Howard's Medical Supply scoops up inventory in under-served areas

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Friday, October 6, 2017

YAKIMA, Wash. - When Erik Mickelson heard fellow local HME provider Keeler’s Medical Supply had filed for Chapter 11 bankruptcy in June, he was shocked.

"They were in business for 40 years," said Mickelson, CEO of Howard's Medical Supply in Yakima, Wash. "When we started, they had 125-150 employees that did $10 million worth of business."

Howard's agreed to purchase Keeler’s inventory for $600,000 in cash, which included everything from used Group 3 wheelchairs to oxygen concentrators. The purchase didn't signify any new product lines for the company.

Founded in 2004 as a division of Howard’s Pharmacy, Howard's Medical Supply offers a full range of HME, and has locations in Yakima, Selah, Ellensburg, and Sunnyside—that last one opened last year in an underserved area.

"There's about 100,000 people down there, but there wasn't a medical supply store; they had gone out of business in 2011," said Mickelson.

This isn’t the first time Howard’s has acquired assets from his competitors:nearby Kittitas Hospital DME and Memorial DME, both hospital-based DMEs, closed their doors in 2015 and 2017, respectively. Howard's purchased Kittitas Hospital's inventory and Memorial's customer base.

While the company expects to pick up most of Keeler’s customers, Mickelson remained mum on Howard's plans for future growth. 

"We've gone from the market being over-served to under-served, so we anticipate that more companies are going to move in now," he said. "That's why we always strive to be on our A-game."

Mickelson credits part of Howard's success to the fact that the company never experienced the DME prosperity of the early 2000s. 

"And so, when everything hit the fan, we were used to running a DME in a very lean way," he said. 

And the other part? Howard's is debt-free.

"I've never heard of a company going bankrupt that did not have debt," said Mickelson.