HBSD - June 2019 by ensembleiq

Click here to learn more about Dealer Markets!

Find Out What An Orgill Dealer Market Is All About The industry event that has everything you need to increase your profitability.

Don’t Miss These Highlights: • Deep Discounts • New Product Launches • Idea-Generating Showcases and Concept Stores

• eCommerce Solutions • How-To Demonstrations • Workshops & Clinics From Industry Experts

To learn more, visit www.orgill.com/Dealer-Market-Advantage. 1-800-347-2860 ext. 5373 • information@orgill.com • www.orgill.com • Orgill, Inc. 4100 S. Houston Levee Road Collierville, TN 38017

HBSDEALER HARDWARE + BUILDING SUPPLY

PRODUCTS 28 Made in USA rides again,

30 highlighting some of the sites of domestic manufacturing.

30 Product showcase,

sponsored by the National Hardware Show.

MARKET INSIGHTS 26 Consolidation and You,

Updated for 2019 Kodiak Building Partners Chairman Paul Hylbert returns to a familiar topic.

COVER STORY LEADERS OF LUMBER Six industry leaders bring a variety of viewpoints to the art and science of LBM distribution. One common denominator: a passion for the business.

FROM THE EDITOR 8 A sister team in Cut Off, La.,

knows what it takes to succeed in business.

NEWS & ANALYSIS 10 Meet the new OSH in California: Outdoor Supply Hardware

10 Following up on the

Sears-Craftsman lawsuit

38 On Leadership

Tony Misura examines Builders Millwork, and what it takes to attract leaders.

IN EVERY ISSUE 14 40 42

Product Knowledge People in the News Quikrete Industry Dashboard

12 Linda Alvarado steps

up to the plate for the ProDealer Industry Summit

14 HD vs. LOW, a tale of the Q1 tape

‘Made in USA’ raises its voice.

14 Ace Hardware boosts its retail holdings

Hardware + Building Supply Dealer (ISSN 2376-5852) is published monthly, except for July/August and November/December, which are double issues, by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631. Subscription rate: $119 per year in the United States; $139 in Canada and Mexico; $279 in all other countries (air mail only). Periodical postage paid at Chicago,IL, and additional mailing offices. POSTMASTER: Please send address changes to HBSD, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Subscription changes also may be emailed to hbsdealer@omeda.com, or call 847-564-1468. Canada Post: Publications Mail Agreement #40612608. Canada Returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. For change of address, six weeks notice to Hardware+Building Supply Dealer, P.O. Box 3200, Northbrook, IL 60065-3200 is requested. Give old and new address and zip code. If possible, enclose address portion from cover on previous issue. Vol. 45, No. 3, March 2019. Copyright © 2019 by EnsembleIQ. All rights reserved.

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

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Charlotte Pipe. The most trusted name in pipe and fittings.

Whether looking for PVC, ABS or CPVC CTS Pressure and Drainage pipe and fittings, customers nationwide walk into stores every day asking for Charlotte Pipe by name. But customers aren’t the only ones who love us. Buyers do, too. Why? We have seven distribution locations across the U.S. and world-class customer service. Known for great fill rates, on-time delivery, planogram signage and more. It’s a part of a system you’ve come to trust and it can’t be beat. charlottepipe.com/retail

HERE’S WHAT’S ONLINE

@HBSDealer

Tweet Central

Demo Day at the Hardware Show HBSDealer steamrolled into Las Vegas for the National Hardware Show. Check out these cool product demonstrations at HBSDealer.com. And check out our full library of videos — from ‘New Product Juggling’ to event coverage on the HBSDealer YouTube channel.

The Golden Hammer Strikes Again There’s still time to enter the Golden Hammer Awards. HBSDealer is seeking entries for its Golden Hammer Awards, recognizing the best new products in the home improvement industry. Visit HBSDealer.com to find out more.

Poll Results

Based on the first quarter, are you lowering your expectations for 2019 housing starts?

49%

51%

No, the pace will pick up in the coming months. Yes, the numbers have been surprisingly disappointing.

Follow HBSDealer on Twitter @HBSDealer.

Participate in a new poll question each week on HBSDealer.com

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

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FROM THE EDITOR

These sisters mean business Melaco Sisters Hardware & Supplies in Cut Off, La., isn’t the only thing named for the sisters Vanessa Melancon Pierce and Lauren Melancon. There’s the LB Vanessa, a 190-ton vessel with 20-story-high legs that drive deep into the sea to create a platform for building and repairing oil and gas rigs. There’s also the LB Lauren Frances, with even longer legs and one of the largest liftboat cranes in the Gulf of Mexico. The Liftboat Vanessa

Vanessa and Lauren know the offshore drilling business. Their grandfather pioneered the liftboat industry, and they took over OffShore Liftboat Inc. when their father retired. Last year, with the energy industry facing challenges, and with the family business looking to diversify (and also looking for better deals on parts), they considered buying a hardware store. “It kind of started as a joke — ‘let’s just buy this hardware store,’” said Vanessa. “And we ran that by a few family members, my husband, friends, coworkers, and nobody said we were crazy.” The two sisters — novices to hardware retailing — purchased Kief

Hardware, expanded it to 23,000 sq. ft., and opened the doors on Jan. 31. Importantly, they retained several key members of the Kief staff. The sisters also brought with them some advice they received from an oil industry veteran: “Just know what you don’t know, and be willing to learn,” she said. It’s rare when a sister team jumps into the hardware business. Rarer still are sisters in the liftboat-and-oil-rig industry. “We’re coming from a business where my sister and I own the only womanowned and operated liftboat company in the country, a predominantly male driven business from all sides,” Vanessa said. “We had seriously been immersed in a truly male-driven, good-ol’-boys-club kind of industry. It was a constant test of, “do you really know what you’re doing? “Coming into hardware was very different. And the first time we went to the [Do it Best Market], we walked in and, yes, there were a lot of men. But then, we also saw women and children, and hardware seems to be more of a family business,” she said. Vanessa said one of the great rewards, so far, of running a hardware store is the day-to-day immersion in their home town — especially as it shows signs of economic recovery. “We don’t have to leave town to talk to our customers,” she said. “At Melaco Sisters, our customer base is our community. We’re working in the community where we live and that we love and where we were raised.” Full speed ahead. HBSD

HBSDEALER HARDWARE + BUILDING SUPPLY

Hardware + Building Supply Dealer An EnsembleIQ Publication 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631 hbsdealer.com HBSDealer On The Web • HBSDealer Info Services SENIOR VICE PRESIDENT (HBSDealer, Drug Store News, Chain Store Age) John Kenlon, jkenlon@ensembleiq.com, 212-756-5238 EDITOR IN CHIEF Ken Clark kclark@ensembleiq.com, 212-756-5139 LBM EDITOR Andy Carlo acarlo@ensembleiq.com, 845-891-5108 CONTRIBUTING EDITOR Ken Ryan ryankgr@aol.com, 516-567-3034 Editorial Inquiries: Direct questions to Editor in Chief Ken Clark. ADVERTISING SALES

Midwest & Southeastern States SENIOR REGIONAL MANAGER Amy Platter Grant agrant@ensembleiq.com, 773-294-8598 Northeast and Great Lakes States REGIONAL MANAGER Greg Cole gcole@ensembleiq.com, 317-775-2206 PRODUCTION/ART

VICE PRESIDENT, PRODUCTION Derek Estey destey@ensembleiq.com, 877-687-7321 PRODUCTION MANAGER Michael Kimpton mkimpton@ensembleiq.com, 647-557-5075 CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com PRODEALER INDUSTRY SUMMIT OCT. 8TH TO 10TH, COLORADO SPRINGS, COLO. WWW.PRODEALER.COM IN PARTNERSHIP WITH THE NLBMDA, WWW.DEALER.ORG CONTACT: AMY PLATTER GRANT agrant@ensembleiq.com, PDIS DIRECTOR OF SPONSORSHIPS PUBLISHER OF HARDWARE + BUILDING SUPPLY DEALER, DRUG STORE NEWS, CHAIN STORE AGE. CIRCULATION LIST MANAGER: ELIZABETH JACKSON, MERITDIRECT (847) 492-1350 X318. PERMISSIONS: MATERIALS IN THIS PUBLICATION MAY NOT BE REPRODUCED WITHOUT WRITTEN PERMISSION. TO ORDER REPRINTS CALL PARS INTERNATIONAL AT (212) 221-9595, EXT. 435, OR EMAIL LF-REPRINTS@PARSINTL.COM. CONTACT COPYRIGHT CLEARANCE CENTER, 222 ROSEWOOD DRIVE, DANVERS, MA 01923, (978) 646-2600 OR (855) 239-3415, OR ON THE WEB AT COPYRIGHT.COM FOR IMMEDIATE AUTHORIZATION TO PHOTOCOPY FROM HARDWARE + BUILDING SUPPLY DEALER (ISSN 2376-5852).

