Larry Todd Gibson learned the importance of names early in life. His father also was named Larry, and when he arrived at his first job he found four other Todds ahead of him. So Larry Todd Gibson deferred to those before him and became L.T. Gibson.
It's the same with the company Gibson helped create last year and leads today. U.S. LBM Holdings LLC is a vanilla sort of name that seems to have been chosen intentionally to bow to the more colorful, higher-profile operating companies within it. But calling yourself U.S. LBM also provides plenty of room for possibilities. Given the times and its creators' intentions, U.S. LBM could become the strongest force to arrive onto the construction supply scene since ProBuild and Stock Building Supply geared up half a decade ago. And the 43-year-old Gibson, likewise, is emerging as one of construction supply's most significant new executives.
Much of what U.S. LBM is today was part of Stock when that dealer reorganized under Chapter 11 bankruptcy last year and shed most of its northeastern operations, particularly facilities in Connecticut, New York, and Wisconsin. At the time, Gibson was Stock's vice president overseeing its north and central divisions. As Stock got set to jettison the facilities, Gibson organized the units' managers, found investors, and launched U.S. LBM.
The new company entered this year with $22 million in revenues after its initial two months in business. Soon after, it announced plans to acquire another former Stock unit, New Jersey's Universal Supply. Then it went outside the Stock family for the first time by nabbing Edward Hines Lumber of the Chicago area and its Indianapolis market subsidiary, Hall & House.
Add the original with the new units and their full-year results would total roughly $325 million, Gibson estimates. Sales like that would put U.S. LBM in the top 15 in revenue on the ProSales 100, with several dozen locations and more than 800 employees. And it aims to grow even more; U.S. LBM's website includes an invitation to other dealers to join the family.
Empowering the Locals
Just as notable, U.S. LBM intends to prosper through a holding company model–that is, with an extremely small, low-profile central office, and operating units that wield virtually all the power. None of America's biggest LBM operations have been run that way since Lanoga Corp. merged with The Strober Organization half a decade ago to form ProBuild.
Now, what used to be said about Lanoga's headquarters now applies to U.S. LBM's HQ in Green Bay, Wis.: It's so small the entire central staff could fit around a board room table. Only a few business functions have been centralized: finance, human resources, some information technology services, and a few company-wide vendor programs
"Anything that has to do with the customer is very much an operating company decision," Gibson says. "The best way to prevent a large overhead, functional silos and 'government type' job justifications is to never let them happen in the first place. You need a very talented team to pull off what we are doing, but due to our experience together and our ability to choose the best of the best to get started, we have that ability."
True to a company that makes "empowerment" one of its five core philosophies, the real decision-makers at U.S. LBM wear the logos of its operating units: Wisconsin Building Supply, Green Bay; East Haven (Conn.) Builders Supply; Bellevue Builders Supply, Schenectady, N.Y.; Edward Hines Lumber, Buffalo Grove, Ill.; Universal Supply, Hammonton, N.J.; and Hall & House, Westfield, Ind. Each operates virtually independently, with its own president. Gibson says he sees himself more as their servant than as their master.
And who oversees Gibson? At the top of the food chain are two non-LBM entities: Building Industry Partners (BIP), a small equity fund that helped Gibson make U.S. LBM a reality, and BlackEagle Partners, a much bigger private equity fund that provided the bulk of the funding to start the business. They also subscribe to the notion that past building material roll-ups lost their bearings on the road to getting big, and that U.S. LBM won't make the same mistake.
Everyone from board members to the guy running the forklift in Green Bay views U.S. LBM not as a new company or even as something calved from Stock's iceberg, but rather as inheritors of a tradition of locally oriented construction supply. For instance, when Wisconsin Building Supply people talk about Stock, they're not just referring to that big company down in North Carolina, but also to the original Stock Supply, founded in Green Bay by the Stock family and locally owned until K.C. Stock sold the business in 1998 to what was Carolina Holdings.
Stock's former CEO, Fenton Hord, once told ProSales he decided to change the names of all Carolina Holdings units to Stock around 2001 because the big, multi-market builders he was pursuing didn't realize Hord had lumberyards in territories where the builders operated. All those different operating unit names confused them. But U.S. LBM is taking the opposite tack; it's the operating units' names that will top the marquee.
In this and many other ways, to an outsider U.S. LBM looks as if it's intended to be the antithesis of what Stock became in the years after it sold out to Britain's Wolseley Plc and before Stock's bankruptcy-law reorganization. You won't see any attempts by U.S. LBM to dictate what brand of coffee every dealer must brew, or what vendor will be the only supplier of copier paper. In businesses like that, "you become so inwardly focused you lose the customer," Gibson says. Instead, while operating units will be judged according to a variety of metrics, the locals will have lots of leeway to reach their targets.
Vive la Difference
That freedom is necessary in part because the operating units vary so much. Bellevue serves lots of remodelers, while East Haven is heavy into light commercial projects and Wisconsin Builders Supply is more into new construction. The differences are just as notable within states; in Wisconsin, they use sheetrock in La Crosse but still apply plaster in Oshkosh, and some builders in Appleton prefer door jambs that are an eighth of an inch wider than the ones used in Green Bay.
"You have to be part of a community to get a real feeling for it," Wisconsin Building Supply president Bill Imig says. "You think you can be [based] in northern Illinois and go across the border to Milwaukee, but it doesn't work."
Adds Gibson: "We know what we're good at and will focus on those things in each market. I'm not going to make New York look like Wisconsin."
Consequently, it makes little sense to centralize a function such as purchasing, although operating unit employees will be encouraged to contact each other and cut group deals when it makes sense.
"Interaction is by choice now, rather than by necessity," Bellevue president Greg Gaskell says.
This is going to make things different for vendors who served U.S. LBM's yards in years past. Gibson isn't interested in seeing vendors name a key account manager for all of U.S. LBM, as was the case at times during the Stock days. That practice led vendors to think they didn't need to send their sales reps to each store, Gibson says. But at U.S. LBM, "we want every vendor teaching us about their product," he says. He and the others also said again and again that they believe being independent will make them more nimble, and thus better able to adjust the product mix and add or drop services as conditions change.