"ProBuild has been a contractor based yard from its beginning, but they can't survive on that alone," Kevin Check, owner of Kevin J. Check Designs, wrote on Dec. 30. "They have their own millwork, truss and door divisions where it doesn't have to outsource this, but they still have these options for the contractors to choose from. ... I see the biggest issue with PB is that the sales force has no real control over their markets."
Don Hylland, Tibbetts Lumber Co.: "ProBuild needs to decide if they want to be in the big box game or contractor game? Trying to do both is not wise. I also worked for the HD at one time and found their homes sales division was a mess. High sales personnel turnover and many customer complaints. The sales force really meant nothing to them."
Greg Brooks, former editor of PROSALES: "If and when ProBuild is bought, it'll be bought by equity investors and not a competitor. ... I'm having trouble seeing how ProBuild can become a formidable competitor."
"The new [private equity] buyer will be focused on driving profits over people," predicted Tony Misura, president of the Misura Group. "Denver HQ is a huge expense creating a lot of red on the P&L; under performing markets will be sold. Expect a more nimble tougher competitor coming out of the sale in the markets the decide to remain."
James E. Jurey, a building account manager at Buck Lumber, said, "I guess it depends on who buys them. I think we are just now seeing the turning of the Myrick philosophy of getting the sale at all cost. That philosophy of "buying" business and hoping in return that you put your competition out of business not only backfired, but I believe it hurt the profitability of the industry as a whole. With the changing of the guard there is still a certain amount of time required for those types of waves to diminish."
"The Lanoga model was the envy of the industry," said business consultant and former ProBuild senior vice president Frank Perry. "Why Fidelity messed with success will never be understood. Now it appears what goes around comes around. From decentralized to centralized back to decentralized. Hopefully new owenership will finally see the light on how to run a nation wide organization without an 800 plus employee home office."
Former ProBuild employee Mark Gieseke said: "When I worked for UBC, they were starting to change how I could take care of my customers, by only selling certain product lines. ProBuild just increased the pressure or demanded salespeople had to follow the rules, instead of taking care of the customer, I left the company knowing it was only a matter of time that the customer base would go somewhere else to fill their needs."
Kevin Check, owner of Kevin J Check Designs remarked, "this is the same issue that took down Wohahan Lumber and they ended up closing all their locations and was replaced in some locations with Stock Lumber in WI, then became a independent company here in Wisconsin as Wisconsin Building Supply. Probuild was known in its past as UBC (United Building Centers) and changed its name to reflect the contractor based model. I worked for Wickes Lumber and we had product lines that was popular with the contractors and when it was bought out by UBC, the location that I worked at kept the brands as before instead of following the SOP of the brands that ProBuild had to keep their customers including those brands of windows, roofing, siding, insulation and tools that ProBuild had as its' standard selections. UBC ProBuild looked at this as an expansion of the company into other market areas and shuttered up the Wickes Lumber locations that they felt was not a fit into their model and haven't sold some these locations until they have a buyer come forward through their agents selling these properties. The locations have been decentralized for a length of time and purchase their inventories independent instead from a CPO. ProBuild needs leadership that is in tune with the market and perhaps being younger in bringing a new fresh approach to the business model to make it grow to a profitable level. Time will tell if a investment group takes over which usually it ends up getting liquidated to resolve the debt of the company and not finding a solution to grow the company."
Jim Enter, principal, Association of American Roundtables, sent in this comment via email: "I think the main point most people have missed is the fact ProBuild is not a chain, it is a 'collection.' There is only one chain of contractor yards, in our industry 84 Lumber. There are several key differences between chains and collections; size, customer profile, computer systems to name a few, but the most important is company culture. As collections grow larger, they add cost to control not savings from scale. I believe BFS and Stock have the same issue. I don’t believe any of them will ever be “best in class” operators or creators of profits. I think US-LBM understands this and has created a structure to overcome the associated issues."
"ProBuild will in all likelihood be sold to a private equity group and not to one of it's national competitors," said Frank Chambers, a partner at CK Solutions. "The impact of this should have very little influence on the competitive environment in the LBM community I would think. What will be more important than who the new owner is will be the willingness of that ownership to delegate decision making down to the lowest level needed to make timely and intelligent decisions that affect it's people and it's customers.
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