Corporate Officers EXECUTIVE CHAIRMAIN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF FINANCIAL OFFICER Dan McCarthy CHIEF OPERATING OFFICER Joel Hughes CHIEF INNOVATION OFFICER Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCE Ed Several

connect with us

Ken Clark Editor in Chief

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

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NEWS + ANALYSIS

The Return of ‘OSH’ Orchard Supply Hardware is out. Outdoor Supply Hardware is in. That’s the recap of the latest big story in California hardware retailing, as the Central Network Retail Group (CNRG) announced plans to open seven stores in California, all in locations formerly operated by Orchard Supply Hardware. CNRG, a multi-format, multi-brand retailer currently operating 104 hardware stores, home centers and lumberyards throughout 14 U.S. states, will create Outdoor Supply Hardware, its 16th brand. While CNRG, the subsidiary of Orgill, will bring its own merchandising assortment to the stores, this new brand will also strive to honor the longstanding appeal of Orchard Supply to local consumers and business shoppers by offering many of the same products and services for which the locations

were well known, the company said. “These stores have meant so much to these communities over the years and we are excited to be able to bring them back to life,” said John Sieggreen, CNRG president. “These are fantastic locations in highly trafficked shopping centers and we look forward to getting them staffed and merchandised in the next few months so we can be open sometime this fall.” Mark Baker, former CEO of Orchard Supply Hardware, was instrumental in helping CNRG bring this idea to fruition, the retailer said. “I know firsthand just how special these stores are to their customers,” Baker said in a statement. “When I initially approached CNRG about the concept I was confident we could win back the support of shoppers, team members, and suppliers, and I’m even

more certain of that now after having worked on the plan with the CNRG team over the past few months. These seven stores are a great way for CNRG to enter the California market.” Though he will help launch the brand, Baker will not take a permanent role with the CNRG management team, the company said. CNRG expects the stores to begin opening as early as September. With deep California roots, Orchard Supply Hardware was founded in 1931. In August of 2018, Mooresville, N.C.based Lowe’s announced a plan to close all 99 Orchard Supply Hardware stores in order to focus on its core home improvement warehouse model.

Following up: The Craftsman case A lawsuit over the use of the Craftsman brand by its former owner Sears has been settled. The suit was brought by Craftsman’s current owner, Stanley Black & Decker, which bought the brand from Sears in early 2017. In a complaint filed March 6 in the U.S. District Court for the Southern District of New York, Stanley claimed a breach of contract and trademark infringement. The case of Stanley Black & Decker vs. Transform Holdco was dismissed April 15, with terms undisclosed. Transform Holdco, or “New Sears,” is the entity that purchased Sears Holdings out of bankruptcy in early 2019. “The parties reached a mutually acceptable resolution of the disputed issues raised in the litigation,”

The Craftsman Ultimate Collection.

according to a Transform Co. spokesperson. Stanley Black & Decker told HBSDealer it did not have any additional comments beyond what was published in the complaint. In the complaint, Stanley said Sears had the “limited right” to continue to make and sell some Craftsman products. But in February, shortly after

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

Sears filed for bankruptcy protection, Sears published a press release touting the “Craftsman Ultimate Collection” professional-grade mechanics tools. In the press release, Peter Boutros, chief brand officer for Sears and Kmart said: “Sears is the real home of the broadest assortment of Craftsman.” As of presstime, that particular press release continued to reside on the Sears media page on its web site. According to the Stanley complaint, the Sears advertising caused confusion, and is in breach of the license agreement, Stanley says. It also tarnished “the value of the famous Craftsman trademarks for which Stanley paid hundreds of millions of dollars to acquire,” the complaint reads.

HBSDealer.com

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NEWS + ANALYSIS

An Industry Summit Swings for the Fences The ProDealer Industry Summit will embrace the “Moneyball” movement when the event comes to Colorado Springs in October. Construction industry leader Linda Alvarado, an owner of the Colorado Rockies, will deliver the keynote address. Alvarado is president and CEO of Alvarado Construction, Inc., a commercial general contractor, construction manager, development, design/ build, and property management firm. Alvarado Based in Denver, the company has offices in several states and has successfully developed and constructed projects across America and internationally.

Alvarado, who made history as the first Hispanic owner of a Major League Baseball franchise, will bring her skills to the ProDealer Industry Summit at Colorado’s historic Broadmoor Resort, Oct. 8-10. She has 30 years of experience in commercial development, government and institutional general contracting, construction management, design/build, and program management contracts. As an owner of the Colorado Rockies, her role is also significant as it marked the first time that any woman was involved in a

bid for ownership of a Major League Baseball team. “Linda Alvarado is an accomplished and inspirational figure in sports and business,” said Amy Grant, the summit’s director of sponsorships. “We are excited to have her join our conference and spend time with the leaders in our industry.” The ProDealer Industry Summit is hosted by the National Lumber and Building Material Dealers Association in partnership with HBSDealer. Visit prodealer.com for more information.

News Map: Openings, Closings & Acquisitions The acquisition reports continue in large and small markets around the country. For more reports of businesses coming and going, visit HBSDealer.com.

wisconsin

Germantown

OPENING

CLOSING

Bliffert Lumber & Hardware Neu’s Supply Line has reopened as Bliffert Lumber & Hardware’s. The Milwaukee and southeastern Wisconsin operator has grown from two yards in 2002, to eight currently.

ACQUISITION

ohio

Minerva

Busy Beaver Home Center The Pittsburgh-based chain’s fifth-store in Ohio — and 24th over all — will be called True Value of Minerva. The store, formerly known as Three Sons’ True Value, dates to 1974.

nebraska

Fremont

Kodiak Building Partners Christensen Lumber is now part of Kodiak’s Building Material Group, under the direction of Mark Garboski. Tom Christensen, previously the owner, will continue as president or the pro dealer.

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

new jersey

North Brunswick

Costello’s Ace Hardware The Long Island, New York-based hardware retailer, and former HBSDealer Golden Hammer retailer of the year, opened its third New Jersey location, and 30th store over all.

HBSDealer.com

STAINS & FINISHES MASTERED

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NEWS + ANALYSIS

Lowe’s and Depot: A tale of the tape In the first quarter home-improvement showdown, Home Depot had the larger sales, larger earnings and larger sales growth than its main rival, Lowe’s. But something happened in the first quarter that hasn’t happened for years — Lowe’s posted a higher U.S. comp number than its Atlanta-based rival. The last time that happened was the first quarter of 2016, a narrow victory for the Mooresville, N.C. retailer. “Our first quarter comparable sales performance is a clear indication that the consumer is healthy and our focus on retail fundamentals is gaining traction,” said Lowe’s CEO Marvin Ellison. Home Depot, which was dealing with a 53-week calendar year in 2018, said the wet weather and lumber price deflation weighed on the business.

U.S. Comps, Lowe’s vs. Home Depot A rare lead for Lowe’s in Quarter 1 10%

Lowe’s Home Depot

0 15Q3 16Q1 16Q3 17Q1 17Q3 18Q1 18Q3 19Q1

Source: Company reports

Ace expands retail holdings Ace Hardware Corp. has bolstered its retail holdings by purchasing the remaining 58% of the stock of ACO Inc., operators of 50 hardware stores in Michigan and Ohio under the Great Lakes Ace Hardware banner. Ace had prevoiously owned 42% of ACO. The move -- announced in the Ace first quarter earnings report -brings Great Lakes Ace under the Ace Retail Holdings (ARH) umbrella along

with Westlake Ace Hardware, which operates 124 stores. Ace purchased Westlake in 2012, establishing ARH. The move requires Ace to include ACO’s operating results in Ace’s income statement, which shows ARH — ACO and Westlake combined — sales up 28.6% to $73.3 million. The increase was the result of 8 additional Westlake stores, a comp-store sales increase of 8.2%, and a $6.1 million contribution from the ACO acquisition. Also during the first quarter, the Ace co-op added 41 stores in the United States and cancelled 20 stores, bringing the number of domestic stores to 4,497. Around the world, the co-op’s total store count is 5,278. For more financial news, visit HBSDealer.com.

