CORRECTED In depth: A sharper focus for BMHC
[Corrects the first paragraph purchase price] BMC West has pulled out of the western Colorado market, selling its distribution yards in Aspen, Steamboat Springs and Glenwood Springs to a local dealer with two locations. Harbert Lumber, headquartered in Grand Junction,purchased the three locations through its affiliate, West Canyon Investments. The transaction includes a lease in Aspen and real estate assets in Steamboat Springs and Glenwood Springs. The sales price for the three units was $11.4 million.
Robert Mellor, BMHC’s chairman, president and CEO, explained that the company is shifting away from retail-oriented operations in favor of value-added products and services, including manufacturing and the installation of millwork and structural components.
“We remain focused on ensuring our operating facilities are optimally located and provide the right range of professionally oriented products and services to drive growth and operating efficiencies,” Mellor said. “In a number of instances, this has entailed a shift away from more retail-oriented operations like those located in Aspen and Steamboat Springs. Strategically, this transaction will allow us to concentrate our efforts and resources on expanding in markets that align with our long-term growth plans.”
Earlier this year, BMHC combined some of its facilities and delivery functions in the Denver metro area. Company CFO Bill Smartt told analysts on July 26 to expect even more consolidation.
“We will take advantage of every opportunity we have to consolidate facilities at BMC West,” Smartt said during a conference call.
Ironically, BMC West was the company’s star performer during its second fiscal quarter, gaining market share and protecting its margins despite declines in building permits and lumber prices. BMHC credited the division’s customer base of local and regional builders and remodelers. BMC West tends to serve smaller markets and is not as dependent on production builders as SelectBuild, BMHC’s construction services division.
The Western Slope region of Colorado is dominated by custom builders, particularly Aspen and Steamboat Springs, where the cost of a home easily runs into seven figures. Remodeling jobs also tend to be high end, given the wealthy demographics.
Pro-Build’s Home Lumber serves the area, as does Alpine Lumber, a 15-unit chain that had $189 million in sales last year. BMHC chose to sell its three yards, which generated $40 million in sales in 2006, to Harbert Lumber, a family-owned operation with a lumberyard in Grand Junction and a smaller location in Edwards, Colo. The third generation owners did $16.5 million in sales in 2006, according to Chain Store Guide, a sister publication to Home Channel News. The company also operates a truss plant, an installation division and a door shop.
Fiber Composites completes purchase of L-P business
Decking, railing and fencing company Fiber Composites has completed its purchase of Louisiana-Pacific’s (L-P) WeatherBest decking and railing business. Terms of the deal were not disclosed.
The acquisition, announced in July, includes L-P’s WeatherBest brand and a manufacturing facility in Meridian, Idaho.
The 175,000-square-foot facility also will be used to manufacture Fiber Composites’ existing brands, including Fiberon, Veranda and Portico decking and railing systems.
Fiber Composites, based in New London, N.C., was founded in 1997.
Bombay Company secures financing
Bombay Company has obtained debtor-in-possession (DIP) financing for $115 million, following an earlier bankruptcy filing with the U.S. bankruptcy court in Fort Worth, Texas.
The troubled specialty home decor retailer will receive DIP financing from GE Corporate Lending and GE Canada Finance.
“We are proceeding with the restructuring plans as outlined in our filings E and we continue to operate our business as usual during this process,” said David Stewart, Bombay CEO.
In its earlier filing with the U.S. District Court, Bombay said it had $239.4 million in assets and $173.4 million in debts as of May 5.
Bombay designs, sources and markets home decor products through 384 retail outlets and an e-commerce site.