84 Lumber is closing 20 stores in additional consolidation moves following about 80 previous store closings in the last year, the company has announced. Nine other locations were closed Sept. 30 and Oct. 6, including stores in Fultondale and Mobile, Ala., Oklahoma City, and a truss plant in Tipton, Ind.
The latest closings took place Oct. 20 and affect about 160 employees. Those in multiple store markets will be offered the opportunity to move to another store, said Jeff Nobers, vice president of marketing and corporate communications at 84 Lumber.
Extremely low housing starts brought the closure of stores in Lansing and Freemont, Mich. Lansing had 153 single-family home permits through August, while Freemont had just 69 such permits through the same period.
The Belle Vernon, Meadville, and Reading, Pa., stores will consolidate into neighboring stores in their markets. Closing the Belle Vernon yard will leave 84 Lumber with 21 stores in the greater Pittsburgh market. The Reading store's sales and service will move to Douglasville, Pa., which serves the Philadelphia market.
Other closings include Crestwood, Nicholasville, Hopkinsville, and Bowling Green, Ky., with operations moving to other stores in the market, including 84 Lumber's Louisville store.
Closings also include yards in Pennington, N.J., Greenfield, Ind., Clinton, Md., Haymarket, Va., Newburgh, N.Y., Goose Creek, S.C., Ozark, Mo., and Montgomery, Ala. The latter will not be consolidated, because of low housing permits in the market, the company said.
Yards in Newnan and operations in Dawsonville, Ga., will consolidate to reduce the store count serving the Atlanta market from six to four. The McDonough, Winder, Douglasville, and Cartersville stores and Cartersville Hub with a door shop, I-joists, and installed insulation will serve this market, the company said.
The closing of its Dublin, Calif., yard marks 84 Lumber's exit from the San Francisco Bay area. The company plans to serve the Sacramento market from an Auburn location. Modesto, Clovis, and Bakersfield will serve the California Valley, and Hesperia and Beaumont will serve the Southern California market, according to 84 Lumber.
84 Lumber ranked third on the 2008 ProSales 100 with 2007 total sales of $3.1 billion and 434 stores as of Dec. 31, 2007. Several consolidation moves made earlier this year saw the dealer dramatically cut back its store count; it now operates 335 stores in 37 states.
Not all of the news is bleak for 84 Lumber, however. In an effort to gain a larger market share, the company has beefed up numerous locations, including Annapolis, Md., and Clarksville, Del., with kitchen design centers as well as added retail and yard space. At the same time, 84 has pushed so hard into installed sales that revenues from that service grew tenfold in just two years. The dealer also opened a new 68,000 square foot branch in Beaufort, S.C., in September.
"We've expanded the stores to have a better product to show our customers," Frank Cicero, 84 Lumber executive vice president, told ProSales in an interview.
Although 84 Lumber has maintained previous kitchen design areas in other stores, including several locations in the Pittsburgh market, the Annapolis and Clarksville stores differ in that they could serve as test pilots for possible expansions at other locations, including the Charlotte, N.C., region.
Both the Annapolis and Clarksville stores have been undergoing rebuilding for the better part of 2-1/2 years that cost "in the millions," according to Jeff Nobers, 84 Lumber vice president of marketing and corporate communications. Both centers feature working appliances, and the Annapolis locations will host an outdoor kitchen and outdoor showroom by next spring.
84 Lumber also already has a strong kitchen business in the neighboring Baltimore, Md., market where it has 12 stores, three in-store kitchen designers and an area manager who oversees the kitchen program in the area. Nearly 40 salespeople also work with the department.
"There aren't as many houses being built, so if you want to increase your market share, the best thing you can do is take your existing customers and sell more product to them," Cicero says. "These were profitable stores with a great customer base. As a company, we are going to expand and spend money where we are doing well."
The dealer is also making a dramatic push into installed sales, which accounted for $20 million in sales in 2005. With 76 locations now maintaining "installed centers," Cicero says the 84 Lumber installed sales department should hit $215 million in sales by year's end. Offerings include insulation, framing, interior and exterior trim, doors, and windows.
When Building Material Holding Corp.'s SelectBuild construction services subsidiary pulled out of Florida last August, 84 Lumber wasted little time in hiring four key members from SelectBuild's Southwest division in the state. The division stretches covers the Sarasota area, down to Fort Meyers and Naples.
"We're really trying to push installed sales," Cicero says. "The more things we do, the more revenue we create."