Product Knowledge Product: The Arrow T50 Staple Gun Manufacturer: Saddle Brook, N.J.-based Arrow Fastener Company, a division of Hangzhou GreatStar Industrial Company. Knowledge: Arrow calls this iconic, made in the USA, gun the best-selling staple gun in history. More than 50 million units have been sold since the product’s introduction in the 1950s. Inside the chromed steel housing sits a powerful coil spring and steel working parts hardened in a 1,500-degree furnace. Fun fact: Look closely in the chrome finish — this limited edition commemorative T50 celebrates “90 years” of the Arrow Fastener Co.

Great Lakes Ace in Allen Park, Mich.

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

The path to purchase has become inďŹ nite. We map the journey and give you back control.

Shopper Journey AscendanceTM from EIQ Insights & Innovation shows you how your customers navigate the omnichannel experience and empowers you with a strategic plan to inďŹ&#x201A;uence behavior. Partner with us to master your view and elevate your performance. ascendance@ensembleiq.com

Collective Advantage Steve Sallah

CEO LBM Advantage New Windsor, N.Y.

By Andy Carlo

hese six industry leaders bring a variety of viewpoints, and a singular passion for the business. Commodity fluctuation, housing starts, labor, technology, gaining new customers — they’re all part of the common and collective challenges faced by some of the strongest organizations in the LBM Industry. But each organization has a different set of priorities when seeking a larger piece of an industry that could grow well over the $900 billion mark in the next two years. HBSDealer discussed a variety of key topics with the leaders of some of the industry’s largest players including Builders FirstSource, Do it Best Corp., LBM Advantage, Lowe’s, McCoy’s Building Supply and 84 Lumber. Each top executive provided a unique perspective on how they are seeking growth, making adjustments, and how they fit into the overall industry. 16

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

BM Advantage is an extension of its members’ lumber yards and takes on the challenges faced by its dealers. And with great power comes great responsibility. “The pro chains and big box stores still crave the contractor business that has been the staple of the independent for a hundred years,” said Steve Sallah, CEO of LBM Advantage. “Our goal is to get our independents the pricing, terms and rebates that allow them to compete for traditional business and even expand into new markets, including multifamily, commercial, marine and others.” The buying group has 1,100 member yards in 36 states with a retail presence of more than $8 billion annually. It is made up of two divisions — building products and forest products — roughly equal in size. Within its ranks are 550 members with more than 26,000 employees. “We have some unique cooperative challenges that any hardlines and LBM cooperative faces in an industry that is changing more rapidly than ever

before — including the need to add members and expand to offset the reduced number of independent dealers,” Sallah explained. “Private equity and consolidation has accelerated a trend toward fewer independents.” The concept of teamwork has played a major role in the success of LBM Advantage, and will continue to do so, Sallah said. “Another challenge is to ask our dealers to think big — to act together as a segment that is larger than their individual footprints and markets,” he said. “By working together, and in spite of the fact that they compete locally, they have to act collaboratively to get their best share of the supply and pricing value from manufacturers.” LBM Advantage embarked

“Our decision to move into territories outside of our legacy territories of the Northeast, Midwest and South and into the Southwest and West has been an important part of our growth and has helped us grow stronger in our relationships with our vendors, especially the national manufacturers and distributors.” HBSDealer.com

on a strategy — “National Power with Regional Expertise” — that optimizes offices in New York, Michigan, Louisiana, and — thanks to the recent merger with IBSA — North Carolina. Sallah describes this geographic footprint as a “differentiator” that has helped LBM Advantage increase retention and recruiting. With the industry changing rapidly, LBM Advantage has embraced the concept of “Clarity of Purpose.” In addition to its mission statement which is to “Create a Competitive Advantage” for members by leveraging their collective power — the buying group has isolated a clarity of purpose message which is to Align Member Challenges with Vendor capability. “Our decision to move into territories outside of our legacy territories of the Northeast, Midwest and South and into the Southwest and West has been an important part of our growth and has helped us grow stronger in our relationships with our vendors, especially the national manufacturers and distributors,” Sallah says. “The Southwest and the West are growing in terms of population and there are very successful full-service independent lumber yards that have been underserved by LBM cooperatives.” LBM Advantage has an eye on future as well. The buying group’s NextGen program is designed to help members retain and attract new and younger employees to their business. “Our channel is building homes that will last 200 years and raise a dozen families,” Sallah said. “What could be more important and more exciting than that?”

HBSDealer.com

Diversity and Flexibility Maggie Hardy Knox President 84 Lumber Eighty Four, Pa.

ith nearly 250 locations in 126 markets within 30 states, 84 Lumber relies on autonomy at each store to help drive decisions and success. “Providing that flexibility enables our stores, and the company overall, to thrive. We’re more concerned about being the best instead of the biggest,” says 84 Lumber President Maggie Hardy Knox. “For us, it all happens at the store. That’s where we have the most direct access to customers. When we’re planning companywide changes, we first need to make sure that they’ll benefit our individual locations.” Diversity, based on geography, is also part of the philosophy behind the autonomous business model. For example, in Tampa, Fla., about 85% of new homes are built by top 20 builders. In Riverhead, N.Y., 84 Lumber’s customers have a focus on largescale custom homes. And in Pittsburgh, 84 Lumber’s backyard, there is a mix of custom, remodel and commercial builders. “Who our customers are depends on where they are,” says Hardy Knox. Customization and convenience is another aspect that drives the dealer. The Eighty Four, Pa.-based company’s focus is always

“For us, it all happens at the store. That’s where we have the most direct access to customers. When we’re planning companywide changes, we first need to make sure that they’ll benefit our individual locations.”

on giving customers what they need, she said. “Today, it’s all about customization and convenience.” About 40% of 84 Lumber’s sales are from special orders. If products and materials aren’t in stock, 84 Lumber will either source them or create exactly what the customer wants through in-house, custom design. Installation and builder services are another core focus: framing, windows, doors, interior trim, siding and insulation are available in more than 50 markets. In total, services account for 15% of sales. Roughly 200 installation mangers oversee what and when 84 Lumber installs while ensuring quality and safety. “Our installation program also supports our manufacturing capability,” Hardy Knox said. “To give customers added benefit, we can manufacture and install wood components as well as interior and exterior doors. We’re constantly evaluating these programs to ensure the highest standards and performance.” Continued on page 20

HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

EVERYONE WITH OR WITHOUT FUR IS SEEKING OUT THE BEST. YellaWood® brand pressure treated products are treated with preservatives (the “Preservatives”) and preservative methods, and technologies of unrelated third parties. For details regarding the Preservatives, methods, and technologies used by Great Southern Wood Preserving, Incorporated, see www.yellawood.com/preservative or write us at P.O. Box 610, Abbeville, AL 36310.

YellaWood® brand pressure treated pine is sought after by all the best builders, especially those with leather tails, buck teeth and nature’s highest building standards. Our proven reputation for having high quality products drives demand for the Yella Tag. The ﬁve-star service and unrivaled support of the YellaWood® brand puts dealers in position to meet their customer’s speciﬁc needs. See how the YellaWood® brand delivers at YellaWood.com.

IF IT DOESN’T HAVE THIS YELLA TAG, YOU DON’T WANT IT.

Ask dealer for warranty details. For warranty or for important handling and other information concerning our products including the appropriate Safety Data Sheet (SDS), please visit us at www.yellawood.com/warranties or write us at P.O. Box 610, Abbeville, AL 36310. YellaWood® and the yellow tag are federally registered trademarks of Great Southern Wood Preserving, Incorporated.

