Beyond nuts & bolts: Dave Hight and his son Barry have kept Boulder's McGuckin Hardware an independent enterprise.

• Author: Cote, Mike
• Position: Statistical table - Company overview

It's the classic tale from the cutthroat retail world. A big box comes to town and crushes the local independent store through the sheer power of its sales volume and the ability to dictate low prices from its vendors.

Barry Hight could tell you that story, but in his version the family-owned business doesn't roll over and die. McGuckin Hardware, an institution in Boulder for more than 50 years, has found a way to survive and thrive in the corporate-chain era by continuing to do what it does best: listening to its customers and making sure they have what they need and want, from energy-saving compact fluorescent light bulbs and obscure plumbing parts to an Amish-built child's wagon that won't tip over.

For years, the city of Boulder resisted the sales tax draw of big boxes, making it difficult for a giant like Home Depot to gain entry. But city leaders ultimately relented in a bid to ensure the success of Twenty Ninth Street, the open-air shopping center that replaced Crossroads Mall. Nearly two years later, Hight says McGuckin suffered a bit initially from the new competition but ultimately has benefited from having Home Depot up the street.

"It's increased sales because we have the opportunity to respond to the marketplace," says Hight, whose grandfather, Bill McGuckin, opened the original store in 1955. "It's hard for (Home Depot) to react fairly quickly to a snowstorm. We have 4,000 to 5,000 vendors to pull from."

McGuckin can feel the pinch on pricing, however, when Home Depot spotlights hot products: "They're a category killer. They'll pick the No. 1 item and take a low margin on it to get the draw."

McGuckin's defense against such tactics is to pack the 60,000-square-foot store with more than 200,000 items. The business Bill McGuckin first stocked with little more than nuts and bolts and sporting goods has grown to an enterprise with 18 departments, including housewares, pet products, automotive accessories, electronics, art supplies and seasonal items. McGuckin also operates a separate home-design center store nearby and a 50,000-square-foot warehouse a few miles away on U.S. 36 from which it delivers new stock to the store via truck every 30 minutes.

Though McGuckin has the advantage of being based in a city known for championing independent businesses, it still must battle the perception that its prices are higher than discount stores, Hight says. Sometimes that perception is reality--McGuckin aims to keep both its vendors and customers happy about pricing--but the store relies on the strength of its selection and the kind of old-fashioned customer service that means having 60 to 70 people on the sales floor at any given moment.

"People come to a place like McGuckin and find that the pricing is higher. Really, the value added is the service," says Hight, during an interview on the second floor of the store near the company's business offices. "And we look for the right product, a quality product, that takes it to a different level so we're not competing just on price alone."

Hight refers to a roll of blue painter's tape as an example. McGuckin can only buy 60-yard rolls from its suppliers, while a discounter will offer 30-yard rolls. "So to the consumer, it looks like we're charging them more, but it's less when you think of the by-foot price."

From the locked glass double doors on the second floor that seem to lead nowhere but straight down--installed years ago to move office equipment via forklift--visitors can see customers wandering through the store as sales workers in bright green vests answer questions and direct them to products.

Hight, 52, wears one of those green vests and so does his dad, Dave Hight, who at 78 still shows up every day to work the sales floor. Barry Hight's wife, Vicki, is McGuckin's office manager, and their grown son and daughter have worked at the store and still do when they're in town. Hight has an aunt who works at the store, an uncle who serves as a consultant, and his two brothers have been employed there over the years.

"There are a lot of family members--not only the owners, but a lot of generations that work here," says Hight, who took over leadership from his father 12 years ago. Hight worked at the store part-time during high school but later spent about five years at an auto dealership repairing cars. He returned to McGuckin in 1979, shortly after it moved to its current home at 2525 Arapahoe Ave. "We have a lot of fathers who have sons and daughters who work here ... it rounds out the business to have family."

That kind of environment has fueled a loyalty that was once commonplace in business but these days is almost extinct. Randy Dilkes, a longtime store manager, carries a handwritten card in his schedule book with the names of nearly three dozen workers. Next to each name, a number: 38, 32, 29, 27, indicating how many years they have worked for the company. Nine have racked up more than 20 years, including Dilkes, who just reached year 30.

"I came from the East Coast and had worked for nothing but chain stores," says Dilkes, who logged several years with a toy retailer. "When I moved here, I wanted to do something that didn't involve a corporation."

Hight says McGuckin employs far more workers than a corporate retailer its size. Its current payroll includes 170 full-time and 125 part-time workers. The extra staff gives it an edge in the customer-service battle. But McGuckin's corporate competitors have an ally that has long been a thorn in the side of family businesses: the U.S. tax code. The transfer of family business to an heir is basically an estate tax, Hight says.

"We saw this in the '80s with the farms, when the farms were valued at a very high rate," Hight says. "And farms only produced so much every year. When the principal ownership passed away, it passed to the next generation. It was taxed heavily based on the net worth of the property, not based on what the business did every year."

McGuckin has had offers over the years to be acquired but has opted to remain independent. That means navigating a tax system that makes it hard for families to pass on their businesses to succeeding generations, Hight says.

"The tax structure is kind of set up to be against a small business, so you have to prepare the small business for the event of people passing. So we've tried to do the things to set it up," he says. "It becomes another tax burden that a corporation would not have...