84 Lumber sells property to REITs, keeps stores open
An article in the Buffalo News reported that 84 Lumber has sold several properties in New York State in lease-back arrangements that will allow the pro dealer to raise cash and continue to operate its existing lumberyards.
Hardy Management Co. has recently sold a location in Wheatfield, N.Y., to Spirit SPE Portfolio 2007-2 LLC, an entity owned by Spirit Finance Corp. of Scottsdale, Ariz., for $560,000, the newspaper reported. Spirit also paid $640,000 for a property in the town of Tonawanda on Military Road, and $900,000 for the Taylor Road store in Orchard Park.
In late April 2007, Spirit, an REIT that says it focuses on "single-tenant, operationally essential real estate," conducted a lease-back deal with 84 Lumber that involved 53 stores and one truss plant. Spirit purchased the property for $200 million, and a subsidiary of 84 Lumber signed an initial 20-year lease for the properties.
GAF upgrades warranty on all laminated shingles
Wayne, N.J.-based GAF Materials Corp, the roofing and ventilation giant, is announcing improvements to its laminated shingle warranties.
Effective January 1, 2011, every GAF laminated shingle, including all Timberline shingles will be covered by a lifetime limited warranty when installed on single family residences. GAF will no longer offer any laminated shingles with just a 30-year or 40-year warranty, a first for any roofing manufacturer.
GAF pointed to its Advanced Protection technology as the basis for its lifetime warranties.
“As a company, we are committed to advanced quality, industry-leading expertise, and solutions that make our customers’ lives simple — which is what this warranty upgrade is all about,” stated Bob Tafaro, President and CEO of GAF. “Contractors will benefit from knowing that they can stand with confidence behind every installation of GAF laminated shingles. Homeowners will benefit from knowing that their installed shingles are warranted for a lifetime, adding significant value to their home."
GAF has also upgraded the coverage of its Golden Pledge and System Plus limited warranties, which are offered exclusively by its GAF-certified contractors.
GAF is celebrating its 125th anniversary as a company in 2011.
Complete details about these changes, including certificates confirming coverage and explaining the new terms which contractors can use with homeowners, can be found on its corporate web site.
For Wolf, the evolution continues
York, Pa.-based Wolf — formerly known as Wolf Distributing Co. — has been through more than its fair share of game-changing transformations since Adam Wolf founded the company in 1843. One of the biggest was the brainchild of Adam’s son, who literally bet the house — and the canal-and-barge-centric business — on the future of what was then a newfangled communication system called the railroad.
The company’s current chairman and CEO, Tom Wolf, lives in the same house his great-great-grandfather built by the tracks (in a town called Mount Wolf). But that doesn’t mean Wolf is set in tradition. The head of the $200 million company is spearheading its latest transformation — from a two-step distribution model to something he calls “a breed apart.”
In his “New Declaration for Independents,” Wolf wrote that the two-step model served Wolf well over the years, but it forced them to serve two masters: manufacturers and dealers. The new Wolf serves only one, he said: the dealer.
Home Channel News talked to Wolf about the company’s new strategy.
Home Channel News: Is there a recognized term for your new business model? Can we call it a “modified two-stepper?”
Tom Wolf: We’re referring to ourselves as more of a sourcing company.
HCN: Can you elaborate on that?
Wolf: The contrast we draw is between a two-step distribution model where you take products that are manufactured by a branded company and then go to the dealer market and sell those same products to those customers. And the issue there really is that you have two sets of customers. We want to be in a position to cater unambiguously to our dealer customers. So if they say they need this and we agree with that need, then we can go out and source that from a company that’s willing to make it. We’re big enough to be able to interest manufacturers to do that. So we want to take that unique size capability — the capability that comes because of our size — and translate that into a real responsiveness to the needs of our dealer customers.
HCN: How radical is this approach?
Wolf: The model has been around a long time; it just hasn’t been — at least I haven’t seen it — within our industry. If you look at basically what Dell Computers does, Dell doesn’t really manufacture, they source things from all over the world. I think some of the big retail firms [like] Costco obviously [do] that. So, we’re basically taking our scale, our size, and translating that into an ability to source products that we see that our customers actually want.
HCN: Is this going to require a change in the skill set of your people top to bottom?
Wolf: We’ve added people. And we will accent probably different skill sets. We actually have been doing private label for some time now. We have a private label in hardware. We do private labeling of vanity tops. We’ve done that for maybe 10 years now. We have a private-label kitchen cabinet that we’ve been selling for a couple of years, the Europa line. So we already have the capacity to do that, and we’re going to do more of it. The extent that we do more of it would probably [involve] reorienting some of our staff to do that rather than simply purchase material that’s out there on the market.
HCN: What’s your biggest product category?
Wolf: Kitchen cabinets.
HCN: Do you see that changing?
Wolf: I would think we might see in the next year or two a slight increase in building product sales. But it will probably be fairly equal.
HCN: You’re eyeing the Midwest for expansion. What are the challenges there to overcome?
Wolf: Well, the first barrier for a traditional two-step distributor to move is: Your vendor may or may not be interested in giving you that territory. They have other relationships, so one of the things with going with our own products is it frees us to make our own decisions on expansion. So if we’re beyond the constraint of our vendors’ inclinations on that, then we’re left with the relationships that are already in place. Are the products that we’re selling competitive and relevant to the market? How fast can we find good employees and good facilities? That kind of thing. But that’s something that I think would be a lot easier than trying to convince a recalcitrant vendor to give us a new territory.
HCN: It’s difficult to make changes to any business. What’s the secret?
Wolf: The reason we’ve lasted 167 years is because we’ve made changes, and I think this is along those lines. A lot of times people say “167 years — you obviously [have done] things the same way for all that time.” Well, actually, the reason we’ve been around that long is because every once in a while we’ve blown up the model and reoriented ourselves, and that’s what we’re doing here. e