ABC-Bradco Supply a done deal
ABC Supply has finalized its purchase of Bradco Supply Co., adding 129 locations in 30 states to its company. This acquisition makes ABC Supply the LBM industry’s largest pro dealer by sales, with annual revenues of more than $4 billion and 479 locations in 44 states and the District of Columbia.
Both ABC Supply, based in Beloit, Wis., and Bradco, headquartered in Avenel, N.J., are distributors of roofing, siding, windows and other exterior building products
“We are working hard to ensure a smooth transition for our associates and customers alike,” said David Luck, ABC Supply’s president and CEO. “We are looking forward to sharing ABC Supply’s residential strength with Bradco and having Bradco share its commercial strength with ABC Supply. We believe that the combined company gives us a more balanced product and service offering for our customers.”
Consumer Confidence down in June
After gains for the past three months, the Consumer Confidence Index declined sharply in June.
The Index now stands at 59.7 (1985=100), down from a revised May number of 62.7. The Present Situation Index decreased to 25.5 from 29.8. The Expectations Index declined to 71.2 from 84.6 last month.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for the Conference Board by TNS. TNS is the world’s largest custom research company. The cutoff date for June’s preliminary results was June 22.
“Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence,” said Lynn Franco, director of the Conference Board Consumer Research Center. “Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Consumers’ assessment of current-day conditions was less favorable in June. Those saying conditions are “good” decreased to 8% from 9.7%, while those saying business conditions are “bad” increased to 42.4% from 39.5%. Consumers’ appraisal of the labor market was also in decline. Those anticipating more jobs decreased to 16% from 20.2%, while those anticipating fewer jobs increased to 20.8% from 17.8%.
Cautiously, Lowe’s chief looks ahead
What’s it going to take for a robust recovery in the home improvement industry? According to Lowe’s CEO Robert Nibllock, two things — home prices must bottom and the job market must improve. When is that likely to happen? Next year, “in all likelihood,” he said.
Niblock made his remarks at the recent Jefferies & Co. Global Consumer Conference in Nantucket, Mass., where he told investors that the company is beginning to see some encouraging signs. Not only did the first quarter present the first positive comp-store number in 15 quarters, he also pointed out that 21 of the company’s 23 regions had positive comps. Gulf coast regions facing difficult comparisons with quarters bolstered by hurricane-related spending were the only exceptions, he said.
The second quarter of 2010, however, won’t have the twin benefits of Cash for Appliances program or the home buyer tax credit, which expired April 30. And one other thing: The first quarter had ideal weather for home improvement retailing.
“We still think that there’s some headwinds out there that make us cautiously optimistic as we look over the balance of the year. Particularly, we think consumers are closely monitoring housing value trends, as well as the employment landscape,” Niblock said.
Niblock and his team have been studying consumer patterns very carefully in this year of transition, and the overall picture looks better than last year. “We think overall, as we look out into the future, consumers are less cautious than they were previously for the U.S. economic outlook,” he said. “I think they believe that the worst of the financial crisis and the impact of the recession that we’ve been through is behind them, but they still know that we’re not out of the woods yet.”
Cost containment will play a major role in the success of the company during the transition year — and the company’s new (rolled out in the third quarter) Facilities Servie Associate (FSA) positions are designed to provide an in-house alternative to outsourced facility management. “We decided that by hiring our own dedicated person, doing it in-house versus outsourcing it on a contract basis, we could get better executing, quicker response to issues that take place and ultimately a lower cost.”
Next year, the company intends to reap benefits from what it calls its Integrated Planning and Execution (IP&E) — enhanced product assortment and replenishment systems, “to make sure that we improve our local assortments and make very sure that we have the right product in the right market at the right time.”