HBSD-0621 by ensembleiq

JUNE 2021 Vol. 47 No. 6

ORGILL DELIVERS A DC

A distribution empire expands in Rome, N.Y.

Orgill President and CEO Boyden Moore

HBSDEALER HARDWARE + BUILDING SUPPLY

INDEPENDENT PROFILE 18 Michigan’s Sanford Hardware

rebuilds after devastating floods.

PRODUCTS 30 The Outdoor Power

Equipment roundup

32 Innovative trends in building products

MARKET INSIGHTS 34 Made in USA trends 36 Top Women series:

Builders FirstSource’s Evionne Silver

38 Highllights from the ProDealer

Industry Summit

Cover Story: Orgill delivers a DC An inside-the-ropes tour of an expanding distribution empire.

27 One-on-One with Boyden Moore

Retailer Spotlight: Lowe’s at 100

The transformation continues

FROM THE EDITOR

NEWS & ANALYSIS

10 Another big deal in the books 12 J.D. Power’s retail rankings

Comments on the bankruptcy of a disruptive force in construction.

and observations

14 Mass-timber giant files

for bankruptcy

15 Congress is looking at

IN EVERY ISSUE 10 Stat of the Month 12 Product Knowledge 14 News Map 40 People in the News 42 Quikrete Industry Dashboard

$6 trillion, and change

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 in the United States: $110 one year; $200 two year; $14 single issue copy; Canada and Mexico: $130 one year; $235 two year; $16 single issue copy; Foreign: $150 one year; $285 two year; $16 single issue copy; in all other countries (air mail only). Digital Subscription: $75 one year; $140 two year. Periodical postage paid at Chicago, IL., and additional mailing offices. POSTMASTER: Please send address changes to HBSD, Circulation Fulfillment Director, 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631. Copyright © 2021 by EnsembleIQ. All rights reserved.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

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HERE’S WHAT’S ONLINE

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The ever-growing Webcast library Visit HBSDealer.com/webinars for access to a variety of repeat performances, including:

The Store of the Future

Shop talk with the Home Depot Rental

Housing, building products and demographics

HBSDealer Daily Newsletter: plus, the Saturday Edition The HBSDealer Daily Newsletter, the industry’s leading news source, now has a companion: “The Saturday Edition.” Sign up to receive your dose of news and insights at HBSDealer.com. Monday

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Quikrete Industry Dashboard

HBSDealer Poll Question

NPD Stat of the Week

Throwback Thursday

Eye on Retail

The polls are open. Your voice is wanted. HBSDealer publishes weekly poll questions on pressing industry matters, and other topics. For instance:

43%

19%

Masks Encouraged

Masks Required

What’s your mask policy?

Poll questions and results appear every week at HBSDealer.com. Follow us @HBSDealer

38%

Masks Discouraged Source: HBSDealer poll results, 5/28/2021. n=150

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

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FROM THE EDITOR

A construction disruption interruption Katerra was one of the buzzwords during the 2019 ProDealer Industry Summit. The high-tech, off-site construction company aimed to modernize the construction industry on a massive scale. It had Silicon Valley talent and big name investors in its corner, and some of the slickest web sites and marketing videos this side of Hollywood. A compilation of those videos was played during the Summit for an audience of dealers, retailers and distributors who watched (perhaps uneasily) as the big screen graphically erased dealers,

Entekra promotes a Fully Integrated Off-Site Solution (FIOSS).

retailers and distributors from Katerra’s vision of the construction supply chain. (Hats off to 2019 panelist Dave Snyder of Builders FirstSource, who deserves an award for his response: “You can take us out of the supply chain tomorrow. But you can’t take out what we do.”) Fast forward to page 14 of this issue, which reports on the bankruptcy filing of Katerra. “A ha! That ought to put those Silicon Valley hot shots in their place,” we might observe. “You outsiders who think you know all about the homebuilding business might want to think twice next time you butt in,”

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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

Ken Clark Editor in Chief we might suggest, with an air of superiority. We might suggest all of that. But we might be wrong. Katerra certainly wasn’t wrong about the opportunity for modern construction and off-site methods to take root in the U.S. homebuilding sector. Those opportunities and methods were examined during the recent 2021 ProDealer Industry Summit, as forwardthinking suppliers weighed in on “The Benefits of Offsite Solutions.” The panel discussion covered the growth of Ready-Frame high-tech, pre-cut framing packages from Builders FirstSource. It also revealed statistics (from McKinsey Global) showing the decline of U.S. construction productivity since 1995. “The country that put a man on the moon has declining residential construction productivity,” said Gerard McCaughey, CEO of Modesto, Calif.-based Entekra. “It can’t be clearer that there is a big problem.” McCaughey has been on a careerlong crusade to “bring modern methods of construction to the U.S. construction industry.” Think of it this way. Would you want your car manufactured in a factory, or would you want the parts shipped to your front lawn and have “five guys come in a pick-up truck with welding gear to put it together?” he asked. And to those who say they’ve tried panels and cranes in the past, with unsatisfying results, Dean Rana, president of Phoenix-based Truss Fab Companies, offers this observation: “Software is better. Talent is better. And equipment is better. We’ve come a long way.” Rana added: “Everybody is trying to do their part to build smarter. It’s going to happen.” Katerra ran out of steam. But the hightech off-site trend has not. Tell us what you think at news@hbsdealer.com. HBSD

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

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 AUDIENCE

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SENIOR VICE PRESIDENT, OPERATIONS Derek Estey destey@ensembleiq.com, 877-687-7321 DIRECTOR OF PRODUCTION 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 MARCH 29-APRIL 2, 2022, WASHINGTON, D.C. WWW.PRODEALER.COM IN PARTNERSHIP WITH THE NLBMDA, WWW.DEALER.ORG CONTACT: AMY PLATTER GRANT agrant@ensembleiq.com, PDIS DIRECTOR OF SPONSORSHIPS PERMISSIONS: NO PART OF THIS PUBLICATION MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS, ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPY, RECORDING, OR INFORMATION STORAGE AND RETRIEVAL SYSTEM, WITHOUT PERMISSION IN WRITING FROM THE PUBLISHER. FOR REPRINTS, PERMISSIONS AND LICENSING, PLEASE CONTACT WRIGHT’S MEDIA AT ENSEMBLEIQ@WRIGHTSMEDIA.COM OR (877) 652-5295.