Continued from page 17 Assisting at all levels of 84 Lumber’s business is its investment in technology. “Technology has been one of our biggest recent initiatives. We’re a service provider, so we’re making tech upgrades across our organization — from order processing to installation services — that help our associates give customers a better experience.” Ultimately, improved efficiency is the goal. Two years ago the company brought Chief Information Officer Paul Yater on board to breathe new life into the dealer’s systems and processes: improvements that drive convenience for customers and associates alike. Hardy Knox says 84 Lumber is working on additional enhancements that will help the company be more productive, competitive and agile. “It’s an exciting time at 84,” she said. But perhaps driving most of the success is the agility and flexibility within the company’s culture along with finding the right associates to fit that culture. When a recent competitor closed its doors in southern New Jersey, 84 Lumber brought in many of the dealer’s former employees. “It’s not rare to face some obstacles when integrating new associates, but our team provided the necessary support to make the process as easy as possible,” Hardy Knox says.

Pro Pursuit Michael Tummillo

Senior Vice President and General Merchandising Manager Lowe’s Companies, Inc. Mooresville, N.C.

s Lowe’s senior VP and general merchandising manager of building products, Mike Tummillo has applied a guiding hand to some of the biggest changes Lowe’s has made in years — especially when it comes to the critical task of serving professional contractors. The SVP — a company veteran since 2004 who brings 30 years of retail experience to the table -- says sales to pros account for about 20% to 25% of Lowe’s total business. And he points out that the overall pro marketplace is as large as $350 billion in annual sales across a very fragmented market. “We have room to grow our market share in the pro segment by improving our assortments, inventory depth and services to this critical customer segment,” Tummillo said. “There is an incredible opportunity to create our own tailwind with the pro.” Tummillo took on his current role in 2018. He is responsible for merchandising strategies for the retailer’s lumber and building materials, millwork, rough plumbing and electrical divisions. Over the past six months to a year, he says Lowe’s has undertaken major efforts to better serve the pro. “We’ve enhanced pro customer engagement by delivering convenience,

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

expertise, efficiency and consistency of pro services,” he said. All store locations have a dedicated Pro Team to manage its pro business. Additionally, Lowe’s pro sales associates meet customers at their jobsite, office or facility to help them with their business needs. Adding another layer of service, the company recently hired dedicated pro loaders and management-level supervisors for all Lowe’s ProService desks and departments. Supervisors are responsibly solely for pro sales and service in the store. New dedicated pro parking spots have also been added to pro entrances to speed up the purchase process for professionals. Lowe’s pro customers include repairers, remodelers, renovators, tradesmen, builders and property managers. The size of their companies range from local businesses to multi-national corporations.

Another aspect of the transition has been a continued investment in inventory. On the product side, Lowe’s is continuing to invest in job lot quantity inventory depth and key national brands that pro customers know and trust. “Pros can rely on our stores to have the products they need, in the quantities they need, when they need them,” Tummillo explains, noting that all U.S. stores recently added inventory depth in the most frequently purchased core pro items, like lumber and building materials, rough plumbing and electrical, and flooring. “These investments are already paying

“We have room to grow our market share in the pro segment by improving our assortments, inventory depth and services to this critical customer segment,” Tummillo said. “There is an incredible opportunity to create our own tailwind with the pro.”

HBSDealer.com

The Advantage of

Leadership

For today’s building material suppliers, and for years to come. LBM Advantage has shown vision and courage by bringing together three major buying groups in the span of three years, merging them into one powerful collective. These member dealers gain a whole new level of purchasing power and industry expertise.

And we’ve just gotten started. The NextGen organization recently established by LBM Advantage is now bearing fruit. Tomorrow’s leadership is getting the professional training and networking opportunities that will allow them to lift their companies to new heights. With its annual NextGen conference and an expanding slate of instructional events, LBM Advantage is shoring up the industry’s future.

The advantage continues to grow.

LBM Advantage’s expansion westward is further proof that the cooperative is on the move, ensuring that the collective power of our members will reach from coast to coast. Building leaders. Creating a competitive advantage. We never stop working for the members we serve.

For information on joining LBM Advantage, call 1-845-564-4900. To learn about the NextGen organization, email nextgen@lbmadvantage.com.

Mentoring Talent Meagan McCoy Jones President and COO McCoy’s Building Supply San Marcos, Texas

dividends with customers.” In today’s world, convenience and technology go hand in hand. As pros lean into tech to improve the efficiency of purchasing products, Lowe’s said it is ensuring that its capabilities meet customers’ needs. The company is leveraging its digital platforms to enable more seamless purchasing and fulfillment experiences. “Simple things like ensuring customers have visibility to our inventory depth at their fingertips is critical to a pro’s decision on where they purchase their products,” Tummillo said. “In the past, we’ve been a convenience supplier and a second choice for pros due to our inconsistent inventory position and speed of service. With changes in service and inventory depth investments, we can win customer loyalty and gain market share. We’re confident that combining convenience, buying power and quick, consistent service is key to winning the pro,” Tummillo said. “For more than a decade, Lowe’s has been the home improvement destination of choice for the light DIY customer — the more casual DIY customer who likes to do smaller home improvement projects themselves but needs help in determining product selection,” Tummillo says. “However, we knew we couldn’t achieve our growth ambitions without being a better supplier to the pro customer.”

cCoy’s Building Supply is proud to promote from within — part of the pro dealer and farm and ranch retailer’s “Born to Build” culture. An important component of the culture is McCoy’s Management Development Program, which provides mentoring for trainees to eventually become store managers. Meagan McCoy Jones, who last December was promoted to president and chief operating officer of McCoy’s, describes the management program as “robust.” The essential mechanics of management training at McCoy’s calls for store managers and company leaders to mentor rising talent. In fact, each trainee has a regional mentor who helps facilitate and validate skills and growth of the trainee. “Our mentorship program means all our team members are involved in their own and others’ growth. That’s the key — we’re all working to learn more and lead better together,” McCoy Jones told HBSDealer. Once a trainee is promoted to assistant store manager, he or she continues to receive the mentorship of their store manager and regional mentor. Mentors are armed with a list of skills to “check off” as the skills are learned and applied. The highest level skill is the ability of the the trainee or assistant manager to take on the role of mentor, by developing confidence and proficiency in each skill on the list. McCoy Jones says a component of the

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

“Our mentorship program means all our team members are involved in their own and others’ growth. That’s the key — we’re all working to learn more and lead better together.” Management Development Program is BAU, or “business as unusual” training. “BAU recognizes that we must add value to other people as much as we add value to the financial performance of our company,” she said. “We start with the premise that we all have relational needs — respect, security, appreciation, comfort — and it is our responsibility as leaders to know and to meet the relational needs of our team and our customers. “You can’t give what you haven’t received, so if we want our customers to feel respect,

we must start with respect to our team members. We’ve been actively training our leaders and team members in BAU for over 20 years. Our culture is the result of this commitment that starts at the top and has been consistent for two decades plus.” McCoy Jones says the company’s culture starts at the top with her father: CEO Brian McCoy. “If you want a strong culture, you must be unwavering in your standards,” she said. “We hold our leaders to a high standard at McCoy’s, and no one is exempt from those standards, regardless of your financial contributions or your place on the organizational chart.” The company operates a “blended business” serving independent builders, repair and remodel contractors and tradesman, farm and ranch enthusiasts, and retail consumers. “This strategy of a ‘blended business’ plan isn’t new, but our tracking and pursuit of these customers continues to be refined,” McCoy Jones explained. “We are most successful in a market when we’re doing business with customers across all these categories.” Another aspect of the business is ecommerce and McCoy’s connectivity to its customers. “I imagine all of us have a healthy respect for the impact of online retailing on our businesses,” she said. “We have prioritized investments that deepen our connection to retail customers and improve our delivery service and communication with customers. “The trend for more and more customers to want delivery for their projects supports our strategic plan of continuing to make this easier.”

