84 Lumber closes 30 stores
84 Lumber has announced the closing of 30 stores across the country, effective April 7, due to slow housing starts and other unfavorable market conditions. Some of these units will be consolidated into larger locations, while others involve the company exiting the markets altogether.
All of the locations are owned by 84 Lumber, and the property will be sold, according to Jeff Nobers, the company’s vp-marketing and public relations.
Ten of the 30 stores operate in metro markets than can be served by a nearby “hub store.” The consolidated stores are: Visalia, Calif.; Gastonia and Apex, N.C.; Copley, Ohio; Burlington, N.J.; Saginaw, Stafford and Deer Park, Texas; Gonzales, La.; South Kansas City, Mo.
In six markets, 84 Lumber has determined that the company does not have the resources to expand its facilities and adequately serve the area, Nobers said. “We don’t have the critical mass there to do what we want to do,” he explained. The closed stores are located in Tucson, Ariz,; Forest Grove, Ore.; Meridian, Idaho; Corpus Christi, Texas; Milton, Fla.; and Gilroy, Calif.
Fourteen stores have closed due to minimal housing growth, according to Nobers. “Many of them are older stores in small markets,” he added. These locations are in Sidney, Greenville, Zanesville, and Marysville, Ohio; Ann Arbor and Flint, Mich.; New Castle, Ind.; Bluff City, Tenn.; Harrisonburg, Va.; LaFayette, N.J.; Williamstown, W.Va.; Cabot, Ark.; Kingsland, Ga.; and Albertville, Ala.
The closings and consolidations leave 84 Lumber with 368 stores and 13 component manufacturing facilities in 37 states. Several stores and assembly plants are mothballed and will be reopened when the market recovers, the company said.
This is the second round of store closures by 84 Lumber in the last two weeks. On March 24, the Eighty Four, Pa., pro dealer announced it was closing nine stores as part of a consolidation plan in six markets. The shut units were in Frederick and Seabrook, Md.; Omaha, Neb.; Covington, Ga.; Loveland, Colo.; Tampa and Sarasota, Fla. Earlier in March, the company closed its branches in Sacramento and Santa Rosa, Calif.
HIRI conference speakers say housing recovery will have to wait
Washington, D.C. The Home Improvement Research Institute (HIRI) held its spring conference in Washington, D.C., April 3, and most panel experts agreed that the housing market will continue its decline through the rest of the year before showing some modest signs of recovery in 2009.
“The housing market has not hit bottom yet,” said James Gillula, managing director of U.S. Government Consulting, Global Insight, whose presentation examined the state of the housing market and its implications for home improvement sales. “Clearly we’re looking at historic lows in total housing starts. The housing decline will be an even larger drag on the economy in 2008 than in 2007.”
Deborah Weinswig, managing director of retailing/broadlines for Citi Investment Research, said 2008 will remain challenging, as home inventory remains high, housing prices continue to be pressured, credit availability remains uncertain and overall concerns about the economy continue to inhibit spending in the home improvement sector.
“I don’t know if we will ever get back to the kind of spending we saw in home improvement products during the housing bubble,” said Weinswig, who follows Home Depot, Lowe’s and other home improvement retailers. “Instead of a consumer going out and buying a new washer or dryer, they’re going to try to fix the one they have. Instead of buying a whole new kitchen, they’ll resurface the cabinets.”
Kermit Baker, director of the remodeling futures program at the Joint Center for Housing Studies at Harvard University, spoke about the fragmentation of the remodeling industry — with the top 50 players representing just 5.2 percent of the total market. He said remodelers can do better in these difficult economic times by becoming specialized in a certain area of home improvement. “It’s very difficult for remodeling contractors to go toe-to-toe with suppliers,” he said. “You look like a bigger player if you’re servicing a niche.”
Attendee Karen Wilson, corporate marketing officer for Hyde Tools, said over the next several months she will take the information from the conference and apply it to product development, marketing, strategic planning and in sales presentations to buyers. “HIRI has a lot of aggregated and useful data for anyone in the home improvement industry,” she said. “You never know when a driving trend will become important in your segment.”
Two more Lowe’s stores announced in Toronto area
Lowe’s will further expand its presence in Canada, according to an announcement from a real estate investment firm that has entered into an agreement with the retailer.
RioCan Real Estate Investment Trust has announced two agreements to lease store sites to Lowe’s for two new stores in Whitby, Ontario, and Toronto.
Regarding the Whitby store, “Site work has already commenced, with an anticipated opening date of the Lowe’s store in early 2009,” the announcement states.
At the Toronto site, a former Wal-Mart store will be demolished to accommodate the new Lowe’s store. That store also has a planned opening date in 2009.
Lowe’s most recently opened its doors in Maple, Ontario. The retailer entered the Canadian market last year with locations in Hamilton, Ontario; Brantford, Ontario; Newmarket, Ontario; Brampton, Ontario; and Toronto.