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Sensing opportunity

BY Brae Canlen

For Carter Lumber, the building slowdown is merely a dip on a long road that started in Kent, Ohio, and led to 10 different states. The 75-year-old company sees the current housing market decline as an opening to hire talented salespeople, ramp up its installed sales division and move forward on the M&A front.

“This downturn is going to last longer than anyone would like,” suggested Jeff Donley, Carter’s senior vp and chief operating officer. “But we see it as an opportunity.”

The privately held company has repositioned itself several times over the past few decades, making an aggressive move five years ago to serve the residential builder. Carter Lumber rode this wave to $689 million in sales in 2006, placing it as No.13 on HCN’s Top 350 Pro Dealer Scoreboard.

While tract home building has cooled considerably, the bulk of Carter Lumber’s builder customers are small- to medium-sized builders who average between five and 75 houses a year. And many of them are still active in markets like Cleveland, Indianapolis, Detroit and Columbus, according to the company.

Carter Lumber continues to sell to these regional builders, finding plenty of work for its new installed sales division. Launched in 2006, the separate business unit is headed by company veteran Don Morris. Carter now offers installation services in 80 percent to 90 percent of its markets, up from 20 percent to 25 percent last year. The menu includes everything from framing to towel bars and doorknobs.

“Even in a downturn, there’s still a lot of opportunity in installed, both residential and commercial,” said Donley, adding, “Commercial jobs are the bright spots through 2008.”

While kitchen makeovers and decks might not have the same luster as restaurants and banks, the remodeling business is still a big part of the daily transactions at the pro dealer’s 216 locations. “The repair and remodeling contractor has been the bread and butter for Carter Lumber for years,” Donley said. “We never walked away from that.” Nevertheless, the company plans to put more resources into developing its over-the-shoulder trade. Expanded product assortment and more training for inside sales reps are options the company is looking at, while keeping its focus on “relationships—which mean something to these guys,” Donley said.

Carter Lumber’s plan to beef up its outside sales force has benefited from the downturn as competitors have closed or consolidated locations. “There are some good people available today who might not have been six months ago,” Donley said. “We’re investing heavily in bringing [them] on.”

The company was also able to hire a former Stock district manager to run its manufacturing division. Casey Carey joined Carter Lumber in July after 10 years with Stock Lumber and eight years at E-town Truss as general manager.

Carter Lumber is also prepared to continue its acquisition strategy, which bolted on three lumberyard operations since 2004. The latest purchase, Griggs Lumber in 2006, is located in North Carolina’s Outer Banks. Carter Lumber still has its eye on that region, along with the Florida Panhandle and Georgia.

“We’re still committed to the Midwest, but we see a lot of our growth coming from [the Southeast],” Donley explained. Without giving specifics on acquisitions, he said the company currently has “two or three on the burner.”

Neil Sackett, president, CEO, and grandson of Carter Lumber’s founder, sees the moribund housing market as a chance to re-examine everything. “It’s a time when your problems glare out at you,” he said. But 2007 is also “a time when a company can reinvest in itself,” Sackett said.

In keeping with the kind of long-term growth strategy that brought Carter Lumber to where it is today, he added: “We’re repositioning ourselves to come out of this a very strong company.”

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Lowe’s execs eye lawn care items, eco-friendly products

BY HBSDEALER Staff

Speaking at the Goldman Sachs 14th Annual Global Retailing Conference, held today in New York, Patti Price, Lowe’s general merchandise manager for outdoor living, told investors and analysts what she expects will be trends to watch in the coming months.

“Because of drought [in some regions of the country], customers will be renovating their lawns,” Price predicted. Fall cleanup products and lawn care items are being promoted in Lowe’s stores, she said.

“We’ve had some real success in our holiday programs,” Price said. “We brought in John Deere. The merchants are so focused on moving the business ahead … we’re extremely well positioned for the back half of this year.”

Larry Stone, president and COO for Lowe’s, said new products that have been popular in Lowe’s stores include eco-friendly items and composite building materials.

“Something that’s really evolving, in my opinion, is all these composite products,” Stone said. “[There are] a lot of new products that customers want to use because they’re lower priced and lower maintenance.” Those products include composite siding, shutters and solid core composite flooring, he said.

Additionally, Stone said innovations in locksets, including keyless locks, have shown increased popularity in the home improvement market.

Stone spoke further on Lowe’s overall market position in the middle of a housing downturn, saying the company was “not happy with the negative 2.6 (percent) comps that we recorded” in the second quarter. He also said the company has seen weakness in big-ticket items, installed sales and special order sales.

However, Stone was optimistic about the next few years for the nation’s second largest home improvement retailer, adding, “Lowe’s will be well-positioned, once everything turns around, for further growth in the home improvement industry.”

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Dave Heine joins BlueLinx

BY HBSDEALER Staff

BlueLinx, one of the industry’s largest building materials distributors, has hired Dave Heine, the former vp-retail development at Do it Best. BlueLinx confirmed that Heine started this week as a senior national account executive, where he will call on Do it Best accounts and other independent dealers.

“I have worked with [Heine] for over 20 years as a customer and always admired his abilities, leadership style and integrity,” said BlueLinx president and chief operating officer George Judd.

Heine, a 28-year veteran of Do it Best, left in July after serving in a number of positions that included vp-lumber and building materials, vp-building products, vp-purchasing for pro and commercial products and manager of the lumber and commodities division.

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