Volume 18, Issue 5 - September/October 2014

feature

Baltimore Business:
Boom AND Bust
An In-depth Look at the Baltimore Window Film Market
by Casey Flores

Baltimore is a place of mixed reviews. Forbes has the city ranked a stalwart 38 on their list of the 200 Best Places for Businesses and Careers in the United States. CNBC has it listed as one of five American cities in the midst of fiscal crisis, while Money Magazine lists Baltimore seventh out of the top ten hottest housing markets of 2014.

But how does Baltimore rank for window film? After all, the city will be home to the 2014 International Window Film Conference and Tint-OffTM in October. We talked to three local tint businesses, all of whom tint automotive, residential and commercial, about the state of the window film market and reviews were once again mixed.

In fact, since the recession of late 2008, one of them has experienced tremendous growth, one has downsized and one says business has “pretty much stayed level.”

Recession Recess

“Like any other business, you have these ebbs and flows,” says Bill Valway, owner of Absolute Perfection Window Tinting & Graphics in Sykesville, Md., a suburb of Baltimore 30 miles west of the city.

And the recession was definitely an ebb. Valway’s sales fell by nearly 10 percent and he had to let go half his staff.
“[In the window film industry], we all suffered and a lot of the commercial building had slowed down. People just wanted to hold on to their cash,” Valway says.

He explains that during the recession, many people lost their jobs at tint shops so they started tinting businesses of their own, which led to major price reductions and pricing wars.

Valway realized the key to his comeback would be offering high-end film “not necessarily at bargain-level prices.” His company’s sales have increased nearly 630 percent since then.

“We really try to cater to the guys that are looking for quality tint jobs … not the cheapest possible tint jobs,” he says.
Other Baltimore tint shops have employed that strategy as well.

“What I find in the tint business is a lot of little shops open up and they don’t keep them like they really should. They ‘whore’ the market up. They’ll [advertise]: ‘do any car for $99,’” says Wes Gray, owner of D&L Professional Window Tinting in Parkville, Md., which is just northeast of the Baltimore beltway.

“I don’t offer any of the films that may give somebody a problem because the last thing I want to do is give somebody a bad taste in their mouth about the industry … because if you sell the right product the right way, you keep the market strong,” says Gray.

And the strategy seems to be working.

“3M tells me … for just the auto window film industry … [our store is] the biggest one they’ve seen in the world,” Gray boasts.

“In our peak time, we could do 60, 70 cars in a day,” though he says business is about the same as it was around the time the recession hit.

George Sanchez, manager of Tint & Detail Shop in Rockville, Md., says after the recession, business “slowly picked up [and] after a couple of years, things started going back to normal.”

But then something happened.

Shutdown Slump


A mere 40 miles outside the nation’s capital, all three dealers are directly affected by everything that happens in Washington DC. The Baltimore metropolitan area alone is home to nearly 50,000 federal employees, according to the U.S. Bureau of Labor Statistics.

When the United States Congress failed to reach a budget agreement, the federal government “shut down.” It lasted from October 1 to 16 during which 800,000 “non-essential” federal employees were effectively out of work.

“When the government shutdown hit, [business dropped off],” and though it only lasted a little more than two weeks, it kicked off what Sanchez says was “the worst winter in 15 years … Usually the winter slows down because it’s the off-season [but] comparing this winter to past winters, we were down 40 percent … To be honest with you, we really haven’t recovered
from that.” He says his sales are down 25 percent since the recession.

Absolute Perfection took a hit too.

“All [of 2013] was a tough year in the sense that we had anticipated the same amount of growth that we had the year before,” which was growth of nearly 35 percent. So he hired people, invested heavily in advertising, and only increased sales by 12 percent. “The government shutdown … affected the whole rest of 2013,” Valway says.

Gray of D&L, however, says they did okay. “We stayed pretty steady even though we had probably one of the coldest winters since the late 70s [along with] the shutdown … do I think [sales] would have been [stronger] if things such as that hadn’t happened? Yes.”


Market Upturn


But now the market is picking back up. A new breed of customers are walking into tint shops, not necessarily to make their car look cooler, but to keep their skin healthy.

“Today I see more people from the age of 30-70 getting film on their car versus 18-30 because there is more awareness … about putting film on [cars in order to protect oneself from skin cancer],” Gray says.

Sanchez agrees. “The biggest change that I’ve seen is the older people getting tint in order to protect their skin. [We’re] seeing more melanoma and we’re getting more people referred by dermatologists for the UV protection. People are becoming more conscious of the fact that [cancer rates are increasing] … People want tint [because they] want to protect their skin, not necessarily for the look or privacy.”

Baltimore tint shops are reaching out to the local dermatologists in order to capitalize on this new trend. Gray is even running ads about the UV protection film offers on the radio.

But besides the realm of skin protection, Valway has targeted another sector of the market: commercial buildings looking to save on electricity.

“That’s coming back really strong because we’re in the right place. We’re working directly with these universities on these energy initiatives to reduce operating costs … that’s again a differentiator,” he says.

Valway has helped his commercial customers take advantage of special savings offered by Maryland’s two largest energy providers: Baltimore Gas and Electric (BGE) and Pepco, both local utility companies.

BGE will give businesses that lower their energy costs via window film 20 cents per kilowatt hour saved —on top of naturally cheaper monthly bills. Pepco offers 16 cents. Tint shops must be approved contractors in order to offer the rebates, which involves providing the companies with references, proof of insurance, and a “trade ally” meeting.

“Sure, anyone can come in and sell tint but they haven’t been through the process of applying for the rebate, they don’t know how to put the proposal together. Half of them can’t even put together an energy audit. Instead of fighting over the difference of $.25/sf on some of these projects, we’re going after higher margins of business and we’re the only one on the table.”

Valway says the rebates will cover about 40 percent of the tint jobs he does, which will soon pay for themselves in reduced operating expenditures.

“We did the Geico world headquarters and we got them $74,000 in rebates. That was our game changer. Our goal is to get in [the rebate programs] before everyone else does because once everyone starts smelling the money, they’re all going to go after that money and hopefully by then, I will have already developed my relationships.”

Gray respectfully disagrees with Valway. Though he agrees that commercial tinting is the fastest growing industry in the region, he says the rebate doesn’t “make or break [business]. If [people] wanted the product on their building, they wanted it for a reason” and are not so concerned about rebates.


Diversification Helps

In order to get through tough times in tinting, these dealers rely on their diversity.

“We diversified our business enough that if auto isn’t busy, flat glass is. If flat glass isn’t busy, auto is or wraps. One of those things is carrying the day … the year we added vehicle wraps is the year we really started to grow because it wasn’t just this one thing that was carrying the day, it was multiple things that were contributing,” Valway says.

Diversification helps D&L stay busy, too. “Primarily we do auto film, but we do have a good size residential/commercial department and those boys are busy every day,” says Gray.

WF


Casey Flores is the assistant editor of Window Film Magazine. He can be reached at cflores@glass.com.



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