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National Fine Tuning Chad Crow

President and CEO Builders FirstSource Dallas, Texas

ne of the premiere heavyweights of the pro dealer ranks, and one of just two dealers that are publicly traded, Builders FirstSource has focused on operations-excellence initiatives in recent years that have helped drive profits. Overseeing the improvements, along with roughly 15,000 employees and 400 locations in 39 states, is Chad Crow, president and CEO at BFS. “We are seeing a positive impact from our operational excellence initiatives, which is in part fine-tuning the business, as well as from investments in our component manufacturing capabilities and our sales force,” Crow told HBSDealer. The results can be seen in the company’s recent quarterly earnings reports. In the fourth quarter of 2018 — reported this past February — BFS swung to a profit with net earnings of $52 million,

compared to a net loss of $42.7 million for the same period in 2017. And in the first quarter of this year, BFS profits jumped 54% to $35.7 million, on sales of $1.7 billion. Recent moves by the dealer include a delivery optimization initiative, which allows BFS to be more efficient from a logistics standpoint. Upgrades have allowed for increased transparency with its customers, including expected delivery times and delivery notifications, in addition to images of

“We believe our role within the industry is first and foremost to operate in an ethical manner and be the best partner we can be to our suppliers and customers. I also believe we have a responsibility to help lead the industry forward when it comes to innovation and doing our part to provide quality, and affordable, housing to homebuyers in the markets we serve.” 24

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delivered materials. BFS also recently launched a customer portal, allowing customers to view orders, statements and make payments online. Given the scope of BFS, Crow said his company has an important position in the industry, particularly when it comes to one of the biggest issues impacting the housing industry in the past year: housing affordability. “We believe our role within the industry is first and foremost to operate in an ethical manner and be the best partner we can be to our suppliers and customers. I also believe we have a responsibility to help lead the industry forward when it comes to innovation and doing our part to provide quality, and affordable, housing to homebuyers in the markets we serve,” Crow said. “We certainly believe we are one of the biggest in the industry and one of the best at what we do, but that does not mean there are not some very good, smaller operators out there as well.” Among recent obstacles BFS has had to overcome include the labor shortage that impacted much of the industry. But the dealer also believes that shortage can be an advantage for segments of its business. “Labor shortages are still an issue across various positions within the company, but this seems to have eased a bit over the past year,” Crow said. “Unemployment remains at very low rates and labor remains tight. While this can create various issues across the construction chain, we also believe it plays very well into our component, off-site build capabilities.”

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Training for Changing Times Gary Nackers

Vice President of Lumber and Building Materials Do it Best Corp. Fort Wayne, Ind. In 2018, Do it Best Corp. reached sales of $3.7 billion, up 14% over the prior year. Lumber and building materials are a key ingredient to the Fort Wayne, Ind.-based cooperative’s success and growth. The member-owned buying group continues to promote itself as the only U.S.-based fully integrated hardware, lumber, and building materials co-op. “As the only total solution provider, we offer independent lumber dealers the ability to source all of their lumber and building materials coupled with worldclass distribution of a full range of hardlines to meet all their customers’ needs,” says Gary Nackers, VP of lumber and building materials at Do it Best Corp. In addition to purchasing power, Do It Best’s LBM industry experts provide the fine-tuning of purchasing strategies to the co-op’s members. “The industry is changing at a rapid pace,” Nackers said. “Emerging from the great recession, industry consolidation has become the new norm. This requires us to be more agile as we look for opportunities to grow our membership and enhance their

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relevance in the industry.” Among recent challenges, transportation and pricing volatility in commodities have had an impact on buying patterns. According to Nackers, the co-op has helped members find success in this new environment by supporting initiatives like speed to market, inventory on hand, cash flow, and the ability to lock in pricing on projects. Education is another component provided by Do it Best. Intense, three to fourday sessions are provided for newcomers to the industry along with the co-op’s Leadership Development Institute, which provides managerial insights and

“The industry is changing at a rapid pace. Emerging from the great recession, industry consolidation has become the new norm. This requires us to be more agile as we look for opportunities to grow our membership and enhance their relevance in the industry.” education for up-and-coming industry leaders. Seminars at Do it Best markets, panel presentations, and roundtables are also part of the ongoing learning package. “One of the biggest changes we’ve made to the Do it Best LBM program over the last couple of years has been our focus on training and

education,” Nackers said. “We’ve invested specifically in the launch and growth of ‘LBM School.’ We’ve designed this program to train the next generation of independent dealers, providing them with the foundation of knowledge to excel in their markets.” With the labor shortage is playing a huge role in the LBM industry, contractors are looking to Do it Best members for help, including value-add services that make their crews more efficient. “Many of our members are seizing the opportunity by offering turn-key operations for their contractors, supplying options like truss manufacturing, installation services, cabinet installation, and more,” Nackers notes. Not only is the labor shortage impacting contractors, but it’s also affecting the co-op’s dealermembers. With a smaller available talent pool, new employees require top-notch training to be most effective. It’s another aspect where Do it Best’s education opportunities come into play Do it Best has also increased its use and reliance on business intelligence. The company is developing prescriptive analytics that focus on helping members anticipate industry swings and plan accordingly. “Using data allows us to optimize our partnership with vendor mills supplying our members with a better mix of products at the right times,” Nackers said. “While our industry can be slightly reactionary, our team is focused on using the data to make more proactive decisions.”

HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

MARKET INSIGHTS

Consolidation and You, Updated for 2019 By Paul Hylbert consolidation is remarkably similar. There continue to be many larger firms acquiring smaller ones. Some of the names are the same, and many are different. The biggest of the big are larger now, with ABC hitting $10 billion-plus in sales in 2018. (ProBuild in 2006 hit $6 billion.) But the market share of the top 10 firms, is The author tackled just a bit higher now the consolidation at 12% than it was 13 topic in the Jan. 24, 2005 issue of Home years ago at roughly News, M+A activity continues to make the 10%. Independents of Channel the forerunner of news in our building products distribu- all shapes and sizes HBSDealer. tion business, so Ken Clark asked me continue to be the to take a look back at an article I had predominant players in written 14 years ago for his publicathis fragmented segment of industry. tion, then called Home Channel News. There’s also more diversity now So, has anything changed? Are among the larger players. The specialty there major differences in the busiroofing guys have gone into gypsum, ness climate today than in the one we the gypsum guys have gone into insuremember way back when? lation, and some LBM distributors are Other than the dramatic changes into just about all product lines (except in technology which impacts the way plumbing, HVAC and electrical). we do business, the climate around What’s happened to our customer base? After shrinking significantly during our housing Top Ten Players downturn, the biggest of the big builders are again pushing 2005 2018 40,000 to 50,000 starts, right Rinker ABC where they were back in 2008. Pro-Build Builders FirstSource The difference today is that Stock Beacon instead of building 1.8 million 84 BMC to 2.0 million homes per year, BMC 84 we’re only building 1.3 million. ABC US LBM That disparity creates a situation Builders FirstSource Allied where the larger builders have Bradco GMS gained share, but almost entirely Allied SRS Distribution in the top 100 markets. Hope Lumber Foundation So, consolidation continSource: Home Channel News/HBSDealer ues to be a factor on both the Editor’s note: The more things change, the more they stay the same. Or do they? With the mergers of BMC and Stock, Builders FirstSource and ProBuild and a steady stream of acquisitions in the news, it certainly seems like consolidation is raging. We turned to Paul Hylbert, of Kodiak Building Partners for a deeper analysis.

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customer and distributor segments of our business, even though our industry remains highly fragmented. What does that mean for us as dealer/distributors? Depending upon your position in your market, maybe not a whole lot. If you’re operating in rural markets, serving smaller homebuilders, or focusing on the repair and remodeling market, then consolidation may not have much of an impact. Even then, as the big specialty distributors continue their expansion into ever smaller markets, you will probably have the likes of an ABC, SRS, GMS, Beacon or Foundation acquire or open near you — if they haven’t already. And then there’s always Amazon. It’s already a large player in hardware, tools and many other products we

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2005 2018 TOTAL SALES OF TOP 10:

TOTAL SALES OF TOP 10:

$27,728,000,000 $39,898,000,000 NAICS 4441

NAICS 4441

$288,746,000,000 $325,860,000,000. MARKET SHARE OF TOP 10

MARKET SHARE OF TOP 10

9.6% 12.2% Source: Commerce Dept./Home Channel News/HBSDealer

sell. If they can solve home delivery of groceries, can they solve jobsite delivery of building products? Or would they rather not invest in this dirty, dusty, cyclical, low margin business of ours? The good news for all of us is that ours is a business where effectiveness at the local level is most critical to success. Building codes, product tastes and requirements, and construction practices vary significantly by market, and that makes the strength of the operating team at the local level the big driver of success. What works in Laredo won’t always work in Roxbury. But strong people with the authority to tailor the assortment of products and services must be present for success. Drivers of consolidation will remain, and not just because the big want to keep getting bigger. Many of us, starting with yours truly, are not getting any younger. In fact, our industry has done a poor job in general of preparing our people to take over our businesses. So now, perhaps in the late innings of the current housing cycle and with no family members ready to take over our company, an owner looks for an exit strategy. On the other hand, the larger firms, many of which are publicly traded or privately funded, need to grow shareholder value. And one way to do that is to acquire another dealer or distributor. Big isn’t necessarily better, but the desire to grow earnings and cash flow propels these companies toward acquisition of competirtors. These forces are at work on the local level, too, as smaller companies are quietly making their own acquisitions. Against this background, a long-time M+A professional well into his fifth decade in the business commented recently: “I’ve never been busier. At my age I should be slowing down, but the market won’t let me.” The bottom line is that consolidation is not necessarily good or bad. What’s important is to recognize it’s happening (and will continue) and then decide how to best address it. HBSD In 2005, Paul Hylbert was CEO of Lanoga Corp. Today, Hylbert is the chairman of Kodiak Building Partners, which he helped create in 2011. Kodiak manages a diverse portfolio of building material companies in 71 locations around the country. For more information, visit www.kodiakbp.com.

