Citing inconsistent performance and low return on investment, 84 Lumber announced April 4 that it will pull out of the majority of its rural markets as part of an overall strategic plan to hit $10 billion in sales by the end of 2009. A total of 67 locations across 19 states will be shuttered, and the capital and human assets of those stores will be redeployed across the company's national footprint as it turns its focus entirely to higher-growth markets. Moving forward, 84 will open future locations only in markets with a minimum threshold of 3,000 annual housing starts.
“The stores we are closing are located in markets that do not come close to reaching this bottom-line housing start benchmark, are not performing to consistent levels required by our business model, and are located in no-growth or rural markets that have either matured or never reached their projected potential from a housing start perspective,” said company president Maggie Hardy Magerko in a statement.
According to the company, 84's overall unit count will still be on the upswing despite the closures, with 50 new stores set to open in 2006, 42 new locations already planned for 2007, and site review underway for an additional 20 stores to be ready for business by 2008. The company also has revealed that it plans to hire a minimum of 1,000 outside sales reps in addition to hundreds of yard professionals over the next three years as the company shoots for its growth target. Other key initiatives of the three-year plan include the expansion of component manufacturing capacity and installed sales services and a greater effort to sell to large, national production builders.
“Our goal is to continue to grow, and grow responsibly, so that we are providing long-term and stable career paths for our associates today and tomorrow,” said Hardy Magerko. “The implementation of this strategic plan will provide such an environment for continued growth for both the company and our associates.”