Already the seventh-fastest growing big company in South Carolina, GBS Building Supply isn’t slowing down. “Cash flow is up 107%,” president and CEO Bob Barreto notes. “When you look at the revenue trend numbers, we should do about $62 million this year.”
That works out to a 32% increase on top of this year’s 18% gain for the Greenville-based company in 2014. It’s a remarkable turnaround for a dealer that was in remarkably weak shape when Barreto arrived just four years ago.
“We’ve been growing like that since 2011 because of the way we restructured our business,” Barreto says. “We pulled out even before the market got better.”
From its base in what’s known as Upstate South Carolina, GBS’ six facilities serve customers in both Carolinas plus parts of Georgia. Barreto says that the company has succeeded in part because it’s different from its peers.
“The typical sales structure in this business—and I came from outside the industry—is that you have Store 1, Store 2, Store 3, and each has its sales force and the store manager has to do everything, including manage the sales force,” he says. “That’s usually their lowest priority. I hired a sales manager to sit over the entire sale force. All he thinks about every day is what customers are doing, what prices are doing, etc. We doubled the number of calls in about two weeks. Plus [the sales reps] had somebody to go to and get service from a sales manager immediately. They don’t have to compete for a general manager’s time.”
GBS also doubled the size of its sales staff while taking a hard look at what operations did and didn’t make money.
“We shut down the millwork shop on the fifth day and we went into sheetrock,” Barreto says. “We had 80,000 square feet of space when we moved millwork. I thought that if I could find someone who knows the business, it has to be simpler than the rest of what we’re doing; it’s 50 SKUs. I found a guy who’s an absolute genius in this business. He convinced me we could make money.” It also helps that in 2011, it still was possible to buy a used lift truck for a reasonable price.
Elsewhere, GBS is leasing rather than owning vehicles so that the age of its fleet would never exceed five years. “I used to work for Iron Mountain records,” Barreto says. “They buy ‘em new, wear ‘em out, and then sell them to guys like us who do all the maintenance.” GBS also took its showroom and turned it into a custom and high-end kitchen operation that does turnkey sales. “The margins are all up there,” he says.
The company’s growth no doubt brings smiles to the entire workforce, because 97% of the shares in GBS are held by employees.
“We are an ESOP [employee stock ownership plan] company, so we started having monthly and quarterly meetings,” Barreto says. “We started educating them on what makes the stock more valuable. We started GBS University, teaching them accounting, marketing, anything they want to learn.
“Now our truck drivers are asking ‘What if interest rates go up?’” Barreto notes. “That’s a great question to get from an employee.”