A number of LBM dealers and distributors are choosing to no longer participate in the commodity pricing scuffle, trading margins for volume, and BlueLinx is apparently one of them. At its Aug. 4 second-quarter earnings conference, company president and CEO George Judd admitted that the Atlanta distributor “passed on some business” on the structural side — which takes in lumber, plywood and panels — because the margins were too poor to make a profit.
“We don’t want to grow our volume in a declining price environment,” Judd said. “We could have taken a lot more business. That business was out there and we didn’t take it, and I view that as [market] share erosion.”
But, he added, “Somebody took it.”
“One of the things that I continue to be surprised at is the staying power for many of our competitors,” said Doug Goforth, senior VP and CFO, responding to an analyst’s question. “It’s tough out there. And all the competitors are fighting over a much smaller pie.”
BlueLinx’s current strategy is to target specialty building products. “We’re pressing our margin, and that is also why earlier last year we talked about special targeted programs, special customers and specialty products that we’re focused on,” Goforth said. “It’s not everything. It’s the areas where we think there are opportunities for BlueLinx to gain share at acceptable margins. And that is where we have dedicated our resources. It’s where we’re showing our results.”