It makes for great soap opera to say that ProBuild's plans to set up three lumberyards in the heart of 84 Lumber's territory lies stems from some desire by ProBuild president and CEO Bill Myrick to strike out at the company he left after a 25-year career working for Joe Hardy and Maggie Hardy Magerko. But there's also a logical reason to do battle: These days, Pittsburgh is a market worth serving.
Just last month, The Wall Street Journal noted that the Pittsburgh area is one of the few metro regions in the country where home values are rising. It should finish this year with prices 30.9% higher than they were in 2000, markedly better than the 22.6% gain homes nationwide will show. And Pittsburgh didn't have the boom and bust seen in lots of other markets where ProBuild operates.
Of course, 84 has enjoyed that benefit for years; its headquarters in Eighty Four, Pa., is just 30 miles south of the Steel City, and it has 20 lumberyards within 50 miles of downtown. In contrast, ProBuild's nearest facility today is 120 miles from Pittsburgh. But by August, it expects to have a branch in Morgantown, W.Va., 75 miles to the south. After that, ProBuild plans to set up lumberyards in White Oak, Pa., just southeast of Pittsburgh, and in Altoona, Pa., 100 miles to the east.
All three openings are unusual in that ProBuild is starting facilities at places that didn't have lumberyards before. It's much more common across the country to buy a current or former yard and then put your name above the front door.
ProBuild's plans represent one of the most overt challenges in years by one major lumberyard against another. ProBuild is the No. 2 company on the ProSales 100, with roughly 450 facilities and 2010 sales of $3.5 billion, 87% of them to pros. Mean-while, 84 ranks fifth on the list with roughly 265 branches and $1.45 billion in sales last year, 95% of which went to pros.