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HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

PRODUCTS

‘Made in USA’ raises its voice An unscientific but highly patriotic poll of HBSDealer readers found that the plurality of respondents were more excited about the “Made in USA” feature of the recent National Hardware Show than its other headline topics. After more than 60 votes, the top three vote getters were: • Made in USA: 38% • New Product Launch: 25% • Tailgating/Backyard: 13% Though the sample size lacks the strength to close the argument, there are several voices in the industry that aren’t surprised by the strong showing of enthusiasm for Made in USA products. And with every tariff-related headline, domestic manufacturing looks a little more attractive to the industry.

“As a company that employs 650 people, Made in USA tools mean jobs for all of those folks,” said Tim Yates, communications and multi-media manager for The Wooster Brush Co., with manufacturing in Wooster, Ohio. “While the economic crisis that began in 2008 placed a spotlight on companies like ours making domestic goods, it has always been important to us. Over this last decade, we’ve been thanked by more retailers and painters than ever before for making tools here in the States.” Camp Hill, Pa.-based AMES is not only energized by its domestic manufacturing, it also promotes the fact that it’s the third oldest continuously

operating brand in America. “I think being made in the USA is a huge advantage,” said Karen Richwine, director of marketing operations. “You may hear more about the subject today than in years past, but it’s always been an advantage for us, and it’s one that we’re proud of.” In addition to benefits of supply chain simplification and pocketbook patriotism, there’s also the advantage of internal moral, she said. “There is pride in the staff everywhere — from the factory floor to the office,” Richwine said. That attitude is also in evidence at Channellock, which for years has promoted its slogan of “Fiercely Made in Meadville, Pa.” The topic of Made in USA products generated interest at the recent Do it Best May Market. “Obviously, everyone is looking for the best solution,” said Rich Lynch, Do it Best Corp. VP of merchandising, during a media event at the co-op’s Indianapolis Continued on page 34

Examples of Domestic Manufacturing

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SPONSORED BY

NEW PRODUCTS Orca 20 qt. cooler All of this company’s hard-side coolers are made in the USA, including this “Thin Blue Line” version of the 20-quart storage-capacity cooler. With durable, roto-molded construction, the product features integrated insulation for maximum heat/cold retention. The cool, whale tail lid gasket ensures a perfect seal, the company says. And check out the easy-flow drainage spout. Orcacoolers.com Made in Streetsboro Ohio

EZPole Flagpoles There’s a saying at EZPole: If you want to fly an American flag, why not fly it on an American-made flagpole. The Liberty EZPole Series, shown here, features a telescopic pole with a twist-and-button-lock system. The “No Drop Posi-Loc” duallocking system prevents pole collapse. And a 360-degree “No Wrap” swivel and button system allows the flag to fly freely without wrapping or getting tangled around the pole. The pole adjusts to heights of 9 feet and 6 inches to 21 feet of rustfree, polished aluminum tubing. Ezpole.com

Malco TurboShear Step up to heavy-duty metal-cutting performance with a 16-gauge (1.52 mm) capacity TurboShear metal cutting drill attachment from Malco Products. The Model TSA2 TurboShear Drill Attachment makes a power drill a powerful metal-cutting shear, instantly. Cutting applications include construction mild grade steel. The model TSA2 attachment option is an ideal accessory for cordless drills and features an aluminum shear head and telescoping drill clamp for sure one-handed control. Malcoproducts.com Made in Annandale, Minn.

Made in Eastlake, Ohio

Wooster Super/Fab roller cover

Channellock Speedgrip plier The SpeedGrip tongue and groove pliers are “fiercely made in Meadville, Pa.,” as the slogan goes. The 10-inch model shown here features a fast, non-slip adjustment mechanism — just push the blue button to adjust the jaws. Meanwhile, the company’s Crosshatch teeth bring a stronger grip to any project. The forged-inthe-USA high carbon steel is coated for optimum rust prevention. Channellock is a national partner of the Homes for our Troops program. Channellock.com

The Wooster Brush Co., founded in 1851, has a long history of innovation in paint brushes, and is also the first to introduce (in 1964) synthetic fabrics for roller covers. Super/Fab roller covers feature a proprietary golden yellow fabric that provides exceptional capacity with flat or satin paints, stains or waterproofing. The product resists matting for complete coverage and smoother results. Woosterbrush.com Made in Wooster, Ohio.

Made in Meadville, Pa.

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

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Reciprocating Saw Blade Kit From Imperial Blades, this “Made American Tough” kit features a variety blades for common applications. The company is credited as the original inventor of the universal shank for use on oscillating multi-tools. And these reciprocating blades round out an extensive cutting accessory collection. The recommended applications of the kit include metal, wood and nails, fiber cement, wood and PVC. Imperialblades.com

Bon Forged Masonry Trowels There are more than 45 new Keystone Forged Masonry Trowels by Bon, all precision-forged from a single piece of specially formulated carbon steel. The manufacturing process has its advantages — adding consistent strength throughout, eliminating internal voids in the blade. Each is tapered ground to provide elasticity over the whole blade. It is the elasticity and flexibility of the trowel that protects workers’ joints and reduces fatigue. Bontool.com Made in Gibsonia, Pa.

Haas Door Select View

Made in Sun Prarie, Wis.

DaVinci Roofscapes

With operations throughout North America, Scepter has manufactured containers for the consumer, marine and military markets for almost 70 years. The company’s newest line of products, the Scepter SmartControl fuel containers, is made in Miami, Oklahoma. Available in one-, two- and fivegallon sizes, the easy-to-use SmartControl line includes containers for gasoline, diesel and kerosene. Scepter.com

Headquartered (and made) in Lenexa, Kansas, DaVinci Roofscapes celebrates 20 years in business in 2019. During those years the company has become a leader in manufacturing composite slate and shake roofing materials. Earlier this year the company launched a line of DaVinci Hand-Split Shake Siding. Realistic-looking and durable, all DaVinci composite products are made of virgin resins, UV and thermal stabilizers, plus a highly-specialized fire retardant. Products resist fading, cracking, splintering, severe weather, high winds and fire. Davinciroofscapes.com

Made in Miami, Okla.

Made in Lenexa, Kan.

Scepter gas container

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Located in Wauseon, Ohio, Haas Door manufactures aluminum and steel garage doors for both residential and commercial applications. A variety of customizable options are available, including privacy glass for windows, impact-resistant features and superior energy efficiency garage doors. Founded in 1954, the family-owned company holds memberships in IDA and DASMA, and produces products that are sold throughout North America. HaasDoor.com Made in Wauseon, Ohio

HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

PRODUCTS Continued from page 29

market. “In some cases that solution might be getting back to Made in USA. And we’re seeing a movement to that effect. I wouldn’t call it an avalanche, but we’re seeing movement.” As consumers look for best solutions, he said vendors are looking for best alternatives and weighing the factors about where to place their facilities. Lynch added: “I think at some point, people will think about where their facilities are located and where they should be. And maybe that’s China, and maybe that’s not. But right now, it seems to me that not being in China would make everyone’s life easier than being in China.” The idea of bringing manufacturing facilities back to the United States has its converts. For example, consider Malco’s return to DeWitt, Neb., in October of 2018. “We are proud to re-open the plant

34 Untitled-1 1

and bring manufacturing jobs back to DeWitt, and the United States,” said Malco Products president and CEO Mardon Quandt at the time. “As our company continues to expand, we were looking for an opportunity to add a new locking pliers product to our line-up and sought a location that had the infrastructure that would allow us to ramp up quickly, create jobs and make an impact on the local community. We found all of that and more in DeWitt, and are excited to once again put the skilled workers who live in and around DeWitt back to work.” More recently, Stanley Black & Decker, the world’s largest tool maker, said it will soon begin construction on a major manufacturing plant in the AllianceTexas development in Fort Worth. The plant — which will employ

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

Sign of the times at the Warp Brothers booth in Las Vegas.

approximately 500 people and encompass 425,000 square feet — is scheduled to begin construction this summer and finish in late 2020. The facility will serve the company’s Craftsman tool brand, which it acquired in 2017. The Made-in-USA trend showed strength at the recent National Hardware Show in Las Vegas, where more than 80 companies exhibited in a special, Madein-USA product display area. The show included an awards event for American manufacturers. “Manufacturing products that are made in America is becoming increasingly important to conscientious consumers,” according to the organizers of the awards event.