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF INNOVATION OFFICER Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several SENIOR VICE PRESIDENT, CONTENT Joe Territo

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True partnership means being there when times are at their toughest. Thank you for standing with Charlotte Pipe during the uncertainty of 2020 and beyond.

NEWS + ANALYSIS

Another big deal in the books In the latest, but likely not the last, mega move between pro dealers, US LBM will acquire American Construction Source. American Construction Source’s portfolio consists of multiple locally branded building material distributors and manufacturers, operating more than 70 locations in Arizona, Arkansas, California, Colorado, Minnesota, Missouri, Nevada, Washington and Wisconsin. The company is backed by Angeles Equity Partners, LLC and Clearlake Capital Group, L.P. US LBM has completed more than 65 acquisitions since it was founded in 2009, including four since being acquired by Bain Capital Private Equity in late 2020. On May 3, US LBM announced the acquisition of

“With the addition of the ACS portfolio, US LBM will strengthen our position in the Midwest and California, and expand our reach to Colorado and Washington, two quickly growing construction markets.” — L.T. Gibson, US LBM President and CEO

Higginbotham Brothers, a building products dealer with 40 locations in Texas and Oklahoma. “With the addition of the ACS portfolio, US LBM will strengthen our position in the Midwest and California, and expand our reach to Colorado and Washington, two quickly growing construction markets,” said US LBM President and CEO L.T. Gibson. “We look forward to working with the ACS team and their local operators to continue leveraging their strong relationships, experience and teams to grow in their respective markets.” Upon completion of the acquisition, US LBM will operate nearly 400 locations nationwide. Financial terms of the acquisition were not disclosed. “ACS joining US LBM is a perfect outcome based on the alignment of our shared strategy to preserve longstanding local lumberyard

brands and operations while delivering a great customer experience,” said James Drexinger, CEO of ACS. American Construction Source made a splash when it was launched in 2018 with the acquisition of more than 50 Meek’s Lumber locations in Missouri, California, Nevada and Arkansas. In 2020, the company made more noise with the acquisition of Homewood Holdings LLC. Since its inception nearly three years ago, ACS made 9 key acquisitions altogether. This transaction is expected to close during the third quarter of 2021 and is subject to customary closing conditions, including requisite regulatory approvals.

“ACS joining US LBM is a perfect outcome based on the alignment of our shared strategy to preserve longstanding local lumberyard brands and operations while delivering a great customer experience.” —James Drexinger, CEO of ACS.

STAT OF THE MONTH That’s the price of a 7/16” sheet of OSB at the end of the first quarter at Home Depot. The price is almost four times the price of the same sheet of OSB at the end of the first quarter in the prior year (about $9.55). Source: Home Depot Q1 earnings call.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

NEWS + ANALYSIS

Ranking the retailers, again The latest J.D. Power U.S. Home Improvement Retailer Satisfaction Study assigned index ratings to four big names – and only four big names — in home improvement. The study once again gave the highest rating to Ace Hardware. The 2021 U.S. Home Improvement Retailer Satisfaction Study measures customer satisfaction with home. improvement retailers by examining

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five factors (in alphabetical order): in-store experience; merchandise; online experience; price; and staff and service. The study is based on responses from 2,172 customers who purchased home improvement related products from a home improvement retailer within the previous 12 months. The study was fielded in JanuaryFebruary 2021. The following brands received the following scores: Ace hardware 863 Menards 836 Lowe’s 824 The Home Depot 819 J.D. Power said the study was llmited to the four companies above. The results marked the 14th time in 15 years that Ace received top honors from the J.D. Power study. Said John Venhuizen, president and CEO of Oak Brook, Ill.-based Ace Hardware Corporation. “We are very proud of our small—mostly family run businesses—who live the Ace core values every day, and truly make Ace stores the best, most helpful hardware stores rooted in neighborhoods across the country.” Ace also received top honors in the 2020 study. In 2019, Ace and True Value tied for the highest ranking. Menards took top honors in 2018. In addition to its retail brand rankings, J.D. Power released general home improvement findings from its study, including:

Nearly one-third (30%) of U.S. consumers say they are either planning or actively working on a home improvement project.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

Just 13% of home improvement retailer customers say they purchased products via a retailer’s website, while 87% shopped in a brick-and-mortar location. Of the 87% who shopped in a store, 98% say they felt safe and comfortable while shopping during the height of the pandemic.

Customers don’t want to have to spend more than five minutes finding an item or aisle. Fortunately, 66% of customers say their home improvement retailer met this threshold.

Overall satisfaction among Gen Y and Gen Z customers averages 842 (on a 1,000-point scale) while overall satisfaction among Gen X and Boomers averages 824. These younger generations have increased their home improvement activity during the past year with 42% planning for, or in the process of, doing a project in the next three months compared with 27% among older generations.

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NEWS + ANALYSIS

Mass timber giant files for bankruptcy Katerra, the mass timber and construction services provider, has filed for bankruptcy. The Menlo Park, Calif.-based company reported that it has filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. The company has also reported that it has secured commitments for $35 million in debtor-in-possession financing from SB Investment Advisers Limited to fund operations during the Chapter 11 process. In a press release issued by Katerra, the company said “the rapid deterioration of the company’s financial position” is the result of the macroeconomic effects of the COVID-19 pandemic on the construction industry, inability to procure bonding for construction projects following the unexpected insolvency

Katerra had big plans to disrupt the construction industry. It filed for bankruptcy in June.

proceedings of Katerra’s former lender, and unsuccessful attempts to secure additional capital and business One of Katerra’s largest lenders, SoftBank Group Corp.’s $100 billion Vision Fund, recently filed for bankruptcy protection in the U.S. Additionally, Softbank-backed Greensill Capital filed for insolvency protection three months ago after

lending millions to Katerra. “While a number of negative factors have led to Katerra’s current challenges, we are implementing initiatives on multiple fronts to maximize value and provide the best path forward for Katerra and its many stakeholders,” said Chief Transformation Officer Marc Liebman. “Our multi-step action plan has rapidly evolved and includes consolidating U.S. activities, continuing our international businesses, advancing key asset sales, securing DIP financing, and commencing an in-court restructuring process. Katerra said the company is moving ahead with several active construction projects following a review of its strategic alternatives. In 2019, Katerra opened a 270,000-square-foot high-volume cross-laminated-timber factory in Spokane, Wash.

