SRS Acquisition Corp., gunning to be known as the nation's fastest-growing group of independent construction supply companies, showed late today how serious that intent is when it announced it would open a new Stewart Roofing Supply location in Phoenix on Nov. 1 and close slow-moving Suncoast Roofers Supply units in Deerfield Beach and Fort Myers, Fla., by Nov. 30.
The South Florida stores "represented only 2% of SRS' annual revenue, yet employed significant working capital that will be moved to stronger markets, like Phoenix, to fuel faster pace growth," SRS said in statement. "SRS also reiterated that it has no plans to close any other locations in Florida or anywhere else in the nation and will continue to look for new strategic acquisitions and attractive teams of people interested in opening new locations around the country.
"SRS also restated its goal to end 2010 with close to 50 locations and attempt to reach over 80 locations by the end of next year, maintaining its position as the roofing industry's fastest-growing group of independent distributors," added the McKinney, Texas-based company, a unit of AEA Investors LLC. Once the changes take effect, SRS will be operating 41 locations in 15 states under 12 different names.
The new Stewart Roofing Supply location in Phoenix will complement a Stewart location in Tucson acquired in Tucson earlier this month (Story). Both stores will serve the residential new construction and re-roofing markets as well as commercial roofing needs. In Florida, the Fort Myers location will be merged with a nearby Sarasota store while the Deerfield Beach location represents and exiting from that market.
"This strategic move allows us to reposition a significant amount of assets into Arizona and get out from under a cost structure in South Florida that was not conducive for achieving our desired results in the foreseeable future," Ron Ross, SRS' chief executive officer, said in a statement. "...[W]hen this area of the country recovers in the years ahead, we do plan to renter these markets with the right cost structure and service offering that our customers have come to expect from us. We remain committed to build the nation's leading family of independent roofing distribution businesses and also to help the industry consolidate in a manner that is responsible."
SRS ranked 15th on the latest ProSales 100 list of America's biggest LBM operations, with 2009 sales of $240 million--double its 2008 sales. Since then, former No. 2 ABC Supply's takeover of former No. 4 Bradco Supply has caused SRS to move into 14th place. (See latest ProSales 100 list.)