Moving parts Fith-generation family-owned business sells nine stores to Carquest

There was a time, about 80 years ago, when N.H. Bragg & Sons sold headlights and fenders for horseless carriages.

What was unheard of at the time was the concept that motorists would be driving at night or even over long distances. Oil filters? What were they?

These days there are more than 240 models of automobiles with at least 25,000 parts. There’s also increased competition on a local and national scale to be the primary seller of everything from spark plugs to air filters.

Faced with the reality that fighting for market share is intensifying and profit margins are growing slimmer, N.H. Bragg this week sold its nine statewide auto parts stores to the No. 2 chain in the country, Carquest. Terms of the sale were not disclosed. Four of more than 40 positions were eliminated.

It was a tough decision to make, said John W. Bragg, president of the company and its fifth-generation family owner. Auto parts contributed to one-third of N.H. Bragg’s sales last year and amounted to one-half of its inventory.

More importantly, auto parts helped define exactly what the 148-year-old company was all about.

“For my dad [Charles], who is 91, it’s a bit nostalgic as far as he’s concerned,” the younger Bragg said. “It’s a bit emotional. But he’s also a realistic man.”

The reality is that cars are lasting longer, they don’t need to be serviced as much, but when they do, motorists often have to go to a dealer.

Look under the hood, Bragg said. Engines have become so complicated, with computer circuitry in all directions, that the only place where they can be repaired is at dealerships and not at neighborhood shops. Computerized engines require sophisticated diagnostic equipment, and the high price tags on those machines make them too expensive for small repair shops.

Dealerships get their parts from the vehicle manufacturers, while the smaller repair shops get them from stores like N.H. Bragg, the company’s president said, and the smaller shops aren’t buying as much.

“Cars are lasting too long,” Bragg said. “You can buy a new car and drive it 100,000 miles before you have to do anything to it. The complexity under the hood brings you back to the dealer. That means that the market isn’t there which once was.”

N.H. Bragg sold auto parts to the smaller repair shops and to do-it-yourselfers at nine stores throughout the state, from Fort Fairfield to Portland. Carquest has 2,800 stores nationwide and a sales and management formula that is followed in each one of them. The tracking of inventory and sales is done on specialized computer software applications.

“We couldn’t put together the infrastructure … a super-duper catalog and being on the Internet,” Bragg said. “All the things that are needed to compete are costly.”

The sale of the auto parts stores was not done out of desperation, said Jon Eames, vice president of N.H. Bragg.

When John Bragg retires in four years, Eames, John’s cousin, will be the sixth generation to be in charge of the company. Ironically, the stores were profitable, with several of them reaching the million-dollar mark in gross sales, for the first time last year, he said.

But that success might not have been there three, five or 10 years from now, Eames said. Eventually, the other Bragg business sectors might have had to carry the auto store sector.

“We were close to that now, of carrying it, and we could see that getting worse going into the future,” he said.

In a letter to the company’s more than 3,000 customers, Bragg and Eames wrote, “As we approach our 150th anniversary, we recognize that we cannot continue to serve this market as it should be served and remain family owned and also serve well the customers of the other elements of our business.”

N.H. Bragg, since its early years, has been a vendor of commercial supplies, which these days include industrial, welding, safety and janitorial products.

Overall sales last year were up nearly 8 percent, and the company has gained market share over its competitors throughout the state and in New Hampshire, Eames said.

Even Bragg and Eames are impressed by an 8 percent sales growth during 2001 while the state’s economy was in a recession. The paper industry, Eames said, is “in worse shape than we’ve ever seen.”

But the bulk of their sales have been to clients that were actually experiencing a good growth year, he said, such as Cianbro, ZF Lemforder, Brewer Automotive Components and Mid-State Machine in Winslow.

“We just happened to make inroads with the right customers,” Eames said.

With a “strong balance sheet” from the sale to Carquest, N.H. Bragg soon will modernize its warehouse, bar-code its inventory, and set up a Web site.

“We’re going to focus on doing more and doing it more efficiently,” Eames said.

In 100 years, Bragg said, he suspects that N.H. Bragg still will be operating in Bangor and still will be family-owned. To ensure that that happens, the auto parts stores had to be sold, he said.

“This may be painful to some,” Bragg said, “but my response is to make sure the company is here to celebrate another 100 years.”