Father knows best-not!

By Carla Waldemar

ErVeN in full-steam-ahead, pushIJthe-envelope, brave-new-world California, the antics we're about to be unfold teeter on lunacy. Who in his right, business-focuscd mind would open a second lumberyard in the current economic parallel to the great San Francisco earthquake?

Brothers Darin and Gregg Kelley, that's who. And it's not as if they didn't know better. They're the third generation of their family in this business.

And that's the key: That's exactly why the young fellas are confident of what they're undertaking. "The oldstyle retail lumberyards [such as this] are a dying breed," says co-owner Darin Kelley, Denair Lumber, Denair, Ca., who does not want to be counted in that number. And he's confident that won't happen, because "we know what we're doing." Cocky? Sounds like it, until you connect the dots that reveal their business strategies.

Following the lead of their grandfather and father, during high school the boys shared all the never-ending odd jobs that go with the territory, laced with the cold shower of reality in the form of Dad. "He kept telling us, 'You don't want to keep doing this! It's rough work, it's highly competitive. It's hard! "' recalls Darin.

And, as kids always do, they failed to listen "This was something we knew, and liked," Darin offers. Today the brothers, in their early 30s, serve as co-owners, with Darin in the yard and coordinating the company's buyers (who get together every 10 days to work on the price book) and Gregg in the selling role. As a result, even in these cataclysmic times, "We're making money," Darin reports. "Sure, we've slowed down, but we're not hurting like the rest. Last month was really good, so we're pretty happy."

Still, the question looms: Why not let well enough alone? Why tempt fragile fate by adding a second location? "Because we're stupid!" Darin laughs.

Yeah, right: dumb like a fox. The new Riverbank, Ca., store actually was owned by the Kelley family for decades and, over the years, served as home to Copeland Lumber, Oakdale Supply, and Central Valley Supply, but for months had stood vacant, due to the housing slump. "The last company in there had done a nice remodel, but then they up and left, including leaving all the inventory behind," says Darin.

Simultaneously a Keith Brown yard in Oakdale went belly-up, "and they had a guy we really, really liked. So when the Riverbank owners walked away, we decided, 'Let's talk to him. Let's throw him over there.' He liked the idea and brought along some of his guys, plus some of ours. And already the store is doing really, really well. There's nothing else over there except a Home Depot."

Home Depot, as you all know, isn't exactly the "old-style retail lumberyard" the brothers are hell-bent to operate. And therein lies the difference. "Home Depot isn't even competitive in price," attests Darin. "People come to us, showing us their plans and saying, 'Can you match the Depot's price?' Not only can we match it on their projects, we can beat it." But the big, fat misconception that an independent is more costly is a fallacy that's hard to counteract, he acknowledges in frustration. "Consumers have been so brainwashed that they believe it."

Yet, once in the door, "We've got loyal customers. They order wood and know they'll get taken care of. (Depot doesn't handle the long lengths anyway; they only carry short sticks.) We do stuff like take-offs for them; we do it all. And we have a staff with lots of experience. If we sell you a deck, we know the product and can tell you how to build it. Plus, we offer free delivery, while they charge $80. But mainly, we build relationships. People know we're here for the long haul, and that we won't gouge them; they won't get held up, and that goes both ways. People like to come in here and hang out."

And that includes d-i-yers as well as pros. "Oh, yeah: We take the time to walk them through their project.

They're looking for,'How do I do it?', like a father and son building a treehouse. They're looking for the best way, and we'll show them one that's better... and cheaper. I love dealing with them, because they're ready to listen, compared with the pros. Contractors are set in their ways, and you're not gonna change them. They know what they want. We treat everybody the same, even if they just come in for a pound of nails. We know what we're doing; we're not a big corporate chain that'll forget about you and doesn't care.

"But I love dealing with those single-family builders, too. Our services let them be in and out and won't stop them up. And they know that, in an emergency, we'll get something right out to them because their time is money. Plus, I also love seeing a nice house go up and know we had a part in it. We also can do custom millwork for them; we have a table saw and resaw machine, so they don't have to wait a week to get what they need."

Darin coddles tract builders, too. "Of course, there's not much production building going on at present. Three years ago, it started slowing down. Then, one day it was like, 'Let's all quit'-which was hard for California. We're a very fast-paced state and want to keep busy." When it picks up again, the Kelleys will be poised to serve those tract guys once again. "For them, I'm turning lumber all the time, turning the dollars. But they're tough [on pricing]. You can never make lots of money with them"-just one more reason the Kelleys are savvy enough to keep their accounts in many baskets.

"Another micro-niche that's been good for us is our commercial agriculture accounts. Farmers keep building quantities of turkey houses and needing tree stakes and such. It's a good niche when production building is down," he attests.

And remodelers are treated with respect. "We take care of the little guy, not like the big yards. And remodeling is doing better. Instead of buying new, like people used to do, they're adding a deck or remodeling while they weather the storm. We're pretty young and ambitious, so we'll stick it out while others are giving up."

Clearly, Denair has forged itself a position to maintain equilibrium by diversifying. Retail trade? Check. Custom builder? Check. Production builder? Check again. Remodeler, commercial, and the list goes on-all operating in communities that are

"very small-always have been, always will be-the Mayberrys of California," Darin maintains, and he likes it that way.

Nonetheless, belt-tightening is a fact of life as we know it for the shortterm, and the brothers have taken steps in that direction, too. "We've had to cut a few employees (from 35 to 22), but we kept our core, maintaining depth in experience and knowledge."

They've also downgraded trucks and lightened inventory-"the biggest thing-but we haven't cut too deeply because we want to maintain our reputation for carrying everything anybody needs," Darin explains. The company maintains its role as a good community citizen, sponsoring civic events.

Looking to the future, Darin hazards a prediction: "It may take a year and a half before things turn around, but already people are starting to grab up [housing stock] inventory," he notes-and that's a good thing. Pretty soon, the Kelleys will probably be nudging the fourth generation to fill the bins and sweep the floor. And that's a good thing, too.

- A former award-winning LBM trade magafine editor, Carla Waldemar writes frequently on the industry. Contact her at cwaldemar@ comcast.net.