etilive lig ence Forward, march!

By Carla Waldemar

tant choice of a lifetime: Go ahead with the project or bring out the mothballs? "Sure, the demand was greater three years ago," Mark acknowledges. "But the problem with a project like this is, it takes so much energy and work to get into it that you can't just stop it. We chose to move forward," he declares.

When good times roll back (as they will in a year, Mark foresees), Kelseyville Lumber will be poised to prosper. Already, Mark's thinking has proved correct. Town folks-retail customers and pros alike-are ecstatic about no longer having to drive 45 minutes to a Home Depot in Ukiah and are super-supportive. For Kelseyville Lumber, bounding from 4,000 sq. ft. to-gulp!-40,000 in retail alone within the new 81,000-sq. ft. building, which also includes covered yard storage and a whole lot more. is... well. let's let Mark tell it: "It's a big box, but a little more homey." Best of all, it meets its goal. It now offers one-stop shopping in a town with nothing of the kind before. The outfit's glass operation, started in 2003, and its door and window shop, opened in 2008, have been brought in-house. The wait time for special orders has become a thing of the past, as SKUs jumped from 24900 to ,14000 (including a big leap in fasteners).

Itr/HEN the going gets tough, the V Y tough keep going.

Kelseyville Lumber, located in that tiny Lake Country, Ca., community, was burning rubber-doing almost more business than it could handle, thanks to its top customers: the resort folks and local builders, the two main industries that kept the town hustling.

Mark Borghesani, general manager ofthe yard his grandfather launched in 1956 and where he himself has put in time ever since fourth grade, had foreseen his options-expand or wither. As far back as 2001, he recognized the need to trade the yard's hemmed-in, downtown location for a more spacious site.

So, as with every major outlay, he made his case with his dad. Robert. Kelseyville's president, just as he had for every significant, forward-looking purchase, from trucks and racking system to computers. "I can remember buying my first fax machine and punching in another phone line," the young man recollects with a laugh. "Dad didn't talk to me for two weeks. Everything I did, I had to run past him-give reasons." Still do.

And the reasons he gave for expansion were dead-simple: "We were so limited that we knew if we were to stay in business, we'd need a new yard."

The frantic building boom of '03 to '06 propelled the project forward. "Money was flying around like nobody's business, so we had no trouble coming up with financing," Mark recalls. "So I bought more equipment and we started drawing up plans for a big, new, multi-million-dollar facility. I was ready to stock it when we were hit with D2"-as he labels the current recession. Depression Two is, to be blunt, exactly what it looks like in the eyes of Kelseyville, where buildingthe area's second-largest industry, remember-is bone-dry and unemployment has climbed to l1%o.

So, time to make the most impor-

But beyond lumber, doors and fasteners, Kelseyville has taken on new niche offerings designed to draw traffic, such as marine supplies for the area's avid lake lovers, as well as other sporting needs, from fishing rods to hunting permits.

Adding an indoor/outdoor garden center has already paid off (pardon the pun) in spades. "It's boosted transactions 25Vo," Mark reports with gusto, "and draws foot traffic through the new store."

So does the new rental center. leasing small to mid-size tools "and soon, ditchers and posthole diggers," he adds. Also ready to debut: a full-scale, three-meal restaurant (run by an outside operation), also expressly designed to draw traffic,'Just as they do in a Target or Wal-Mart," Mark explains. (Look for the new in-store coffee cart, too.) "We'll stay open Thursday, Friday and Saturday evenings to create a shopping environment for those diners," he continues. And to snag the ever-growing online shopping crowd, Mark's brother, Paul, the v.p. who oversees outside sales and the company's web presence, is upgrading Kelseyville's website (www.kelseyvillelumber.com) to handle online orders, with the help of Orgill, which also assisted with store design and pricing.

To add to customers' ease (and the company's own profits), Kelseyville also installs windows, doors and mirrors, while subbing out items like cabinetry and flooring.

Catering to the new retail clientele is not-repeat, not-stone-simple when you've been pro-oriented in the past (the mix has segued from75/25 to 50/50). Despite a staff of 60-since the move, it's larger than it's even been-of what Mark depicts as "pretty diversified, experienced and loyal people," the hardest part about the move has been the new mind-set: "catering to everybody, from the pros, who need quick, efficient service (and still get free delivery) to the little old lady with a leaky faucet. But we try to manage rI.

"Pricing," he attests, "has become really important. We have four or five people working on that, department by department, from PVC to wire fencing. All it takes is one person talking around about it [noncompetitive pricesl, and people won't come back." Astutely, therefore, "we keep a close check on the competition."

The gorgeous new showroom has proven "effective immediately," Mark reports. In line with the times, "We've added a cheaper line of decking, of fencing, and of redwood retaining walls."

Yet, nobody's perfect, right? Mark has learned, through the endeavor, that "you plan and plan and still don't get it all right, especially if it's your first store. We keep adjusting, keep on tweaking.

"What would I have done differently?" he ponders. "Not been in such a hurry. I would have worked longer on stocking-worked with vendors to get a deal before stocking, not wait until the pressure's on. We merchandized the store in 60 days and were closed only a week. I pushed it hard...."

Ambitiously, he's still pushing. Kelseyville has taken on two additional outside salespeople to expand the territory it covers. And, for the first time ever, the company has begun advertising. "We've never had to before; we'd been so busy we couldn't keep up. Now, we have four or five people working on marketing alone, and we're putting out an eight-page newspaper flier." However, "we plan to build a database and send it electronically soon."

D-i-yers love the store. But what's happening with the pros? "They're in here," Mark notes, adding that "a free icemaker helps draw them," just as he'd predicted. "But they're just not buying anything much-just working on little projects." Yet, when these builders eventually need house packages again, Kelseyville will deliverliterally. "We have two cranes, two forklifts, four trucks," and the list goes on.

To keep this fleet from driving the company into a money pit, Mark has put in a new, 10p00-ga11on diesel fuel tank, allowing him to buy a full load, which has cut his fuel costs by 25Vo.

Nonetheless, riding out 2009 is tough, no two ways about it. In another cost-cutting move, says Mark, "We're really streamlining our truss plant, which has been really affected by the slowdown. To keep the crew busy, we're using them to drive our vehicles."

What's the outlook in this basin of California? "I expect tough times through next winter before things pull around" foresees Mark. "The hardest part is keeping up morale. It takes a lot out of both employees and owners; everybody's challenged, everybody's making concessions. The most important thing is keeping an open book, laying it on the line: 'Here's where we are, and here's where we need to be.' Put it in their hands. To keep loyalty strong, as a manager, you've got to work even harder than your employees, so they see you putting in evenings and weekends. Then they'll believe it and stick with you. At Home Depot, it's all about the money. Here, it's utterly different."

And that's exactly why the odds are strong that Kelseyville Lumber will not only pull through, but lead the pack.

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