News Map: Openings, Closings & Acquisitions Illustration of retailers and dealers in various stages of coming and going. For more retail news, visit HBSDealer.com. california

Sacramento

OPENING

CLOSING

East Sac Hardware A neighborhood staple since 1951, East Sac Hardware closed its doors. Owner Sheree Johnson told CBS 13 news there was no family to take over the business. She added: “All my employees have worked hard to serve our community and we’re grateful to have been able to do that.”

ACQUISITION

new york

East Greenbush

Curtis Lumber Roughly a year ago, the Ballston Spa, N.Y.-based dealer broke ground on this upgrade to a 25,500 sq. ft. store that sits on 12 acres. A grand opening celebration is set for June 25. The new location brings the Curtis total store count to 23.

missouri

St. Peters

Westlake Ace Hardware The wholly owned division of Ace Hardware Corp., Westlake Ace Hardware opened its fourth St. Louis area store, and its 150th overall. The retailer, based in Lenexa, Kan., has its eyes on its 151st store in Liberty, Mo., with an opening planned for summer of 2022.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

virginia

Gloucester Point

Taylor’s Do it Center Taylor’s Do it Center of Virginia and Pleasants Hardware, a brand acquired by Taylor’s in January 2016, plan new store openings this fall. A new Pleasants location will open in New Kent in October and a new Taylor’s store will open in Gloucester Point in November.

HBSDealer.com

NLBMDA UPDATE

Congress is looking at $6 trillion, and change “Where we choose to invest speaks to what we value as a Nation,” reads the first line of President Biden’s message in his proposed budget request to Congress. The documents outlining proposed spending for fiscal year 2022 run more than 70 pages and describe some $6 trillion in federal spending. There’s a lot to digest, including new taxes on corporations and wealthy individuals and previously released infrastructure proposals which include the American Jobs Plan and the American Families Plan. The National Lumber and Building Material Dealers Association (NLBMDA) released a summary and analysis of the huge spending plan, which calls for new investments in housing and extending energy efficiency tax incentives for residential and commercial construction. The NLBMDA said it has been lobbying senior officials within the administration and Congress since the beginning of 2021 on critical tax priorities. Partly in response to NLBMDA’s advocacy, Biden’s budget proposal does not include any changes to the current 20% pass-through deduction available to owners of sole proprietorships, partnerships and S corporations. Additionally, members of Congress have directly told NLBMDA that they expect the other tax increases included in Biden’s proposals to face opposition by members on both sides of the aisle significantly due to NLBMDA’s lobbying efforts. The NLBMDA noted that the president’s annual budget request is seen as an aspirational document that

HBSDealer.com

Taxes: No change to the 20% pass-through

deduction for small businesses. Increase the corporate tax rate to 28%. Increase the top marginal individual

income tax rate to 39.6%. Tax capital gains at ordinary income rates

for households making over $1 million. Currently, this would mean a tax on capital gains at 37% for high-earners. Under Biden’s plan, the top capital gains tax rate would be 39.6% (43.4% when including net investment income tax).

lays out the administration’s legislative agenda and is not required to be passed by Congress. These proposals are simply recommendations for Congress to consider as they put together appropriations bills for the next fiscal year. The NLBMDA said that it is continuing to analyze the president’s budget request and will continue to lobby the administration and Congress on the LBM industry’s legislative priorities. Here is an outline of what is contained in Biden’s 2022 budget request. [The full budget request can be found at dealer.org.] President Biden’s FY 2022 Budget Request: American Jobs Plan: $2.3 trillion for infrastructure investments including roads, bridges, water systems, housing, rail and broadband. American Families Plan: $1.8 trillion for investments in childcare, education, paid leave and other social programs. Discretionary Spending: $1.5 trillion for discretionary spending which includes annual funding for defense and other federal agencies.

Ends practice of “stepping-up” the basis

for capital gains in excess of $1 million unless the property is donated to charity. Includes exemption for family-owned businesses and farms that are given to heirs who will continue to run the business.

Housing and School Construction: Expand the Low-Income Housing Tax Credit. Create a new Neighborhood Homes

Investment Tax Credit. The credit would support new construction for sale, substantial rehabilitation for sale, and substantial rehabilitation for existing homeowners.

Provide federally subsidized state and

local bonds for school construction and improvements.

Energy Efficiency: Extend the section 25C tax credit for

home improvements for five years and increase the lifetime limit to $1,200.

Increase the section 45L tax credit for new

home construction from $2,000 to $2,500 and extend the tax credit five years.

Increase the maximum section 179D

deduction for energy-efficient commercial buildings from $1.80 to $3.00 per square foot for qualifying property placed in service after Dec. 31, 2021.

HARDWARE + BUILDING SUPPLY DEALER JUNE 2021

INDEPENDENT PROFILE

After the flood Sanford Hardware rebuilds and expands in Michigan. By Andy Carlo

hen Michigan’s Edenville Dam failed in 2020, it led to a catastrophic chain of events that left homes, businesses, and entire towns underwater. Heavy rains breached the Edenville Dam, causing a chain reaction that saw the Sanford Dam also falter. Essentially, two lakes emptied and descended over neighboring communities with more than 10,000 homes destroyed or damaged. In the path of destruction was Sanford Hardware in Sanford, Mich. Denny and Kathy Sian purchased the business about 20 years ago and eventually expanded with the purchase of Clare Hardware in Clare, Michigan. But it was Sanford Hardware, a Do it Best dealer, that found itself ravaged by flooding. “Basically two lakes went through our store and onto the next town,” Denny Sian said. “The water was over the roof of our building.” With the original 9,000-square-foot Sanford Hardware — which was actually three separate buildings next to one another — destroyed and its inventory wiped out, Sian made moves to keep the business running. Within 53 days of the destruction, Sanford Hardware set up a temporary, 3,000-square-foot location in July 2020. The location was an area building up for sale but the buyers backed out of the deal. In turn, the owner gave Sian the keys to the building and told him to use it any way he needed. Pennsylvania Do it Best dealer Tim Post also lent a hand, sending a semi-truck worth of store racking. Moving ahead to May 2021, Sanford Hardware is now fully up and running in a new 11,200-square-foot store. “The new store is a little bigger and a lot more efficient,” Sian says. “At least we are unMuch of Sanford Hardware was wiped der one roof, making it much out by a devastating flood a year ago. easier to merchandise.” Building products manufacturer Certainteed donated the siding

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

The new, larger Sanford Hardware places everything under one roof with added room for products and merchandising.

