Walking the aisles at Bankston Lumber
Chuck Bankston, the fourth-generation owner of Bankston Lumber and the incoming chairman of the National Lumber and Building Material Dealers Association (NLBMDA) stands beneath a sign in the yard’s main warehouse in Barnesville, Ga.
The sign reads: “If you’re not having fun, you’re fired.”
It’s a far cry from Six Sigma management principles, but the sentiment on the sign fits Bankston’s personality, and it’s one of a handful of unconventional yet rock-solid-successful approaches to the business for his single-unit, central Georgia lumberyard.
“I’m not a micro-manager,” Bankston said. “It’s more important to me to empower people in their jobs. And I’m more focused on balancing family and business.”
Case in point: The yard is closed on Sundays. And Saturdays, too.
Whatever he’s doing, the style seems to be working. The debt-free building products company has never had an unprofitable year since its founding in 1929, even through a lingering construction downturn has challenged the business. The January-through-June building permit numbers in the four surrounding counties combined falls short of 100. (Bankston Lumber’s home county of Lamar had a meager eight permits issued during that period.)
That’s why remodeling projects play a big role in the company’s revenue stream. And the Bankston’s two outside salespeople have drummed up business where they can — pool houses, for instance — while staying close to the county administrators for tips on new construction.
And the yard is willing to travel for business. The yard supplies materials to contractors engaged in the booming Robins Air Force Base, some 50 miles away. Bankston Lumber also supplies materials to the student housing at Barnesville’s own Gordon College.
One of the biggest recent transformations is next door at the new truss division; Bankston Lumber entered the truss business in 2007 and had a strong rookie year. But the lack of new construction took its toll, pushing the division to a low point in 2009. “We were wondering if we made the right decision,” Bankston said.
But the truss business rebounded with a 26% increase in 2011. And during a recent visit, the covered but open-air facility was humming with activity.
Eric Evans leads the Bankston Truss division, which came into being when Banskston purchased Evans’ former company, Custom Truss. An Alpine computerized saw is at the heart of the operation, cutting sticks to exact lengths, which are assembled on two massive wooden slabs. Finishing the job is a giant press that rolls along rails elevated a few feet above the ground. (The elevated rails are an idea drawn up by Evans, and imitated elsewhere, Bankston said.)
The company was founded in 1929 by Chuck’s great grandfather Ed Bankston, who ran a portable sawmill operation, buying land, clearing it, in some cases selling it and some cases keeping it. The business transformed into a full production mill in the 1940s, then a lumberyard. During the 1970s, the lumberyard was decidedly DIY-focused, as an Ace Home Center, but refocused on the pro in the 1980s.
But a family business is more than a collection of business decisions and earnings statements. And the Bankston family has collected some classic stories over the generations from Ed to Pete to Cary to Chuck to 17-year-old Chad, the fifth generation of Bankstons to work at the yard.
Cary Bankston, Chuck’s father, remembers decades ago when a supplier tried to sell a new window concept to one Bankston Lumbers buyer named Elmo. The pitch went on for 20 minutes within earshot of founder Ed. When the pitch finally concluded, Ed lifted his hat above his eyes and drawled: “Elmo, don’t put anything in stock that takes that long to sell.”
“It’s good advice — I wish I had heeded it more,” Cary said.
Chuck Bankston’s own history is part of the family lore. As a small boy, he played in the yard and climbed the wooden racks. At 11, he was already sweeping floors. And at 15, he was delivering lumber, even though 16 was the minimum age to drive a car.
“We knew the sheriff,” Bankston explained.
After a brief stint with State Farm Insurance, he returned to the family business in 1992, becoming the yard’s first outside salesman, with pockets full of quarters to call in orders — more than a million dollars’ worth in his first year.
On the merchandise front, the business has embraced more energy-saving home products, some of which Bankston tests in his own home, including the Ecosmart electric water heater and Enerflex Radiant Barrier insulation.
Bankston Lumber has held lunch-and-learns with property managers and contractors and plumbers to promote products, and he’s sold about one tankless heater per week for the past three years.
Marvin windows and Masonite doors have a strong presence in a small showroom near the counter.
Bankston is a big believer in the power of networking through both the NLBMDA (see sidebar) and the Tyrone, Ga.-based Construction Suppliers Association (CSA), the trade association for independent dealers in Georgia and Alabama. Bankston calls the CSA roundtable events extremely rewarding.
“The meetings help sharpen the sword,” he said. “We can ask the guy who is leading the pack how he does it, and I get a lot out of it.”
Sometimes it’s more than he expected.
When Bankston hosted a CSA roundtable group in Barnesville, the group toured the yard and then met in a conference room to discuss the topic of security.
“They asked me how secure we were, and I told them that the fencing around the perimeter was adequate and that the merchandise in the store was pretty well protected because it was so close to the registers and all the people near the front desk. And then one of the dealers threw a big Bostitch nail gun on the desk and said: “So you’re saying we couldn’t steal this?”
“One of them had taken it in broad daylight,” Bankston said. “That was an eye opener.”
It also shows the power of a new pair of eyes on operations. “They are going to tell you how it is, which is what you want.”
Grills, by the numbers
During the 12 months from June 2011 through May 2012, dollar sales of barbecue grills increased to $1.390 billion, up 1.2% from the previous year, according to Port Washington, N.Y.-based NPD Group. The company’s consumer research shows unit volume increased even more — up 6.7%. The consumer panel shows hardware stores losing dollar share to warehouse home centers and unit share to mass merchants.
Gas grills lead the category, but charcoal grills are heating up, compared with the year-ago figures, accounting for about one-third of all grills sold. And while the majority of grills are built on carts, the fixed and tabletop variety are gaining share.
