Pro dealer 84 Lumber has entered into two new five-year financing packages totaling $590 million, putting the company in a better position to work through the current U.S. housing downturn, according to an announcement. The loan arrangements were made through Sun Trust Bank and Wachovia Bank.
"This deal allows us to move forward with our business plan without earnings covenants,” said Maggie Hardy Magerko, company president and owner. "Our plan is to emerge from the housing slump debt free by eliminating unprofitable stores, reducing slow-moving inventory, increasing vendor terms, reducing overhead and improving our accounts receivable aging while focusing on increasing market share in our core markets nationwide.”
Hardy Magerko emphasized that the company would focus on eliminating unprofitable stores as a way of reducing debt. Since January, 84 Lumber has shut down 52 stores. Many of these locations were consolidated into nearby larger operations, which offer additional services, she noted. Others involved exiting a market altogether.
The company owns 85 percent of its operating locations, with a value of approximately $650 million. Additionally, the company owns inventory and receivables of approximately $500 million, according to a prepared statement. The company also noted that its sales only decreased 20 percent in 2007, while single-family housing starts declined 27 percent.