A more selective BlueLinx Holdings
A number of LBM dealers and distributors are choosing to no longer participate in the commodity pricing scuffle, trading margins for volume, and BlueLinx is apparently one of them. At its Aug. 4 second-quarter earnings conference, company president and CEO George Judd admitted that the Atlanta distributor “passed on some business” on the structural side — which takes in lumber, plywood and panels — because the margins were too poor to make a profit.
“We don’t want to grow our volume in a declining price environment,” Judd said. “We could have taken a lot more business. That business was out there and we didn’t take it, and I view that as [market] share erosion.”
But, he added, “Somebody took it.”
“One of the things that I continue to be surprised at is the staying power for many of our competitors,” said Doug Goforth, senior VP and CFO, responding to an analyst’s question. “It’s tough out there. And all the competitors are fighting over a much smaller pie.”
BlueLinx’s current strategy is to target specialty building products. “We’re pressing our margin, and that is also why earlier last year we talked about special targeted programs, special customers and specialty products that we’re focused on,” Goforth said. “It’s not everything. It’s the areas where we think there are opportunities for BlueLinx to gain share at acceptable margins. And that is where we have dedicated our resources. It’s where we’re showing our results.”
No comments found
Lowe’s: ‘Not pleased’ and not standing still
Lowe’s second-quarter financial report was a disappointment to the company’s executives, who made no excuses for the retailer’s poor showing. Earnings were down slightly, revenues grew by only 1.3%, and comp-store sales were essentially flat. “Even after taking into account the challenges of the macro environment, we are still not pleased with our performance this year,” said chairman and CEO Robert Niblock, speaking at an analysts’ conference call on Aug. 15.
Instead, Niblock and his executive team outlined a series of initiatives they intend to implement — or in some cases, accelerate — to address some “gaps” they’ve identified through a critical analysis undertaken earlier in 2011.“We will go to market differently beginning in the second half of this year,” Niblock said.
What exactly does this means for Lowe’s customers and vendors? The former can expect fewer promotional sales, more emphasis on “Every Day Low Pricing” and a broader assortment on Lowes.com. If the customers are Spanish speakers, they can conduct their whole e-commerce transaction in their native language on Lowe’s new Spanish website.
Customers can also get their lawn mowers, string trimmers and other outdoor power equipment repaired by Lowe’s. The North Carolina retailer just completed the rollout of this program after testing it in 100 stores and finding that customers would rather deal directly with Lowe’s than the manufacturers for repairs.
But many of the current and future changes revolve around merchandising strategies, making them harder to implement and more subtle to notice. Except by suppliers, of course.
Lowe’s is calling its new strategy “integrating planning and execution” (IPE), or putting the right product in the right store at the right quantity. A cornerstone to this process is catering to the needs of local markets. This is not a new concept in retailing — you don’t send snow blowers to Phoenix — but Lowe’s wants to peel back layers of previous merchandising habits to create an “institutional memory to maintain local assortment decisions when merchants change.” More than 80% of the merchandising teams have product line reviews in process using IPE techniques, according to the company.
Bob Gfeller, executive VP merchandising, said the line reviews “are uncovering significant consumer insights that are driving different product decisions.” For example, the IP&E process was recently used in a fashion category, with “talented people” from across Lowe’s organization acting as consumer advocates during all aspects of the product line review, from design to store experience. As a result, selection varied from store to store, as did price points, in keeping with what people expect to see in their local markets. The re-merchandised category should be ready for the fall of 2011.
This “solutions-based merchandising” approach was developed in the first half of the year, in a test store where Lowe’s removed a lot of standard racking and experimented with more open vignettes, expanded endcaps and “drop zones.” Gfeller referred to the Holy Grail of retailing — getting customers to shop across departments and buy everything they need for a remodel at once — as one motivation for the merchandise retrenching.
And although Gfeller stressed the “test and learn” approach to some of the new ideas, he also said resets from the current line reviews are now beginning and will continue throughout 2012.
Just went to my local Lowes
Just went to my local Lowes store to get an allen wrench set; none on hand. No standard, no metric, no torx. Good job!
Management shake-up at Lowe’s
Lowe’s has announced a restructuring in both in-store operations and merchandising organizations that will thin the ranks of its management and consolidate both its regions and divisions.
Lowe’s merchants have been reorganized into two product divisions, each led by a senior VP/general merchandising manager. Both will report to executive VP merchandising Robert Gfeller Jr.
Troy Dally, previously senior VP/gmm hardlines/building products, will lead the new building and outdoor products division
Clinton (Clint) Davis, previously senior VP/gmm kitchen and bath, will lead the new kitchen, bath and home decor products division
Three senior VPs have left the company. They are Theresa Anderson and Robert Wagner, previously senior VPs operations, and Patricia Price, previously senior VP/gmm home decor.
As announced in July, Eric Sowder, senior VP/gmm outdoor living, will retire from Lowe’s on Sept. 9.
The company’s U.S. store operations organization will now operate under three divisions — North, South and West. In addition, the divisional structure will be streamlined to 14 regions nationally, from 21, to ensure greater consistency and efficiency. Details regarding the new regional structure will be finalized at a later time, the company said.
Each division will be led by a senior VP operations, reporting to Rick Damron, executive VP store operations:
• William (Bill) Edwards, senior VP operations – south division (Edwards was previously senior VP – south central);
• James (Jim) Frasso, senior VP operations – north division (Frasso was previously senior VP – northeast); and
• Brent Kirby, senior VP operations – west division (Kirby was previously senior VP – north central) .
"This new organizational structure reflects the company’s future direction to better serve customers whenever and however they wish to shop with us. These leaders are well positioned to take on new and challenging roles to help lead our company forward," said Damron and Gfeller in a prepared statement. "We would also like to thank Robert, Theresa and Patti for their many years of dedication and service to Lowe’s. We wish them well in the future."
Lowe’s also said, in its announcement, that the consolidation was designed “to improve efficiencies, increase speed to market for new products and services, and enhance the shopping experience for customers.” A spokesperson for Lowe’s told Dow Jones Newswire that Damron and Gfeller have been looking at ways of streamlining the company’s operations since January 2011, when the two assumed leadership roles as executive VPs. Company president and chief operating officer Larry Stone announced his retirement that same month, on Jan. 28, after four decades at Lowe’s. By February, the company had decided to eliminate the positions of 1,700 middle managers, most of them at the store level.
No comments found