Demand inundates stores as Midwest floods
As the worst flooding in almost a century devastated homes and businesses across the Midwest in late March and early April, home centers and hardware stores in several states scrambled to keep up with demand for products like sump pumps, dehumidifiers and general clean-up materials.
The flooding reached across the Mississippi Valley—including parts of Illinois, Missouri and Arkansas—and into southern Indiana and northeastern Kansas. Continued rain at press time threatened to do even more damage to the lower Ohio Valley and middle Mississippi Valley.
Piedmont, Mo., became one of the nation’s hardest-hit communities in mid-March when the rising waters of Mc Kenzie Creek there swamped hundreds of homes and businesses. One of these was Turnbough Building Supply, a 49-year-old lumberyard and Ace hardware store that occupies two-and-a-half city blocks.
“My lumberyard is one block off the creek, and all seven of my warehouses were two to three feet deep in water,” said second-generation owner Jim Turnbough, who lost several hundred thousand dollars worth of merchandise—only about one-third of which was covered by insurance. Luckily, the main retail store had minimal water damage.
After being closed for two weeks, Turnbough reopened on March 31 and began trying to restock building materials. Turnbough said his suppliers—particularly Monroe, La.-based Allied Building Stores—gave him priority service and were very helpful in getting him up and running again. He expects that products like drywall and plumbing and electrical supplies will be in high demand as people try to repair their homes in the coming months.
“If we can get our inventory back together and our computer together with what we have in stock, I think business is going to be very good in this area for awhile,” he said. “We’re just taking it one step at a time, but as contractors begin to repair homes, I think it’s going to be busy all summer.”
Orgill, the Memphis, Tenn.-based distributer with hundreds of stores throughout the Midwest, has seen an increased demand for sump and utility pumps, discharge hoses and check valves. “These products are moving off the shelves quickly,” said Jeff Detrick, Orgill’s merchandise manager for plumbing. “At this point in time, vendors are keeping up with the demand, but I think it will tend to get worse as the water recedes in many of these areas and people try to clean up.”
Detrick says Orgill is expecting a high demand for cleanup products like shop vacs, floor squeegees, mops, bleach and other cleansers. Long term, he expects to see consumers in the affected areas looking for roofing materials as well. “Any time there’s extremes of weather, there are issues with roofing,” he said. “Water gets into places and freezes, causing problems.”
Detrick also expects to see increased orders for pumps and related products in the north and northeastern United States, as late-seas on snow melts in upstate New York and parts of Michigan, Ohio and Pennsylvania. “When the weather breaks up there, and they get rain on top of snow, we’re going to see pulls in those areas,” he said. “It will put us in a bad way, but we’re prepared for it. Still, it’s unpredictable.”
Jesse Peglar, sales manager at Lowe’s in the hard-hit town of Mountain Home, Ark., said his store was expecting an increased call for drywall, flooring and siding in the coming weeks. He had already sold some of these products by the end of March but said demand would increase after the water subsided. Conditions were worse in the southern part of the state, where Hardy Hardware in Hardy, Ark., was trying to keep up with an increased demand for PVC piping.
“The main thing for many of my customers is getting their plumbing fixed,” owner Byron Hewett said. “In this part of Arkansas, many of the houses are on stilts, and a lot of the plumbing broke underneath.”
Home Depot—which has a national partnership with the American Red Cross—has been helping with relief and recovery efforts in many afflicted areas. Home Depot stores are partnering with local ARC chapters to activate relief efforts, providing the ARC with cleanup items like trash bags, gloves, buckets, brooms, mops, disinfectant, drinking water and, in some instances, sand bags. “Some of the items that we are seeing an increased demand for are wet/dry vices, sump pumps and dehumidifiers,” spokeswoman Jean Niemi said.
Wal-Mart is also trying to pitch in, assessing need and helping communities on a case-by-case basis, according to Christi Davis Gallagher, a member of Wal-Mart’s corporate communications/corporate affairs department.
“While each store has the autonomy to make those decisions on their own, we have heard from several store managers on some of the ways they are helping,” Gallagher said, citing the following examples:
The store manager in Piedmont, Mo., donated around $2,000 in merchandise to the local Red Cross shelter, including a trailer of water.
The Poplar Bluff, Mo., store donated $500 in food and water to their local community.
Wal-Mart stores in southern Illinois donated approximately $1,000 to several communities.
Many Wal-Mart associates have been affected by the flooding, particularly in southeast Missouri, so the company is helping through its own Associate Disaster Relief program.
“We are also continuing to watch this situation closely, especially as the rivers crest, and we’re liaising with the Red Cross to ensure we help in whatever way we can,” Gallagher said.
Bed Bath & Beyond declines in fourth quarter
Specialty retailer Bed Bath & Beyond posted weaker fourth-quarter earnings, due in part to an extra week in last year’s fourth quarter. The company saw earnings of $172.9 million, down 16 percent from $205.8 million in the same period last year.
Net sales for the fourth quarter were $1.93 billion, down 3 percent from last year’s fourth quarter. Comparable-store sales for the fiscal fourth quarter of 2007 decreased by 0.4 percent.
For the fiscal year, which again was one week shorter than the previous fiscal year, the company saw earnings decline 5.3 percent to $562.8 million from $594.2 million a year ago.
Net sales for the year were $7.049 billion, an increase of 6.5 percent from last year. Year-over-year, comparable-store sales increased by 1 percent. The company opened 22 new stores in the fourth quarter, including its first location in Canada.
The retailer said it expects comparable-store sales to be relatively flat or negative in 2008. Bed Bath & Beyond also warned investors it expects a per-share percentage decline in 2008 earnings from the low double-digits to mid-teens.
Bed Bath & Beyond operates a total of 971 stores nationwide.
Canfor reduces production
Vancouver, B.C.-based Canfor is reducing its production volume to reflect market realities. The company pointed to “falling demand and poor pricing for softwood lumber with no indications of a market recovery in the near future.”
Canfor will be reducing workweeks at a number of its operations. In addition, Canfor’s Prince George Sawmill will move from three shifts to two and its Clear Lake finger joint operation from two shifts to one. This move will reduce Canfor’s annualized lumber production by approximately 600 million board feet.