Stock Building Supply hasn't said how many more locations it plans to close as part of its revival effort, but it's becoming increasingly clear that the closures will extend far beyond the real estate it leased.
A spokesperson for America's No. 2 LBM operation confirmed today that the company would close five of its nine locations in New York State by June 30. The spokesperson also confirmed reports to ProSales that Stock would close five locations and a showroom in Texas, but declined to say where they are located.
In addition, the spokesperson confirmed a Las Vegas Sunreport today that Stock will close seven locations in the Las Vegas area.
There also are indications that Stock is pulling out of its showrooms, including one in Carrboro, N.C., that it shared with Ferguson Enterprises, the plumbing supply company owned by Britain's Plc. The Stock spokesperson said showrooms are being reviewed on a case-by-case basis.
About noon today, Stock issued this statement: "As previously disclosed, Stock Building Supply will be reducing its staff by approximately 2,000 associates in select under-performing markets. We regret having to make these cuts and understand that this is a challenging time for our associates. Nevertheless, these difficult decisions are necessary to focus on those markets with the strongest prospects for growth and to ensure Stock is well-positioned for the housing market upturn. We are committed to ensuring a smooth transition for our valued customers at these affected locations and look forward to continuing to provide high quality products and services to customers nationwide."
Wolseley owned all of Stock until May 5, when it sold 51% of the $3.2 billion sales operation to the Gores Group, a private equity firm based in Los Angeles. The next day, Stock filed for protection from creditors under Chapter 11 of the federal bankruptcy code.
In its filings, Stock said that as of May 5 it had 7,220 employees at nearly 200 locations nationwide; that's down sharply from the approximately 17,000 employees and 360 locations it had at its peak a few years before. It said in its filings that it expected as part of its Chapter 11 reorganization to drop to about 5,000 employees.
Stock also said both to the court on and its Web site that it would close branches, but it didn't say how many or where they'd be. On a Frequently Asked Questions page for Stock customers posted on May 6, the company states: "We will be exiting or reducing capacity in some markets. In the coming days and weeks, we will be determining the best way to exit these locations, which may involve either a sale or orderly wind down of the operations. We are in the process of communicating this to our effected locations and associates and are not sharing any other information at this time. We will release more information after the process is complete."
Stock's court filings did note it had leases on roughly 20 properties that it expected to close sometime after May 6. These 20 (which include the showroom locations) were among approximately 210 leases that Stock has asked the court to reject. Most of the leases are for places that Stock has closed in the past two years, but for which lease payments had continued.
Earlier this month, a federal bankruptcy judge issued several orders designed to let Stock continue operating normally while it 's under Chapter 11 protection. Judge Mary F. Walrath also has scheduled a hearing at 10:30 a.m. ET May 28 to consider Stock's request to reject the unexpired leases. And Walrath has scheduled a hearing at 4 p.m. ET June 15 to hear more from attorneys about Stock's reorganization plan and set deadlines for filing objections.