“The new store is a little bigger and a lot more efficient. At least we are under one roof, making it much easier to merchandise. ” —Denny Sian, Co-Owner, Sanford Hardware

for the new structure. Additionally, local union electricians donated about $12,000 of work to help get the new store up and running. “We were able to build a new building that otherwise might have been unaffordable,” Sian explains. Sanford Hardware’s customer count dipped between the fall and rise of locations. But Sian says customer levels are exceeding expectations and above last year’s levels. “Things are going very well. Our community really supports us.” During the hard months, many customers helped support the business by driving 20 miles away to Sanford’s sister store in Clare, Mich. WIth 24 employees total at both locations, Sanford Hardware offers full lawn mower, gas equipment, and electric repair. The dealer also offers window and water pump repair services along with the cutting and threading of pipe. “We have a pretty good service department,” Sian says. Looking ahead, the dealer has eyes on purchasing another location in Sanford that would house all repair services. “It’s about a mile from our store and it’s going to be a really nice shop,” Sian says.

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RETAILER SPOTLIGHT

LOWE’S at T The transformation continues. he list of companies that have transformed themselves from a mid-century commoditiesand-contractor focus into a modern home-center format is a short one. And at the very top of the list of companies that have made that transformation successfully is Mooresville, N.C.-based Lowe’s. The world’s second-largest home improvement chain, Lowe’s turns 100 years old in 2021. And when one looks at the list of projects and efforts since the days of North Wilkesboro Hardware, one could argue that there is as much transformation going on today than at any one time in the company’s history. Chief among the new lineup of transformational initiatives is an all-encompassing initiative described with three little words:

100

By HBSDealer Staff

“Total Home strategy.” Here’s how Lowe’s CEO Marvin Ellison describes this shift in retail mindset: “We have now a vision that we want to be able to provide a total home solution, so that [customers] can go to Lowe’s and get anything they need for their home. Beyond your bathroom remodel, we want to provide all your textiles as well. If you get your kitchen remodeled, we want

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

to provide you every element to make that kitchen functional, and make it something that’s going to meet your dreams and aspirations.” The companies well-documented results through 2021 — certainly aided by a pandemic-induced demand surge for home products and projects — also give Lowe’s confidence that its investments in pro, online, installation services, localization and elevation of product assortment are working for the pro and DIY customer. One recent tactic applied to the Total Home Strategy is the acquisition of Stainmaster, the carpet and flooring brand. With the acquisition, terms of

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RETAILER SPOTLIGHT

Lowe’s at 100

Through the decades with HBSDealer Interesting historical fact: HBSDealer celebrated Lowe’s 50th anniversary in 1996 – that was commemorating the 1946 entrance into the business of the company’s founder and visionary, H. Carl Buchan, who set about growing the business when he returned to North Carolina after serving in WWII. But the true beginning is 1921, a full century ago, when a tiny hardware and general goods store called L.S. Lowe’s North Wilkesboro Hardware was established. HBSDealer wasn’t around to document the growth of Lowe’s through the middle of the century. But National Home Center News, the forerunner of HBSDealer, has been covering the dramatic story of the rise, rebirth and repositioning of Lowe’s for several decades.

1970s

The first appearance of Lowe’s in the pages of NHCN came in Vol. 1, no. 2, the Jan. 27, 1975 issue, with a look at how the commodities-focused business was investing in technology One of the great early quotes: “A retailer who hesitates to stick his neck out with computerization stands a good chance of losing it anyway,” said John Acree, data processing director at Lowe’s.

1990s

Oct. 21, 1996 “Lowe’s keeps on moving up” The feature reported that Lowe’s footprint from 1986 to 1996 increased 22% from 300 to 365 locations, but the retailer’s average store size quadrupled over that same decade, from 15,000 sq. ft. to 66,000 sq. ft.

2010s

“Marvin Ellison’s Big Blue Playbook.” October 2018 In his first week on the job, Lowe’s CEO Marvin Ellison unveiled a major restructuring of executive staff. And in the company’s first quarterly report under Ellison, Lowe’s unveiled a bombshell decision to close all 99 Orchard Supply Hardware Stores. So, what else is new? There’s a lot. On the company’s omnichannel aspirations, Ellison said: “While we have the foundational elements of an omnichannel network, we need to better connect and align our systems and processes to create a truly integrated ecosystem.” The new CEO added: “It’s less about looking at the competition, and it’s more about looking within and asking the question, where can we be better?”

1980s

Aug. 14, 1989 issue “Lowe’s changes course, goes self service.” The prototype featured in this article represented Lowe’s new direction towards a “self-service warehouse”—In other words, a modern home center. The new Tennessee store contrasted with “the small showrooms and contractor driven locations that characterize many of the chains 300 stores” The article highlighted the chain’s challenges, which included a transition from a commissioned-sales environment; and also the need to adjust the merchandising of electronics, specifically the wall of television sets.

2000s

“Lowe’s drops prices, raises bar” Oct. 25, 2004 Here’s how NHCN editors described the marquee initiative of a Lowe’s investors meeting: “The New Lower Pricing initiative, or NLP, is designed to roll back the prices on a number of items to increase foot traffic and reinforce the image of a low-cost leader.”

2020s The Lowe’s transformation continues. The company finished fiscal 2020 with 1,974 stores and sales of $89.6 billion, up 24% from the previous year.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

which were not released, Lowe’s expanded its private brand portfolio, which includes Allen+Roth, Kobalt and Project Source. Lowe’s said it’s looking to also expand the Stainmaster brand into other product areas. As for private label offerings in general, Ellison said: “We’re focused on expanding our private brand penetration with a balanced brand strategy that includes a powerful national brand portfolio that appeals to both Pro and DIY customers.” The company’s new emphasis on the pro customer kicked off more than 2 years ago covering basics such as services, prices and brands. This year the emphasis has moved into a strategic phase, says Joe McFarland, executive VP of stores. Initiatives include building out the Pro loyalty database, the new CRM, the redesigned store layout, the tailored shopping experience (See article next page.) Other initiatives ongoing at Lowe’s resemble basic retail blocking and tackling in the digital age. During the pandemic, the company announced a partnership with HomeAdvisor, a digital platform that connects homeowners with qualified home service professionals. Through the Lowe’s for Pros Loyalty Program, qualifying members will receive annual subscriptions and a credit for an average of 10 free leads. Last month, the retailer introduced “Lowe’s House of Curators.” The series invites trusted “tastemakers” to uncover covetable styles at a value price. With specialedition curations launched throughout the year and inspired by each tastemaker’s own unique perspective, Lowe’s said that it hopes to inspire the interior designer in everyone and showcase that style doesn’t have to come at a high price. Enhanced events are on the list of initiatives — case in point: the SpringFest, expanded into a month-

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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.

