The HBSDealer-US LBM Q&A
After bursting onto the scene in 2010, US LBM quickly won honors as “one of the fastest-growing companies” in the building materials universe. More than five years later, it still holds that distinction.
The company has been in the headlines regularly in 2015 — mostly by making acquisitions of lumberyard companies, but also by being involved in a huge private equity deal. In late July, Kelso & Company entered an agreement to purchase a majority of the equity interests in Green Bay, Wisconsin-based US LBM Holdings. BlackEagle Partners LLC and certain members of US LBM will be investors alongside Kelso.
HBSDealer conducted the following email interview with US LBM CEO L.T. Gibson, who appeared on the cover of our Jan. 10, 2011, issue (above), along with the headline: “L.T. Gibson and US LBM Holdings are looking for growth.”
HBSDealer: In what ways will the recent deal change US LBM, make it stronger, or increase the speed with which it makes acquisitions?
Gibson: There are several reasons US LBM will be even stronger after partnering with Kelso. The more obvious, is from a balance-sheet perspective and access to new and cheaper sources of funds. The other is more similar to some of our acquisitions, where we strive to learn, get better and grow every day. Each new partner brings their own experiences and knowledge. Our team digests this input and implements the programs and ideas that help us get better, faster, more reliable, etc. I see a lot of opportunities to learn from the Kelso team as well as their other companies.
HBSDealer: What are your general thoughts on consolidations in the lumberyard industry?
Gibson: Getting bigger for the sake of getting bigger has never made sense to me. There has to be a compelling reason the two companies will benefit from being together versus apart. As long as that's the case, I think these consolidations have the opportunity to be successful.
HBSDealer: Will the industry be highly fragmented for a long, long time?
Gibson: I believe the pace of change in our industry will only increase. Those focused on the right things will succeed regardless of model or size.
HBSDealer: Should the independent lumberyard be concerned by major mergers in the LBM industry?
Gibson: There are advantages to both models, the independents versus national companies. As long as you understand your strengths and are the best in your local market, you have a future.
HBSDealer: There are a lot of companies on acquisition streaks in the LBM industry. How is US LBM going about it differently (and more successfully) than others?
Gibson: We are very disciplined in our approach. We want companies that are the best at what they do, companies that make us stronger and we can benefit each other. We love product and customer diversity, innovation, game changers, dreamers, teams that want to be the best at what they do. When we find the right partners, we have proven we can do some amazing things together because we ignore politics and the old top-down structure. We want to push the envelope to see how fast we can grow or how good we can get and how fast we can get there.
HBSDealer: To what degree would you agree that the key to growth is combining the best of the independent with the buying power of the national company?
Gibson: Our model is simply how to get the most out of each opportunity. Much is local and some is national. If you can remove the fears of trying to have a one-size-fits-all model and really focus on just getting better, it can be very powerful. That's what we are about. We take the best practices and share them across our group while keeping a local feel and leveraging the size and scale benefit. While it sounds simple, and can be, you have to create a culture where those ideas can thrive without changing the things that have made each of our group so successful over the years.
Readers Respond: Overtime-pay rules
A recent proposal by the U.S. Department of Labor calls for a significant change in the employee-employer relationship.
Under the proposal, salaried employees making less than $50,440 per year would be eligible for overtime pay. The current trigger is $23,660 — if they make more than that, they aren’t eligible for overtime.
The $23,660 threshold hasn’t changed much since 1975. The proposal faces strong opposition from retailers. What do you think? Take the poll here.
NRF’s new playbook offers holiday help
Retailers will reveal their 2015 holiday strategies in the weeks ahead and as they do so the National Retail Federation is offering a powerful new resource filled with industry best practices to benchmark against for this year and beyond.
The newly released document is called the 2015 Holiday Planning Playbook and was compiled by top retailers over the course of the past year who served on various NRF councils focused on retail industry disciplines.
“NRF is in the business of serving retailers large and small, on and offline, and given the importance of the holiday season to all retailers, we thought it necessary to provide even more resources as it relates to the biggest, and most wonderful time of the year,” said Vicki Cantrell, senior vice president of communities and executive director of Shop.org. “ The Retail Holiday Playbook offers important lessons learned as well as useful insights from retail leaders. Given that every facet of a retail company, including the e-commerce and digital teams and even loss prevention and supply chain side of the house, has a stake in the holiday season, we felt it imperative to offer this unique look at the holidays as it relates to retailers year-round efforts.”
By early September, most retailers 2015 holiday plans are well established as they’ve been in the making for nearly eight months by this time, the Playbook highlights some do’s and don’ts for this season, and also serves as a valuable benchmarking tool to understand how leading operators are thinking about key industry challenges.
“The inaugural NRF 2015 Retail Holiday Planning Playbook builds on input that each of our councils – CIO, CMO, Loss Prevention, Shop.org and Supply Chain – provided in January while the 2014 holiday season was still top of mind,” according to an open letter to the retail industry signed by Rosamari Sostillio, chair of NRF’s loss prevention committee and SVP of asset protection and Shop.org chair Peter Cobb, co-founder and EVP of marketing for eBags. Others signing the letter included Strategic Supply Chain Council Larry Bergman, director of supply chain and operations at Boscov’s, Chief Marketing Officer Council chair Kathy Thomas, chief strategy officer with Half Price Books and Chief Information Officer Council chair, Janet Sherlock, SVP and CIO with Carter’s
“NRF asked two questions: what do you plan to do differently for the 2015 holiday season and what do you expect to invest in this year to that end?”
Accordingly, information contained in the Playbook focuses on topics such as:
• How are retailers thinking about supply chain issues, such as port management and working with shipping partners?
• What role will search, email and social media play in the marketing and promotion mix?
• How are CIOs, CMOs and digital executives thinking about the customer’s in-store shopping experience and how will online information influence those in-store sales?
• Which investments are retailers making this year in omnichannel fulfillment options?
• What steps are loss prevention executives taking to protect customers, staff and products?
To download the Playbook click here.