HBSDealer.com 4/20/2017 9:56:39 AM

NEW PRODUCTS

Win, Place and (National Hardware) Show Three diverse products impress the diverse panel of judges in Las Vegas. LAS VEGAS — The three winners of the NHS Awards contest in the hardware-and-tools category have nothing in common — except innovation. The winners were selected at the National Hardware Show in Las Vegas, where each enjoyed a trip across the stage. A thermoplastic tape strip for household repairs; a tie-down kit that uses suction to anchor to a car’s rear window; and a protective tent for outdoor generators earned third, second and first place, respectively, in the NHS Awards contest. A panel of buyers, distributors and assorted home improvement experts walked the Las Vegas Convention Center in search of stand-out products in the hardware-and-tools category. The judges included new media, old media and representatives of traditional distribution channels. They were: Paul McNally, Distribution America; Jason Stofleth, Do it Best; James and Morris Carey, the Carey Brothers radio show; Ed McKinney, Wallace Hardware; Zack Giffin, Tiny House Nation; Alex Fernandez, Ace Hardware; Stanley Genedek, “Dirt Monkey;” Jeff Styerwalt, PRO Group; Brian Stearns, Ringofire Digital. Here are the winners.

FIRST PLACE The GenTent Stormbracer from GenTent Canopies. The product fits and protects thousands of generators of 3,000 to 10,000 watts.

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SECOND PLACE The Stanley Universal TieDown Kit, from BCS International. The product securely holds car loads in place with the aid of a powerful suction device.

THIRD PLACE Forj Thermoplastic Tape, from ResinFiber. Described as the world’s strongest and most adaptable repair material. Just heat it, and tape it — or shape it.

HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

MARKET INSIGHTS

Hancock Lumber’s full-circle expansion By Andy Carlo It’s been a busy spring for Hancock Lumber, to say the least. The pro dealer opened two new showrooms in Maine— one in Yarmouth and another in Windham — and in May it opened the doors to its new headquarters in Casco, Maine. The Hancock Lumber Kitchen Design Showroom in Yarmouth opened in December and celebrated a grand opening in April, enhancing the location where Hancock has maintained a yard presence since 1984. The Windham showroom came

online in February. Hancock plans another ribbon-cutting ceremony for the Windham showroom in June. Following the latest expansion moves by Hancock, the company now operates nine yards, seven kitchen design showrooms, its Mainely Trusses truss plant, and three Eastern White Pine sawmills. As if the company wasn’t busy enough, May 14 was the first official day at Hancock Lumber’s new Casco headquarters. Located about 3.5 miles down the road from its previous headquarters, the new facility marks a return to a campus environment for

Inside the Hancock Lumber Kitchen Design Showroom in Yarmouth.

Peparations for the new headquarters in Casco.

the New England pro dealer. The new headquarters are located across the street from a Hancock Lumber sawmill

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and adjacent to the Casco yard. The new offices house 20 corporate employees in an 8,000-square-foot space. The exterior siding on the new building features Hancock pine manufactured right across the street. Kevin Hancock, president and CEO of Hancock Lumber, reflected on the history of the company — and how it ties together with the latest moves — in an e-mail sent to company employees. “In a way, the company will come full circle tomorrow,” he wrote back in May. “You see, there was a time when the entire company was located here on the edge of the Edes Falls Road. The sawmill was on the pond to the right. The store was in front by the road. The long center of the building was filled with pine bins and other building materials. The planing mill was located just up the road past the cemetery. Continuing down the

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Edes Falls Road past the building you entered company timberlands. It was all right here. This was, in its day, the entire company. I remember as a small boy running down the same narrow halls we use today to visit my grandmother as she extended the handwritten billings and turned them into invoices to be mailed. “Slowly, the company branched out,” he continued. “First the sawmill moved over to Route 11 in Casco, and then the retail store moved up the street — eventually moving to Bridgton. Today, just the corporate office is left, but there was a time when this was all of Hancock Lumber. Now, as the office team moves to Route 11, we are completing a circle generations in the making. The new home office is rejoining the modern business of manufacturing, retailing, and logistics. Casco is going to have one Hancock Lumber campus again.”

Hancock Marketing and Communications Director Erin Plummer describes the new offices as an “architecturally-driven, modern building.” “It has been all positive growth and reinvestments for Team Hancock — a tribute to the energy, enthusiasm, and focus our employees put in every day they come to work,” Plummer told HBSDealer. “And there are more exciting moves to come,” she added. The company recently submitted its building plans for a new yard on an 11acre site in Saco. An opening is expected in 2020, according to Plummer. Last year, Hancock Lumber was named one of the “Best Places to Work in Maine” for the fifth-consecutive year. The award is presented by the Society for Human Resource Management - Maine State Council (MESHERM), and Best Companies Group.

HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

MARKET INSIGHTS

On Leadership. How to recognize it. How to hire it. By Tony Misura

“However beautiful the strategy — you should occasionally look at the results.” — Winston Churchill

Builders Millwork (BMI) is a $20 million company headquartered in the heart of the Dairyland — Mondovi, Wis. I first met Jerry Jehn, the owner, in 2008 Walking into his office, I was greeted by a life-size Wisconsin Bucky Badger Football player Fathead leaping off the wall. BMI is a great company with great people, providing architectural door and hardware products to general contractors focused on multi-family new construction projects in the upper Midwest. Its model has supported a 15% growth rate year-over-year for the past 10 years. Here’s the shocking aspect of their business model — they have no sales team. Can you imagine your competitive edge being so great that you have no need for a sales team? The BMI team not only imagined it, they did it. How do you build a business model without a sales team? Multi-family, commercial projects have been plagued by the “Hardware Room” for decades. The Hardware Room is a single room secured and designated to hold all door locks, hinges, closures and entry hardware needed for the project. One key is handed to the job superintendent to guard.

The Hardware Room approach has proven to be an efficient path to unwanted results: lost products; hardware applied to the wrong openings; and a general time and money suck for everyone, including general contractors, sub-contractors and their suppliers. Jerry and the BMI team developed a solution — presorting the doors, millwork and hardware for each individual unit. A 200-unit assisted living project will receive 200 materials packages, each marked and sorted by unit and

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

phase. Hardware is palletized, allowing for easy and immediate distribution throughout the building and eliminating the need for hardware rooms and empty units for staging product. If units are ready, all materials can be delivered directly to the respective unit. Less time is spent handling the product and the risk of damaged or lost material is minimized. The BMI On-Site Optimization Program, the trademarked name for this process, has become the oxygen their customers need to survive. As a result of the efficiencies, subcontracted installers demand BMI as the preferred supplier on their projects, effectively taking on the role of a naturally occurring BMI sales force. Here’s Jerry’s take: “The BMI Value Proposition is our employees and their Midwest roots. Coming from a largely agricultural, hardworking heritage, our employees realize the value of hard work and are rewarded accordingly. We create an entrepreneurial culture where all employees participate in improving the company. Their opinions matter. Let the employees that are doing the work come up with the solutions. They share in the success and more importantly, take pride in being a part of the success. They take ownership.” BMI is a team. There is no Lone Ranger, swaggering sales persona driving their sales volume. There is no

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salesperson capable of moving their accounts to a competitor. The company’s competitive edge was created by solving a major on-site construction problem, positioning them to operate without a sales team. For the LBM industry in general, BMI’s success raises the question “What are the elements of your offering that are different from your competitors and in high demand?” (Hint: the answer is not “on time and in full” or “customer service.” Jerry is humble. But make no mistake, the quality of the team is a reflection of the people the leader attracts. The competitive edge of the business model starts with a strategic thinking leader. How does a company attract this type of leadership? Very carefully. Here are my six top vetting questions for strategic leaders.