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. 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. All other marks are trademarks of their respective owners and are used with their permission.

RETAILER SPOTLIGHT

Lowe’s knows pros Giant retailer sharpens the shopping experience for key customer segment Andy Carlo Lowe’s is rolling out a specialized shopping experience for professional customers and contractors in what the retailer says is its latest effort toward becoming “the New Home for Pros.” Pro customer shopping at Lowe’s can expect to see significant upgrades to their shopping experience through a variety of new features. The moves are designed to save time and money while adding a layer of convenience. “We talk a lot with our customers and we think about them first,” Fred Stokes, senior vice president of Pro Sales and Services for Lowe’s, told HBSDealer. “We’ve really done a lot of work toward what brings our pro customers value at the end of the day.” The new program includes: The Pro Zone, a dedicated area near the Lowe’s Pro entrance with products for graband-go convenience, featuring popular pro items, specially selected and newly released products, and value packs Pro Trailer Parking, which features convenient extended trailer parking spots Free Phone Charging Stations located at the Lowe’s Pro Desk Convenience Rack with several never-before-sold items such as pain relievers, personal care items such as sun and hand care, and more Dedicated Pro Checkout staffed with a team of sales, cashier and loading associates— that will continue to expand—to help get Pros in and out quicker Flexible Credit Options that can save Pros five percent off every day on eligible purchases plus Lowe’s For Pros Loyalty Members can get zero percent interest for 60 days when using their Lowe’s Business Advantage or extended terms when using their Lowe’s Commercial Account.

Additional features include windshield washing stations and

Rental , and redesigned the layout of stores to better serve pros. “We want to make sure any time spent away from the jobsite is efficient and productive for the pro customer, especially smallto mid-size companies,” Stokes said. “ We’ve enhanced our shopping experience, bringing in The new Pro Zone at Lowe’s will feature popular pro items, new products and services newly released products, and value packs. that help add value to each trip pros take and cut down free air pumps. Lowe’s expects to on the number of stops they make roll the program out to all stores throughout the day.” over the next year with many already The SVP describes the latest featuring the new merchandising and initiative as “the next pivotal moment” convenience updates. in Lowe’s pursuit of pro business. Lowe’s said it is also introducing new “In 2019 we were running ball five technology to help associates improve yards at a time. In 2020 we began their relationship with pro customers. throwing the ball down the field to A new tool will provide insight that score touchdowns,” Stokes explains. helps associates engage with pros “Now we are perfecting our team unlike ever before and ultimately help and really listening to the needs of them grow their businesses, the home the customers so we can be a more improvement giant said. consistent team and provide our The Mooresville, N.C.-based customers with what they need to company estimates that its pro product win each and every day.” market is more than $400 billion and is expected to grow faster than the overall U.S. home improvement market in the coming years. The company has continued to enhance its Lowe’s Pro offerings in recent years. In 2019, Lowe’s improved pro fundamentals such as increasing its job lot inventory quantities while raising the bar on store service. In 2020, Lowe’s launched its Lowe’s For Pros loyalty program, continued associate training to help with specific pro needs, announced Charging stations are being installed to add an extra layer of convenience for pro customers. new services such as Lowe’s Tool

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

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long promotion in 2021. It also introduced free, curbside family project kits, such as a Garden-to-Go kit sponsored by Miracle-Gro, and a “Lowe’s Mystery Garden Pinata.” Bill Boltz, executive VP of merchandising told investors in May that he was pleased with the results. “We extended this event across four weeks to create a new sense of excitement and to prompt return trips, while also avoiding congestion in our stores,” he said. There was a digital component to all of the above initiatives, and that’s a reflection of the Lowe’s omnichannel approach. The company’s numbers generated by Lowes.com have been eye-popping. During the stay-at-home, spendat-home year that was fiscal 2020, Lowe’s generated three consecutive quarters with online comps of more than 100%. “With customer demand for an integrated omni-channel shopping experience only increasing, we continue to invest in our omni-channel capabilities,” said Ellison. Earlier this year at an industry event sponsored by the National Retail Federation, Ellison described what it takes to thrive for 100 years. “It starts with a really stable and solid foundation,” he said. “If you don’t have a robust labor management system, if

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100 years and 100 Hometowns Lowe’s is celebrating its 100th birthday with gifts to a 100 communities across the nation. It’s called the 100 Hometowns program. Lowe’s said it will award 100 grants this summer to help recipients complete projects to build, repair, beautify, inspire and improve 100 communities. The projects are expected to be completed this year. “For generations, serving the community has been a core part of Lowe’s culture and values,” said Marvin Ellison, Lowe’s president and CEO. “In approaching our centennial and particularly in the wake of such a challenging period for our country, we decided to commemorate this milestone by taking on 100 community improvement projects, with local associate volunteers lending a hand across the nation.” The type of products expected for improvement include community spaces such as parks, senior citizen or youth centers, neighborhood housing, cultural preservation, and general area revitalization.

you don’t have a strong stable IT infrastructure, if you don’t have an eCommerce platform that gives you agility, if you don’t have products that speak to customers from a value and quality perspective, it’s really difficult to be effective in retail — whether its 2021 or 1921.”

HARDWARE + BUILDING SUPPLY DEALER JUNE 2021

C O V E R F E AT U R E

Distribution empire expands through Rome Orgill accelerates into growth with upstate New York DC. By Ken Clark

t used to be said that the logistics division of a typical retail business would get little attention from customers and corner-office executives — until something went wrong. Those days are over. The global pandemic has elevated the hardware and lumber industry supply chain from a behind-thescenes service to a front-and-center, mission-critical, 24-7, top priority. Case in point: a recent HBSDealer survey asked readers to describe their company’s biggest challenge in the spring of 2021. Supply chain (and the related issue of pricing) generated a whopping 80% of the votes.

