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The Lumber Yard Announces New Business Model, Consolidations

BY Brae Canlen

Wolf Organization has announced a restructuring plan for its subsidiary, The Lumber Yard, a pro dealer serving five Mid-Atlantic States.Wolf will expand its operations in several strategic locations. But the 18-unit LBM chain will also close half of its locations that no longer fit its regional strategy.

Called “The Lumber Yard XL,” the new business model will create five “super yards” in Whitehall, Pa.; Downingtown, Pa.; York, Pa.; Hagerstown, Md.; and Winchester, Va. Each location will offer a Design Center, as well as 60 percent more inventory and 50 percent more delivery equipment than the company’s existing locations. More staff and longer hours of operation will boost service levels, allowing The Lumber Yard to offer a $100 credit if deliveries are not on time, complete and correct, according to the company.

All housing packages and installations services will come out of the super yards, which are situated near major metro markets. The XL structure will also retain four existing locations that will function as convenience lumberyards and sales offices in Carlisle, Pa.; Gettysburg, Pa.; Eldersburg, Md.; and Bel Air, Md. The company will operate a showroom at each of these locations, bringing the total number of Design Centers to nine.

Construction on the new showrooms has been underway for the past few months, and some are already completed. Wolf Organization, parent company of The Lumber Yard, will invest more than $2.5 million in developing the design centers, which should all be open by March 2008.

Expansion of the five regional yards has begun, with full operations expected by the end of 2007.

“This is a new logistical model [that] we’ve been working on for some time,” said Wolf Organization CEO Len Kopec. The Lumber Yard’s flagship location at its headquarters in York, Pa., served as the pilot, Kopec said. The new network of lumberyards will pattern itself after Wolf Distributing, a wholesale affiliate that distributes kitchen and bath products and building materials from Maine to Virginia, he added.

“At one time, it made sense to have lumberyards 15 miles apart,” said Kopec, referring to the proximity of some of the company’s locations. “But not in today’s environment, when you can concentrate your inventory, your equipment, your services and your people, and [then] move material over distances and get it to [customers] when and where they want it.”

Kopec stressed that The Lumber Yard, which sold $147 million in 2006, will continue to service the same customer base—remodelers, custom builders and regional builders—in the same geographical area: Delaware, Pennsylvania, Maryland, Virginia and West Virginia. “We’re not [reducing] our footprint,” he added.

The XL program will probably result in a reduced head count, however. Kopec also confirmed that nine existing lumberyards will be closed, and the real estate put on the market, in Newark, Del.; Charles Town and Martinsburg, W.Va.; and Chambersburg, Hershey, Reading, Warfordsburg, Waynesboro and Wilkes-Barre, Pa.

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Third-quarter earnings up at 3M

BY HBSDEALER Staff

St. Paul, Minn.-based 3M had record third-quarter sales and earnings, with earnings growth of 7.4 percent to $960 million compared with $894 million in the same period last year.

The company had net sales of $6.2 billion, up 5.8 percent from $5.86 billion last year.

George Buckley, 3M’s president, chairman and CEO, said the company saw gains across all its business segments. In consumer and office products, 3M saw sales grow 5.9 percent to $898 million compared with $848 million in the same period last year. The company’s safety and security products business saw sales rise 10.9 percent to $766 million from $691 million last year.

“The strength of the 3M portfolio was evident in the third quarter as we again generated record sales,” Buckley said. “Geographic diversity was also an important factor. We continue to accelerate investment in research and development, sales and marketing and in simplification of our supply chains.”

3M has business offices globally, with operations in other industries including industrial and transportation; health care; display and graphics; and electronics and communications.

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Weyerhaeuser to shutter three iLevel plants

BY HBSDEALER Staff

Federal Way, Wash.-based Weyerhaeuser will “indefinitely curtail” operations at three iLevel building products plants because of “slow customer demand.”

The curtailments include an oriented strand board (OSB) plant in Drayton Valley, Alberta; an OSB plant in Wawa, Ontario; and a laminated strand lumber plant in Deerwood, Minn. Work will halt at the plants before the end of the year, the company said.

“The decline in North American housing starts has reduced demand for wood products, requiring us to rationalize our supply of OSB and engineered wood,” said Steven Rogel, chairman, president and CEO of Weyerhaeuser. “We remain committed to these markets. This move enables our remaining plants to better execute our customer strategies.”

The Wawa and Drayton Valley plants are two of nine OSB mills in the Weyerhaeuser system. Wawa has an annual production capacity of 470 million square feet of OSB, while Drayton Valley has a capacity of 415 million square feet annually, the company said.

The Deerwood plant can produce six million cubic feet per year of engineered strand lumber and is one of three such plants owned by Weyerhaeuser.

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