Officials in Loomis, Calif., don't want to lose Homewood Lumber, whose taxes account for about 9% of that town's annual general fund. So they support Homewood's plan to relocate its yard–at a cost to the dealer of between $5 million and $6 million–to a nearby 8.8-acre site on which this pro dealer would construct 38,800 square feet of covered space that includes a door shop, a warehouse, and Homewood's offices. Less enthusiastic, though, are some local homeowners who don't want to live near a lumberyard.
"This is reality today," says Homewood president Hamid Noorani, who has been through several public hearings. "The challenge of relocating something this size that has more character is to convey that we're not going to be an old, dirty lumberyard." He's reasonably confident the project will ultimately be approved, but groundbreaking for the yard is still several months away.
More Room, More Sales
Even under ideal circumstances, yard relocation is an expensive and lengthy exercise, which is why most dealers move only out of necessity. Hills Flat Lumber, which has been in Grass Valley, Calif., since 1921, started thinking about relocating three years ago after it lost several parking spaces and one of its exits to the construction of a roundabout at a nearby freeway off-ramp. Hills Flat needed breathing room anyway, as it was handling 350 to 480 transactions per day out of a yard with only 20 parking spots. So on April 1, it moved into a new location on more than 5 acres that includes a 30,500-square-foot showroom (from 4,000 square feet at its old yard), 14,400 square feet of office space (from 1,000), 168 parking slots, and 40,000 square feet of covered area (from 10,000) under which all of its lumber is stored.
Lampert Yards of St. Paul, Minn., has relocated three yards over the past two years, each time because the older yard had reached its sales capacity, says COO Bob Egan. When Lampert moved its 2-acre yard in North Branch, Minn., to a 7-acre location, it expanded its cabinet department and added a rental center. Lampert spends $2 million to $4 million per relocation, and expects its new digs to generate 20% to 40% more business in its first year.
In May, Sparr Building and Farm Supply moved its branch in Wildwood, Fla.–a 4,000-square-foot store on 10 acres–to a 30-acre site with 80,000 square feet under roof, including a 30,000-square-foot retail store, 30,000-square-foot warehouse with eight bays, and a drive-through lumberyard. When asked how much this relocation costs, Sparr's co-owner Sam Howard laughs. "I wouldn't be able to sleep at night if I said that number out loud." Still, the expense will be worth it if, as Howard predicts, the new location produces half of Sparr's total annual revenue (it operates two other yards) after its first year.
Accepting a Helping Hand
Dealers say relocations are preferable to remodels because they offer a cleaner slate, especially if design improvements lead to a more-efficient flow of products and customers (see "Five Relocation Tips," page 52). Several dealers contacted for this article say they are installing lumber Auto-Stak systems for the first time in their new locations. Egan adds that "you can pick up real labor efficiencies" by moving into a larger yard that's organized so it doesn't require more employees.
On March 3, True Value Home Center in Oakhurst, Calif., officially held the grand opening for a 30,000-square-foot retail store that it relocated from a 15-year-old, 11,000-square-foot store in a strip mall. But True Value developed only half of this 6-acre site because it's zoned for retail hardware and needed a variance for an outside lumberyard. "The wheels are in motion for that," says general manager Alan Bryant, who's playing beat the clock to get that yard up before houses start being built on land behind the store that's earmarked for residential development.
Experts say dealers need consultants who can anticipate such obstacles. Rick Hogue, vice president of marketing for Indianapolis-based Krauter Storage Systems, which provides store design, architectural, engineering, and planning services for rack-supported buildings, explains that dealers often aren't familiar enough with building codes to know, for example, when retention ponds are required for yards or that enclosed structures larger than 12,000 square feet need sprinkler systems.
Many pro dealers also turn to their buying groups to guide them through relocations. (Krauter has a strategic alliance with Ace Hardware Corp.) The day after Triple-A Building Center acquired a competitor's location in Messina, N.Y., Do it Best's retail development rep, Al Hall, was on the scene. One week later, the co-op's store design consultant, Mike Robertson, arrived. By relocating onto that 10-acre location, which had a 40,000-square-foot store, Triple-A was able to expand its home décor and flooring departments and increase its kitchen department tenfold, says owner Robert Ashley, who spent $550,000 remodeling that store.
The role co-ops and other suppliers play in dealers' relocations has made transporting inventory painless. Sparr planned to start stocking its new location in Wildwood about a week before its May 21 soft opening, and vendors volunteered to place tractor trailers filled with merchandise on premises to abet that effort.
–John Caulfield is a contributing editor for ProSales.