Innovative features include an on-premises reverseosmosis station to purify the water (and extend the life) of the batteries in the DC’s forklift fleet.

Against this background, Memphis, Tenn.-based Orgill is flexing its distribution muscle with the opening of a new distribution center in Rome, N.Y., the company’s eighth. The new facility is remarkable both for the state-of-the-art features culled from Orgill’s book of best practices and industry innovations, and the accelerated timeline used to build it from scratch. When the pandemic hit, Orgill pushed ahead its opening date for the Rome facility by a full year — shooting for the summer of 2021, instead of the original target of summer of 2022. Rome will deliver 17% additional square footage, and even more capacity. (Meanwhile, Orgill is nurturing plans for a distribution-center expansion in the Western U.S. More on that story is expected soon.) The driving factor behind it all, said Orgill CEO Boyden Moore, is “growth.”

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

Orgill’s new distribution center in Rome, N.Y., increases the Memphis, Tenn.-based distributor’s DC count to eight.

“Our business grew a lot last year and has grown even more in the first quarter—up over 30%,” he told HBSDealer in an interview inside the Rome facility “We’ve got a lot of opportunities to continue to grow with customers reaching out to us, but we’re committed to getting our service level right first for the customers that we already serve.” Last year, Moore explained the challenges of Orgill involved not only increased demand from Orgill’s core customers, but from customers who turned to Orgill from competing distributors whose supply chains also came under pressure. (Orgill serves over a thousand Ace, True Value, and Do it Best customers as a secondary supplier.). Growth is a tradition at Orgill, founded in 1847. The company grew to sales of $1 billion in 2006. In took 10 more years to hit the $2 billion mark. And in 2020, Orgill crossed the $3 billion

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One-on-one with Boyden Moore Expansion, the pandemic and the power of a handshake.

milestone. That kind of hockeystick growth doesn’t happen in the distribution industry without intense focus on the art and science of moving products from points A to B with military-like precision and efficiency. A late-spring tour of the upstate New York facility as it was preparing to bring its considerable powers online revealed a number of synergies, strategies and tactics that represented the best ideas in distribution, and some of the best practices from existing DCs. Mark Scanlon, VP of Northeast distribution for Orgill, describes the Rome distribution center as a “team effort.” Not only to get the facility up and running, but to keep it humming. “The phrase you’ll hear us use again and again is ‘miles and footsteps,’” he told HBSDealer. “The idea is to minimize the miles logged bringing product to customers, and the footsteps made by associates here in the building.” For every redundant mile eliminated and unnecessary footstep avoided — whether that’s footsteps to turn off the lights or shovel the walkway —

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During the pandemic, Orgill CEO Boyden Moore has kept the lines of communication open with his own distribution team and retail customers. He donned the mask and hit the road. And what he’s heard is a familiar refrain. “I’ve traveled to all of our DCs for feedback,” he told HBSDealer. “I’ve been to customer stores as well as our own [CNRG] stores, just to see what’s going on out there and talk to people. And recruiting and hiring is the biggest concern I’m hearing. Of course, pricing and commodity costs are on people’s minds, too. So taken altogether, it’s difficult out there right now.” But Orgill feels it’s up to the postpandemic challenges of serving customers and growing its business. Back in October, the Memphis, Tenn.-based distributor budgeted for a 7% increase in sales in 2021, a bullish projection compared to national home center chains Home Depot and Lowe’s. Since then, “we’ve had a strong first quarter in the books, and a fast start to the second quarter,” he said. “We feel really good.” Orgill nation will have a chance to feel even better once it convenes in February 2022 for its Dealer Market. The last such event occurred in February of 2020, just before the pandemic shut down much of the country. Since then, Orgill has created successful, virtual buying markets, but there’s more to a market than transactions. “We haven’t found a good way to replicate shaking somebody’s hand, smiling and seeing each other en masse,” he said. “We’re very excited about our February market. And it will be a new kind of hybrid

Boyden Moore, Orgill president and CEO.

event where we’ll take everything that we’ve learned from these online buying events and roll it into the physical event as well.” While industry markets have taken a hiatus through the pandemic, consolidation and acquisitions have not. Big retailers are getting bigger. Orgill, which has seen its top 100 accounts grow faster than its total business over the last several years, has alsoo been on the acquisition trail through its Central Network Retail Group (CNRG). Independent dealers will continue to play a significant role in the hardware and building supply space, but the consolidation trend is likely to continue, Moore said. “Ten years ago, when we started CNRG, there were a lot of people at a point in their ownership where they were considering passing the business to the next generation, and thinking about what’s best for them, for their family and for their business,” he said. “I think those opportunities are still there, and they continue to play out.” Still, Orgill is temporarily playing a conservative game in terms of recruiting new business. “We have been adding new business this year, but we’ve been trying to do it in a way that doesn’t disrupt our steady improvement of our supply chain or our service levels,” Moore said. (See article on page 26.) The supply chain challenges exist throughout the hardware and building supply industry, and are “gradually” improving, he said. One area of Orgill business that’s particularly likely to grow is among pro customers. Orgill serves more than half of the top 100 pro dealers in the industry, he said. And these customers, for varied reasons, have been softer than the consumer business during the last year. Orgill sees an opportunity for this sector to play catch up in 2021 and beyond. Responding to a question about Orgill’s role in a landscape of coop’s and distributors, Moore turned to the Orgill’s mission — “to help our customers be successful.” “We are very focused on that mission,” he said. “And I don’t know anyone who does that better than us. We go about it differently because Orgill is not represented as a brand at retail. We’re set up to support that the independents and their brands—however a customer wants to assort and what they think is best for their community. And that’s a big part of what makes us special.”

