Stock Building Supply will close all but one of its roughly 17 locations in Florida and locations in Virginia, Wisconsin, and Indiana as part of a revamp that has seen America's No. 2 LBM operation enter Chapter 11 bankruptcy protection as it gets a new 51% owner.
Calls to employees at locations around the Sunshine State confirmed that all of Stock's facilities will be closed by early August except for a commercial door and hardware unit in Sarasota. Spokesmen for Raleigh, N.C.-based Stock would confirm only one closure--the Homestead location, for which it had filed a closure notice with the state. Previously, the company has said that its Chapter 11 reorganization plan does involve cutting roughly one-third of its employees and closing an undisclosed number of branches.
"This is hitting me in the gut really hard," said Leo CancioBello, general manager of Stock's Homestead location, which he said would close by Aug. 1. "I feel worse for my guys who don't have any options."
Based on calls that ProSales made to Stock locations in Florida, using a map on the dealer's website as a guide, these locations are closing:
- Five facilities in Orlando--A lumberyard, an installed sales operation, a window installation unit, a commercial door and hardware unit, and a design center.
- Three facilites in Sebastian--A lumberyard, an installed sales operation and a millwork shop.
- Two facilities in Tampa--A design center and an installed sales operation.
- Two facilities in Haines City--A lumberyard and a door/trim shop.
- A lumberyard in Plant City.
- A lumberyard in Hobe Sound.
- A lumberyard in Homestead.
- A truss operation in Winter Haven.
Some of these locations already may be closed. In addition, the Stock map lists a construction loans office in Green Cove Springs, but a Chapter 11 filing indicates Stock already has shut that operation as part of a decision by its previous 100% owner, Britain's Wolseley Plc, to retain Stock's construction loans division as it sold 51% of the $3.2 billion company on May 5 to the Gores Group, a private equity operation based in Los Angeles.
In addition, Stock has filed a notice with the commonwealth of Virginia that it plans to close a components plant in Chesapeake, Va., effective July 12. Stock's website says the location produces trusses and wall panels. And on May 26, the state of Indiana officially received a notice of Stock's plans to close its operations in Franklin, Ind. Stock's website shows it has a lumberyard, installed sales operation, and a components plant there. Meanwhile, press reports said Stock plans to close a truss and wall plants in Delavan, Wis., that also includes a lumberyard.
Last week, a spokesperson for Stock confirmed 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, as well as seven locations in the Las Vegas area.
"As previously disclosed, Stock Building Supply will be reducing its staff by approximately 2,000 associates in select under-performing markets," the company said in a statement issued last week. "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."
On May 6, one day after Wolseley created a joint venture that gave the Gores Group controlling interest, 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.
One key to Stock's Chapter 11 reorganization plan is its request to reject hundreds of leases, including more than 200 on properties that it has closed in the past few years but on which it still owed lease payments. According to one Chapter 11 filing, Stock incurred more than $430 million in restructuring and impairment provisions in the fiscal year ended July 31, 2008. Those provisions were a big reason why Stock posted operating losses of $744 million that year despite racking up $3.5 billion in sales.
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.