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When have you developed a market competitive edge? A proven history of success is a must. Answers should lead to multiple examples of when the edge was achieved. What did you inherit and what was the result? This must be reported in hard P&L numbers.

What is the process for develop3 ing a market competitive edge? The answer must be focused on collecting facts directly from the customer base and defining the problem or problems to be solved. 4

What is your problem-solving process? Look for collaborative, team-based answers. Be warned if the leader says “I” or “my team” — a clear sign of narcissism.

5 6

What are the common obstacles and how do you navigate them? What have been your biggest mistakes? If a candidate doesn’t have any examples, that’s a clear sign of an egocentric leader, and an instant fail.

If your hiring process does not have multiple leaders in the final stages that score high on these questions, you are likely not accessing the hidden top-tier industry talent.

Tony Misura is the founder and operating leader for Misura Group, providing recruiting services to the building products industry since 1999.

HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

PEOPLE IN THE NEWS Promotions at Do it Best Fort Wayne, Ind.based Do it Best Corp. promoted company veteran Kevin Tindall to regional sales and business development manager. Tindall Tindall will lead a team of territory managers across a region of the western U.S. covering seven states. Together, he and his team will focus on helping existing Do it Best member-owners Sproul grow store sales and profitability, as well as recruit new members. Tindall has served as a territory manager for Do it Best in the western U.S. for the past 10 years. Overall, he has more than 30 years of sales and business development experience focused primarily on the western U.S. Do it Best also promoted Scott Sproul to the post of director of international sales. Sproul most recently served as the company’s national retail performance manager. He joined Do it Best as a territory sales manager in 1999 and will now lead a team of international sales professionals serving hardware retailers in more than 50 countries. Masonite names new CEO Masonite announced that Howard Heckes has been named president and CEO, effective June 3. He succeeds Fred Lynch, who announced his retirement plans last year. Heckes, who

Home Depot CFO changing hands The Home Depot’s longtime Chief Financial Officer Carol Tomé will officially retire from the company on Aug. 31. She was named CFO in May 2001 and is a 24-year veteran of the company. “Carol is not only one of the most Tomé McPhail respected executives in corporate America and an outstanding chief financial officer, but also is beloved by The Home Depot associates,” Craig Menear, chairman, CEO and president of The Home Depot, said in a statement issued by the Atlanta-based retailer. The company also announced that Richard McPhail, senior vice president of finance control and administration, will be promoted to executive vice president and Chief Financial Officer following Carol’s retirement. McPhail has held a number of positions at the home improvement retailer since joining the company in 2005, including director of strategic business development, vice president of strategic business development, and senior vice president of finance. will also join Masonite’s board of directors, currently serves as CEO of Energy Management Collaborative, a privately held company providing LED lighting and controls and IoT conversion systems and service solutions. Previously, Heckes spent nine years in a variety of senior operations roles at Valspar Corporation, most recently overseeing Valspar’s Industrial Coatings portfolio. The executive also held leadership roles at Newell Rubbermaid, including president of Sanford Brands, president of Graco Children’s Products and president of Goody Products. Lynch served as Masonite president and CEO for more than a decade. Olson overseeing ABC’s Mule-Hide ABC Supply Co. promoted Bryan Olson to managing director of its Mule-Hide Products Co. Inc. subsidiary. As managing director of Mule-Hide Products, Olson will be responsible for the complete business performance

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

of the company, which offers lowslope roofing products, including membranes, adhesives, sealants and coatings. Olson fills a roll vacated by Jonathan Shepard, the former president of Mule-Hide, who was promoted to vice president of ABC’s Southwest region. Prior to his promotion, Olson was the director of merchandising and exterior systems for L&W Supply. Olson joined L&W Supply when the company acquired NexGen Building Supply in May 2018. Cheemin Bo-Linn joins BMC board BMC Stock Holdings, Inc., announced that the appointment of Cheemin Bo-Linn to the company’s board of directors. The move expands Raleigh, N.C.based BMC’s board to 11 directors. Bo-Linn currently serves as president and CEO of Peritus Partners, Inc., an international consulting firm

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focused on assisting companies in cyber security resolution, information technology and digital marketing. Earlier in her career, she served as a vice president at IBM where she was responsible for a multi-billion dollar global business in IT infrastructure, software and enterprise storage focused on the distribution and industrial sector. McCoy’s manager lands in Roswell McCoy’s Building Supply has named Raul Avalos as store manager of the company’s Roswell, N.M., location. Avalos started his career with McCoy’s five years ago at the company’s Harlingen, Texas, store working in the lumber yard before taking on roles as a delivery driver and delivery coordinator.

The pro dealer said that his dedication to serving the “born-to-build” customer was evident, and eventually Avalos joined McCoy’s management

development program. Avalos served as assistant manager in San Angelo and San Marcos, Texas, before his promotion to Roswell.

Rogers named Jeske account manager The Jeske Company, a wholesale hardware distributor, has appointed Gary Rogers to the company’s sales team and as the account manager for the north Texas and Oklahoma region. As an account manager, Rogers will be responsible for servicing accounts and developing relationships with customers in the North Texas and Oklahoma area. The company said Rogers brings experience in the building materials industry and familiarity with commercial hardware to his new post. Prior to coming to Jeske, Rogers worked as a sales director for Joe East Enterprises, the parent company of A-1 Locksmith, A-1 Safes and A-1 Security Group.

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HARDWARE + BUILDING SUPPLY DEALER JUNE 2019

Residential Construction/Sales

Monthly Retail Sales, not adjusted

13 months of housing starts and existing-home sales

home centers and pro dealers (NAICS 444) and hardware stores (NAICS 44413)

Total starts

NAICS 444

(in thousands, SAAR) Apr.: 1,235,000 1400

1300

NAICS 44413

(sales in $ billions)

32 25.4

28.4

31.9

2.41 2

25.7

25.4

2.00

2.38

2.13 1.94

1.89

1200

1 10

1100

1000

JANUARY

2018

SOURCE: COMMERCE DEPARTMENT

FEBRUARY

MARCH

JANUARY 2018

2019

FEBRUARY

MARCH

2019

SOURCE: MONTHLY RETAIL TRADE REPORT FROM THE U.S. CENSUS BUREAU

Single-family starts (in thousands, SAAR) Apr.: 854,000 1000

HBSDealer Stock Roundup

950

the percent-change performance of stocks based on May 23 prices

900

850

750

ANNUAL CHANGE

800

SOURCE: COMMERCE DEPARTMENT

Existing-home sales (in millions, SAAR) Apr.: 5.19 million 5.75

5.5

5.25

40 TSCO 35 30 25 20 SHW 15 10 5 BMC DJI HD 0 -5 LOW -10 SWK DE -15 BECN -20 BLDR -25 -30 WY -35 -40 -20 -15 -10 -5 0 5 10

MONTHLY CHANGE 4.75

BECN (BEACON); BLDR (BUILDERS FIRSTSOURCE); BMCH (BMC STOCK HOLDINGS); DE (DEERE & CO.);

HD (HOME DEPOT); LOW (LOWEâ&#x20AC;&#x2122;S); SHW (SHERWIN-WILLIAMS); SWK (STANLEY); TSCO (TRACTOR SUPPLY);

SOURCE: NATIONAL ASSOCIATION OF REALTORS

WY (WEYERHAEUSER); DJIA (DOW JONES INDUSTRIAL AVERAGE)

Consumer Watch Unemployment rate

Consumer confidence

Gas prices

for the entire United States

indexed to a value of 100 in 1985

average price per gallon (regular)

5.0 4.5

100

5.5

$2.50

Current

$2.00 80

6.0

Prior month

120

Prior year

4.0

3.6% 3.5

April

6.5 60

134.1

$2.85

May

May 16

140

JUNE 2019 HARDWARE + BUILDING SUPPLY DEALER

$1.50

$3.00

SOURCES: LABOR DEPARTMENT, THE CONFERENCE BOARD, AAA

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