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C O V E R F E AT U R E

At 778,000 sq. ft., the Rome, N.Y., distribution center expands Orgill’s total distribution footprint by 17%.

the distributor increases its efficiency and saves dollars. A short list of innovative features in Rome would include: Snow management. Beneath the sidewalk is a heating system to prevent ice and snow build up during the brutal upstate New York winters. The roof of the facility is also winterproofed — built to withstand at least 8 feet of snow accumulation. Long-range barcode scanners. These futuristic lasers shoot

ENGINEERED COMPOSITE FOOTINGS

a widening laser circle toward barcodes, allowing the DC employee easy access to products on high shelves without climbing a ladder, or without stepping off a forklift. Reverse osmosis water purification station. This area of the facility helps maintain the long life of the battery-powered fleet of fork lifts of all varieties. The purified water helps extend the life of the hard-working batteries. VNA system. VNA is Orgill terminology

for a space-saving section of the DC with “very narrow aisles” that measure 77 inches in width. That’s just wide enough to allow a specialized forklifts to slide through by coonnecting to a sensor embedded in the concrete floor. Lighting efficiency. Motionactivated lights ensure efficient energy conservation. Communication enhancements. Even before one enters the massive working warehouse, the front office areas are equipped with integrated

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ICC Building Code Compliant ESR-2147

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Mark Scanlon (left) VP of Northeast distribution for Orgill, oversaw an accelerated opening schedule for the Rome DC. Specialized forklifts (center) operate in VNAs, or Very Narrow Aisles.

flat-screen televisions in the various rooms and work areas, allowing managers to easily share information across the network. There is no shortage of statistics to describe the Rome facility: 68 dock doors, 24 receiving doors, a 778,000 sq. ft. footprint. But those numbers can only tell part of the story of how Orgill is making use of the space. If one measure the area of the three-level re-pack module, the usable space expands to well over a million sq. ft. With the addition of Rome, the

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company operates a system of eight DCs — as far west as Post Falls, Idaho, and as far south as Tifton, Ga. The launch of the Rome, D.C., will bring several benefits to Orgill nation, Moore said. Obviously, it will facilitate deliveries in the fastgrowing Northeastern United States. It will also rellieve pressure on Orgill’s Inwood, W.Va. distribution center, which was bearing the brunt of the pandemic-induced demand from the region. Moore says benefits will also trickle down to the Midwest and South areas through various

changes in routing plans. And those benefits are coming with a sense of urgency. It hasn’t been an easy environment for operating as a retailer, Moore said. And the same goes for building a distribution center, a task burdened by its own unique supply challenges, such as a shortage of racking or trucks. “Despite all of the similar supply chain problems that we’ve been dealing with as a supplier, these guys here in Rome have kept this project absolutely on track on an accelerated timeline,” Moore said. “And that’s been amazing.”

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PRODUCTS

The OPE Roundup An industry’s message to the masses: ‘More power to you.’ By Andy Carlo With outdoor living season in full bloom, lawn and yard maintenance is in high-gear. Here’s a breakdown of some of the latest new outdoor power equipment products, featuring more power and additional convenience. STIHL Battery-Powered Trimmers Part of the new STIHL 135 professional battery platform, the FSA 135 and FSA 135 R battery-powered trimmers are assembled in America and are true game changers for professional landscapers. The trimmers feature an on-board battery slot that can support both an on-board battery or a backpack battery for even longer run times. Paired with a brushless motor and the same drive and cutting components used in proven STIHL professional gas trimmers, these units deliver professional cutting performance comparable to STIHL gas units with zero exhaust emissions and low noise. The trimmers are versatile for different cutting applications, including trimming and weed clearing. The STIHL AP Battery Series delivers professional-grade power, great for extensive use on a wide range of applications. With a commercial-grade brushless motor, the FSA 135 and FSA 135 R provides professional users an energy-efficient and lowmaintenance option that delivers ideal power run times and durability.

Husqvarna 230iB Leaf Blower Husqvarna’s 230iB leaf blower is lightweight and delivers more than enough power to get the job done. The product offers the convenience of instant startups and simple-to-use controls, along with ultra-quiet performance and reduced vibrations. The 230iB provides homeowners with both power and convenience, as it features a 650 CFM, which delivers best-in-class blowing power, the company says. The new leaf blower offers a convenient scraper attachment on the end of the blowing tube to help with moving stubborn debris. The 230iB offers the lightest-inclass weight (under 9 lbs.) and a cruise control option that makes cleanup work more conducive and truly a breeze. The BLi22 battery and QC250 charger are included.

Makita LXT Self-Propelled Mower Makita is expanding the line of cordless outdoor power equipment to include the 36V (18V X2) LXT Brushless 21” Self-Propelled Commercial Lawn Mower (XML08PT1). With zero emissions, lower noise and reduced maintenance, the 36V (18V X2) LXT Self-Propelled Commercial Lawn Mower is a welcome solution for efficient grass cutting. It’s powered by two 18V LXT batteries, but holds four batteries for twice the run time. There is no need to leave the 18V battery platform. The Makita-built motor delivers up to 2,800 RPM. The Quiet Mode setting reduces noise by providing constant speed control at 2,300 RPM. The mower offers ease-of-use features including quick height adjustments, mulching capability, and a commercial-grade steel deck. It features a 3-in-1 design for mulching, bagging, or side discharge. The XML08PT1 includes the mower, four fast-charging 18V LXT lithium-ion 5.0Ah batteries and an efficient 18V Dual Port Rapid Optimum Charger. The lawn mower features Makita Extreme Protection Technology (XPT). XPT is a protective seal inside the tool and is engineered for improved operation in harsh conditions by channeling water and dust from key internal components.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

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Milwaukee Tool M12 FUEL Hatchet The Milwaukee Tool M12 FUEL Hatchet 6” Pruning Saw delivers unmatched control & access, has the power to cut 3” hardwoods, and delivers up to 120 cuts per charge. This electric pruning saw is designed to meet the ergonomic, performance, and durability needs of landscape maintenance professionals. Weighing less than 5 lbs and featuring a compact design, the cordless pruning saw gives you increased control and maneuverability in tight access areas. The PowerState Brushless Motor delivers the power to complete cuts in demanding hardwood materials. The RedLink Plus Intelligence enables full-circle communication between the tool and battery, providing you with unmatched levels of performance, protection, and productivity. The advanced electronic package also delivers an instant throttle response and a variable speed trigger for ultimate control over the power range. The M12 RedLithium XC 4.0Ah Battery delivers best-inclass run time and performance. This pruning saw features a full house chain, easy access chain tensioner, automatic oiler, metal bucking spikes, and onboard storage for the scrench.

