You bought the house, you moved in, but now you wonder what to do next. That's the task facing some dealers who bought lumberyards and facilities that Stock Building Supply sold or closed after the second-largest U.S. dealer left dozens of markets as part of its reorganization under Chapter 11 bankruptcy.
By ProSales' count, Stock facilities in 28 locations across 12 states changed hands this summer and fall. (See map, page 38). A few of the yards reverted to the people who had sold facilities to Stock several years ago and who continued to manage the locations under the Stock name. Other facilities got completely new ownership.
Sometimes, the new dealers found they needed to improve the building and yard, while at other sites, the changes required were more psychological than physical. Some places needed both upgrades.
Last August, Kitzmans finalized a deal to purchase a Stock location in Loves Park, Ill., that included a 12,000-square-foot facility. Soon after, company president Steve Kitzman arranged to blow a hole through the building, creating a drive-thru lane for contractor pick-ups.
"For us it was a nice, large building, but despite its size, there was no way a customer could pull up to the building easily," Kitzman says.
Inside, Kitzman said the building gave one the feel of a being "a rat in a maze" thanks to a tangled collection of kitchen vignettes and walls that just "didn't make sense." Shoehorned into one corner of the building were retail shelves. If customers wanted to get to those shelves, they had to traverse the maze.
All told, four 40-yard dumpsters were filled with debris ripped out of the building, Kitzman says. Eventually, Kitzmans moved the headquarters of its three-unit operation from a Rockford, Ill., location, now closed and used for storage, to the Loves Park facility.
Because the Stock location was closed for nearly four months before Kitzmans purchased the building, it inherited only four of Stock's employees. While Kitzman felt that the quartet he inherited were just going through the motions, he soon learned that some of his own employees were doing the same.
"I wasn't prepared for the human relations changes I encountered," Kitzman adds. "Not only did we need to work on the building, but we needed to instill an entrepreneurial spirit in some of the employees. We work in overdrive, not first gear."
Freedom in Connecticut. Speed and recapturing the entrepreneurial spirit Kitzman describes are on Antonio Rossano's agenda. "Nimbleness comes to mind," the Connecticut dealer says. "Being quicker."
Rosanno ran the two-unit East Haven Builders Supply for more than 25 years before selling to Stock five years ago. Now he's running his own yards again and is part of a major new player in the industry.
In November, BlackEagle Partners LLC, a private equity firm based in Bloomfield Hills, Mich., joined with Dallas-based Building Industry Partners to acquire Stock locations in Connecticut, New York, and Wisconsin. Their acquisition vehicle was a newly formed holding company called US LBM Holdings LLC, whose president and CEO, L.T. Gibson, until August was vice president of Stock's North Central U.S. operations.