Based on the data gathered by NPD Group’s consumer panel, the typical grill purchaser is most likely to be 18 to 34 years old, live in the South and earn $15,000 to $30,000 per year.
The trio of price, brand and features are leading purchase motivators for grills, but the importance of sales and promotions as a purchase motivator is heating up.
Methodology: NPD data are based on monthly tracking of more than 30 home improvement-related categories and 30,000 opt-in consumers.
*2012 data reflects the period June 2011 through May 2012.
**Key: WHC: warehouse home center; MM: mass merchant; DS: department store;
SS: specialty store; HS: hardware store
*** More than one answer accepted
Florida: Has the tide turned in the Sunshine State?
Housing economists, reading the tea leaves of recent building permits and home sales, are not yet ready to say, “It’s over.” But certain states are definitely showing a pick-up in business at both the builder and LBM supplier level. They say one of these states, surprisingly, is Florida.
Florida paid dearly for the housing units it reaped during the boom years. Florida is one of the four sand states (along with Arizona, California and Nevada) that accounted for 19 of the top 20 metro foreclosure rates in fiscal 2010, according to RealtyTrac, an online marketplace of foreclosed properties. Many of these are tied up in litigation in a case currently before the Florida Supreme Court, and banks are more reluctant now to initiate foreclosures.
“The numbers are declining significantly,” said Lesley Deutch, a VP at John Burns Real Estate Consulting. Her firm surveys builders around the country on a monthly basis about their unsold finished homes. “In the better markets, they’ve gone through the [backlog] and they’re building new homes.”
Builders are buying lots and land in order to position themselves for future growth, Deutch said. And the price of finished lots in Florida is rising. Demand from homeowners is also picking up, and not just for moderately priced homes. The Naples market had a “fantastic spring selling season” that also included active adult communities and luxury golf course projects, according to Deutch.
And if you find it hard to believe that prospective home buyers were camping out the night before a community’s grand opening, Deutch saw it with her own eyes in Naples, Fla. “They wanted to secure the best lot locations,” she explained. Also, the regional builder, GL Homes, has a good reputation in south Florida. Lastly, “[Buyers] realize that prices aren’t declining anymore, so it’s time to jump off the fence,” Deutch added.
Statistics from the Florida Realtors Association tell the same story. Pending sales increased 31% for single-family homes and 22.5% for townhouse-condo properties in June 2012 compared with June 2011, according to the trade group. Sales that closed on single-family homes rose 5.3% in the same time period.
The previous month was better. Pending sales in May increased 43.1% for single-family homes and 33.4 % for townhouse-condo properties. More importantly, the year-to-date figures showed a 19.3% rise in pending sales of single-family houses for 2012 and a 2.3% rise in closed sales.
To a realtor, there’s a big difference between the words “pending” and “closed.” But to a building materials seller, the most important thing is that houses are being framed in new developments and doors and windows, and cabinets are being purchased. Most Florida pro dealers interviewed — although not all — felt optimistic about the future, given their recent sales volumes.
Al Bavry, owner of Kimal Lumber in Nokomis, Fla., told Home Channel News his three-unit LBM chain is running 34% ahead of last year’s sales and 17% ahead of budget. His customers, a mix of high-end remodelers and custom builders on Florida’s West Coast, have become busy this year.
“In Sarasota, [buyers are] gobbling up these 40-, 50- and 60-year-old homes and putting a lot of money into them,” Bavry said. North of Sarasota, a 2,000-acre development, called Lakewood Ranch, is under construction, with a commercial mall and homes in the $600,000 to $700,000 price range.
“A high percentage of these [mortgages] are cash deals,” Bavry observed. “Very little banks are involved.”
Some of these deals are offshore investors or wealthy foreigners who would like a Florida getaway in Orlando or Miami. Others are retirees who cashed out their previous homes. Whoever they are, when they move into existing homes, they like to remodel. These are the customers Bavry targeted three years ago when the new-homes market went cold.
“I decided not to reduce my sales staff. Instead we developed new accounts and targeted the niche (custom builder) and high-end remodeler,” he said.
Kimal doesn’t serve many production builders, but there’s plenty of national chains in Florida — ProBuild, 84 Lumber and Builders FirstSource, to name a few — in position to partner with the big boys.
“D.R. Horton will go into an [unfinished] subdivision that stopped cold and buy 10 or 15 lots,” observed one pro dealer. “The next thing you now, they have roofs going up.”
Statistics from the U.S. Commerce Department show a definite uptick. In May 2012, single-unit housing permits in Florida were up 27.3%. Year-to-date, the number is 28.4%.
But as everyone knows, this recovery is a bumpy ride, and the train could derail for any number of reasons. Deutch, the John Burns analyst, worries about a prolonged period of high unemployment rates or job losses in Florida. “Monitor the Florida economy carefully,” she warned investors.
Don Magruder, CEO of Ro-Mac Lumber & Supply in Leesburg, Fla., is closely watching the outcome of the November elections. “People are still spooked” about the economy, Magruder said. Although he also deals with all-cash customers, bad appraisals are still a problem. “Only the stripped-down homes get appraised properly,” he said. Upgrades such as granite countertops or oak flooring don’t seem to add much value.
But Ro-Mac Lumber, which operates four locations in central Florida, has seen some improvements this spring. The foreclosed homes remaining on the market are a “disaster,” Magruder said, and overall, housing inventory is low. Residential building has picked up, but this pro dealer is more cautious than optimistic.
“We’ve been through two or three springs where it looked like things were going to improve and then there was a pull-back,” Magruder recalled. In fact, he observed, “In the last four weeks, it’s cooled off for us.”