Father knows best- not!

By Carla Waldemar

ErVgN in full-steam-ahead. pushI-lthe-envelope. brave-new-world California, the antics we're about to be unfold teeter on lunacy. Who in his right, business-focused 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 l0 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 stupidl" 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 Ioyal 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?', likc a father and son building a treehouse. They're looking for thc best way. and we'll show them onc that's better... and cheaper. I love dealing with thcm. because they're rcad1" to listen, compared with the pros. Contractors are set in their ways, and you're not gonna change thcrrr. They know what they want. We treat cvcrybody the same, cvcn if they just come in for a pound of nails. We know what we're doing; wc're not a big corporatc chain that'll forget about you and doesn't care.

"But I love dealing with thosc single-tarnily buildcrs, too. Our services let them be in and out itnd won't stop thcnr up. And they know that. in an cmcrgcncy, we'll get s<lmcthing right out to thcm becausc their tirne is moncy. Plus. T also ltrr c see ing u nice house go up and know we had a part in it. We also can do custorn rnillwork fbr them: wc have a tablc saw and resaw machine. so they don't havc to wait a week to gct what they need."

Darin coddlcs tract builders. too. "Of course, there's not much production builcling going on at present. Three ycars ago. it started slowing down. Then. <lnc day it was likc. 'Let's all quit' which was hard fbr Califbrnia. We're a vcry first-paced state and want to kecp busy." When it picks up again, the Kelleys will be poisecl to serve those tract -guys once again. "For them. I'm turning lurnber all the time, turnin-g the dollars. But they're tough Ion pricing]. You can ncver make lots ol'money with lhem" -just ()ne m()rc reason the Kelleys arc savvy enough to keep their accounts in many baskets.

"Another micro-niche that's been -toocl firr us is our conrmercial agriculture accounts. Farmers keep building quantities of turkey houscs and needing trcc stakes and such. lt's a good niche whe n production building is down," he attests.

And remodelers are trcalcd with respect. "We take care of the littlc guy. not like the big yards. And renrodeling is doin-e better. Instead of buying new, like people used to do, they're adding a deck or remodeling while thcy weather the storm. We're pretty young and ambitious. so we'll stick it oLrt while others are givin-e up."

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

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

Nonetheless, belt-tightening is a fact of lif'e as we know it tbr the shortterm, ancl the brothers have take n steps in that dircction, too. "We've had to cut a f'cw crrrployees (from -j5 t<t 22), but ue kcpt trur core. maintuining depth in cxperience and knowledgc."

They'vc also downgraded trucks and lightened inventory-"the biggest thing but we hztvcn't cut too deeply bccause wc wirnt lo rnaintain our rcputation 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: "lt may take a year and a half before things turn around, but alrcady people are starting to grab up Ihousing stock] invcntory," he notcs and that's a good thing. Pretty soon. the Kelleys will probably be nudging thc fourth generation to fill the bins and sweep the floor. And that's a -gi'rod thin-9. too.

- A.forttrar un'urd-v,inning LRM tnrtle ntagajrte aditor, Corlu Wuldctnur writcs liequentlt' ott tltc industr,-. Contuct hcr ot t vt'aldemo r@ conk ust .net

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