The Top 100 delivers growth
Two-step distribution is riding a housing recovery for both LBM and hardware.
Sales gains and growth were the major themes of the HCN Top 300 Retailer and Top 200 Pro Dealer Scoreboards released earlier this year.
So it’s only logical that the HCN Top 100 Distributor Scoreboard shares in that growth, fueled by rising prices on certain products and a long awaited — though staggering and somewhat unreliable — housing market recovery.
Rising tides lift all boats. And research from the Top 100 Distributor survey shows sales gains up and down the board.
Among companies of the Top 100 that released their sales to the public, or shared them with HCN, sales rose a cumulative 9.4%.
A handful of distributors delivered 20% revenue increases — Allied Midwest Merchants, OrePac Building Products, Cedar Creek and Boise Cascade.
Topping the distribution revenue list, again, was Oak Brook, Ill.-based Ace Hardware, with fiscal year 2012 revenues of $3.709 billion, an increase of 3.6% from the previous year.
Of 35 companies sharing sales figures, 31 reported sales gains of more than 1%. And only one company reported a decline. (The full list of Top 100 Distributors ranked by sales is available online at hbsdealer.com.)
In St. Louis, national LBM distributor Huttig Building Products saw sales increase 8.7% in 2012. A strong year by any stretch, but CEO Jon Vrabely says people often ask why sales don’t mirror the 28% increase in housing starts that were recorded in 2012. The answer: All starts are not created economically equal.
Builders, many of whom have cut extensively since starts surpassed 2 million in 2005, are engaged in competition to control spending.
“Houses are smaller and product decisions are going lower-cost,” said Vrabely. “That said, if we hit 900,000 this year, that’s a heck of a lot better than 780,000 last year. It’s going to be a nice improvement.”
Particularly strong is the Pacific Northwest. In the sand states of Arizona, California and Florida, the situation is improving steadily but inconsistently. The situation in general, he said, “is choppy.”
On the operational side, two-step distributors face a real challenge in the form of labor. “What we do is not rocket science,” Vrabely said. “But hiring labor that is truly interested in finding a home in distribution and learning the business — even at the commercial driver level — that’s a challenge.”
Some of the distributors pointed to adjustments to their product mix. OrePac added Therma-Tru Doors. Building Material Distributors of Galt, Calif., acquired Master Fasteners International in 2012. Weyerhaeuser Distribution reported the adoption of composite decking and interior moldings.
And at Wolf, in addition to CEO Tom Wolf announcing a bid for the governor of Pennsylvania, the company campaigned for its new Wolf-branded cabinets, trim and decking.
Across the board, fasteners and lumber were the most distributed product category.
The sales growth seen among the nation’s distributors occurred with a relatively constant number of DCs and marginally higher head counts, according to the Top 100 survey, completed by about a third of the Top 100 field.
The number of employees reported by survey responders increased only 2.7%, yet the revenues increased 9.1%.
* indicates HCN estimate
(FCTG) indicates division of Forest City Trading Group
Labor of Luxe: High-end items for the well-heeled market
The home improvement retailing and building materials industry fared much like the rest of the country during the recession years — with the exception of those at the very top of the chain, everyone felt the squeeze. In other words, high-end customers are still looking for high-end items, with everyone else placing a high premium on value and price. Backing up that claim is a recent Harris Poll EquiTrend survey, which found that luxury brands received a nice boost in brand equity over the past year and typically fared better than their middle-of-the-road counterparts. Sources in the industry told HCN editors a similar story. With appeal remaining strong for luxury goods, here’s a quick snapshot of this relatively stable (and visually pleasing) segment.
Diamond Spas Ellipse Soaking Tub
For customers with an industrial chic design profile, this copper and stainless steel bath from Diamond Spas can be custom-sized with a flat or bowed-top ledge to fit any space requirement.
Mediterranea ICE Porcelain Tile Series
In partnership with Serenissima, an Italian-based manufacturing plant that recently announced a major factory renovation, Mediterranea has been cranking out these sleek, innovative porcelain tiles for the U.S. market and expects further growth in the years to come.
Fairway BP Standard Vinyl Railing
This vinyl railing, in special-order khaki with Square balusters, makes for a high-end option among those who place a premium on customization. Luxury customers are keen on highly individualized, distinctive products, and a custom order for this very large home means high dollar sales.
IndusParquet Wood Wall Tile
Who says walls can’t get the luxury hardwood treatment? IndusParquet, a manufacturer of Brazilian hardwood flooring, offers a wood wall tile made from 100% recycled exotic hardwood end pieces.
Every year, select brands in the home improvement and building product distribution channel are recognized for the value they bring to the industry. Accolades range from prestigious awards — including HCN’s own Golden Hammer and David Weekley’s coveted “A,A” Partner of Choice — to recognition in the press or high-profile events like the National Hardware Show. In honor of all of 2013’s high performers, here are some that are representative of this year’s batch of overachievers.
Rheem Prestige Series Condensing Tankless Water Heater
Rheem: David Weekley Partner of Choice
The heating and cooling systems manufacturer was one of this year’s newest “A,A” ranking entrants, earning an “A” for both quality and service. Rheem’s tank-type and tankless water heaters crank up the energy-efficiency standards of David Weekley’s EnergySaver homes.
RBPT’s “Awesome Products Made in the USA”
Locally made, environmentally responsible and aesthetically pleasing, Fireclay Tile was named one of Residential Building Products & Technology’s “Awesome Products Made in the USA.” The company’s products are often made from recycled materials and are handmade in San Jose, Calif.
WomenCertified Women’s Choice Awards
The universal appeal of GAF’s residential and commercial roofing products was certainly appreciated by its female customers in 2013. GAF’s client-centric business model means more attention to customers, a leading value proposition for WomenCertified.
Apex Tool Group
An Ace Hardware “Vendor of the Year”
Apex Tool Group, based in Sparks, Md., was one of seven vendors to receive a vendor award from Oak Brook, Ill.-based Ace Hardware for commitment and service during its 2013 Spring Convention in New Orleans. Representative of the company’s products is the Crescent X6 seven-piece combination wrench set with “Rapid Ratcheting” action. The packaging hammers home the functionality.
Best Product Launch Awards, Gold Award
The National Hardware Show is typically a prominent venue for new product launches, but it seems like the Grillbot was everyone’s darling this year. The automatic grill-cleaning robot — an R2D2 for the grill, as some say — wowed viewers with its innovative ease of use.
Golden Hammer Award, Plumbing Fashion and Fixtures
Moen has memorably positioned itself as the faucet one buys for looks (and life). This savvy branding didn’t fall on deaf ears at the 2013 National Hardware Show, where Moen received a Golden Hammer Award for its design and lasting value.