going out. As far as availability, the wait time has tripled. The price has gone up 25 percent. We get notices of price increases every day and availability is not getting any shorter. That’s a challenge, no question about it. We just have to keep looking for other sources and leverage our ability to buy the best we can and try to beat the competition to it.”
Some supply chain experts say it may be 2023 before the situation returns to some semblance of normal, but Hugg & Hall hasn’t been content to passively wait things out. Instead, the company has attacked the issue with customary fervor, changing its own logistical and procurement strategies to be nimbler and, when feasible, overbuying certain items to deepen reserve inventory.
“We’ve been fortunate enough to have such an experienced team, and we’ve been able to manage pretty well through [supply chain issues],” Hall said. “We’ve been buying more aggressively than the average distributor. We haven’t been scared to invest, to take advantage of opportunities for availability and to purchase as fast as we can to keep our prices reasonable for our customers.
“We’re so blessed to have the success that we’ve had all these years, as that’s what’s enabled us to be big enough to take those calculated risks. It’s paid off.”
Hall said while it is hard to know what lies around the corner, the promise of federal infrastructure funding suggests the company’s best days are still ahead of it. Even in the midst of labor challenges and knowing the fickle moods of the marketplace, he said Hugg & Hall leadership is bullish on what’s to come.
“We’re very excited about the future,” he said. “The region we represent, meaning these five great states, are in the sweet spot for America’s economy. The infrastructure bill may not directly impact us that much, but the overall economy in these five states has been very good to us. It’s one of our pillars of success, in fact, and has been for the past 40 years.”
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