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WORX Nitro Self-Propelled Mower The WORX Nitro 40V 21 in. SelfPropelled lawn mower is the latest mower in the new WORX Nitro 20V Power Share Pro platform. It’s paired with a maintenance-free brushless motor for gas-like power and performance. The WORX Nitro mower also features a durable steel deck with superior mulching capability; and rear-wheel drive for positive traction and maneuverability. The self-propelled lawn mower represents the new WORX Nitro line of performance-driven outdoor power equipment engineered with brushless motors and high-performance batteries to run longer and work harder. The mower is powered by two, removable, 20V Power Share Pro 5.0Ah Max lithium-ion batteries to deliver 40V of power. When fully charged, the mower cuts lawns up to 1/4 acre. The batteries are compatible with WORX 20V Power Share batteries and fit all WORX 20V lawn and garden and DIY tools. A rear-wheel drive transmission improves traction and maneuverability, especially on hilly or varied terrain. The mower’s variable speed control allows the operator to set his or her own walking pace. Sensors adjust to higher torque for thicker grass and reduce torque automatically when it’s no longer needed for everyday mowing, maximizing battery run time.

NorthStar Electric Pressure Washer Northern Tool + Equipment has introduced its newest line of universal and professional quality pressure washers — the NorthStar Electric Cold-Water Pressure Washers. The new NorthStar Electric Pressure Washers are designed to hold up to the daily rigors and demands of a wide range of industrial applications including agriculture/lawncare, automotive, construction, commercial cleaning, plus maintenance and facilities management. Powered by electricity rather than a gas engine means these new NorthStar Electric Pressure Washers are workready for indoor use to support restaurants, factories and other enclosed spaces. The pressure washer features Total Start/Stop technology, which automatically starts the motor and pump when the trigger is pulled and stops operation when released. This start/stop technology prevents dangerous heat buildup and damage to the pump and seals caused when motors are left running without users actively spraying. Each pressure washer uses high-efficiency motors with dynamically balanced rotors to ensure low vibration, quiet operation and longlife performance. Of the four stationary units available in the line, three come in durable, steel enclosures that mount to floors or walls for maximum versatility and feature a reinforced gusseted steel base to help reduce vibration when in use, plus storage solutions for the hose, nozzles and lance. HARDWARE + BUILDING SUPPLY DEALER JUNE 2021

INNOVATIONS

Five innovative trends in building Solutions developed to meet the challenges of today, and tomorrow. By Max Shafer The pandemic of 2020 affected the livelihoods of many industries across the globe over the past year, construction included. China, a large supplier of the world’s building materials, was hit particularly hard in the first quarter, resulting in skyrocketing prices and delayed delivery times. As a result, many builders are looking to make the move toward more sustainable and costeffective building materials in 2021. The eco-movement has been a feature of the construction industry for some time now, but as resources are harder to come by and more expensive, natural and inexpensive building materials like bamboo plywood and stained concrete floors are becoming more and more popular. Here are some of the top building material trends to look for on the horizon this year.

1. Acoustic Ceiling Tiles For ease of installation, noise reduction, and an attractive price tag, many builders are turning to acoustic ceiling tiles when designing and constructing commercial and residential properties. Acoustic ceilings are made of tiles sectioned off within metal grids, intended to reduce noise by absorbing and deflecting sound. However, sound control isn’t the

only feature that makes this building material appealing to use in a wide variety of projects. Acoustic ceiling tiles are an effective way to add an extra layer of insulation to any room, helping to increase energy efficiency and reduce electricity costs. This building material is easy to install and is fast becoming the primary ceiling of choice for locations like offices, hospitals, schools, stores, and more.

2. Bamboo Plywood In the past, hardwood was the material of choice for plywood and making furniture. However, hardwood is expensive to purchase and in limited supply. As an eco-friendly, green alternative to hardwood, bamboo plywood offers all of the beauty and appeal of hardwood, without the high price tag or toll on natural resources. Bamboo grows quickly and abundantly, making it the ideal building material of choice for flooring. An additional advantage to bamboo over its hardwood counterpart is that bamboo is a greater density material, able to withstand the wear and tear that other materials like maple, oak, and ebony cannot. This means that property owners will not need to repair or replace floors for decades to come, making bamboo plywood one of the most sustainable building materials of 2021.

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3. Metal Lap Siding When it comes to aesthetics and functionality, many builders have taken a turn away from brick and wood buildings and embraced a more modern, sleek look using metal lap siding. As part of the new industrial movement, more and more designers are opting for durable, long-lasting materials that weather well with time, giving buildings a distinct and unique quality. Metal lap siding is most frequently made from steel which has many benefits. First and foremost, it’s a recyclable material, which means it can be sourced easily, cheaply, and sustainably. Second, metal lap siding can play an important role when it comes to protecting your buildings. The metal is resistant to wind and weather damage like hail, which chips away at traditional siding. It’s also impervious to fire, helping to protect the structure as well as inhabitants and possessions in the event of a fire. 4. Stained Concrete Floors In decades past, concrete was viewed as an unsightly, purely functional building material. However, in the past few years, concrete has emerged on the scene as an upscale, affordable alternative to traditional hardwood, tile, carpet, stone, and linoleum flooring. Instead

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of being hidden under other materials, stained concrete floors have taken the construction world by storm for their versatility and long list of advantages. Whether you’re stripping materials back to the concrete or laying down new concrete flooring, one of the main benefits of using this material is the fact that you have almost unlimited creative options when it comes to color and style. The cost of installation or polishing and applying a coat of overlay is as

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affordable as lower-priced options like linoleum and carpet, but with a much longer lifetime and more refined image. 5. 3-D Printing Once a thing of science fiction dreams, 3-D printing has become a viable method of producing materials and it’s been gaining traction in the construction industry. While these machines mainly use concrete to create walls and other structural components, the most appealing feature is the automation that does away with human error and other potential inaccuracies. Additionally, 3-D printing makes it easy to create custom builds quickly and efficiently on a budget. The global disruption of 2020 proved to be a large hurdle for many industries to overcome, but as we move forward in 2021, sustainable building

materials have been paving the way for a new school of thought around construction. Some of these trends, such as acoustic ceiling tiles and metal lap siding are sure to gain popularity for their versatility, functionality, and environmentally conscious nature. Max Shafer is a contributor to the Innovative Building Materials blog. He is a content writer for the construction and home improvement industries with an interest in landscaping, outdoor remodeling, and interior design. Max is focused on educating homeowners, contractors, and architects on innovative materials and methods of construction that increase property value, improve sustainability, and create a warm and welcoming ambiance.

HARDWARE + BUILDING SUPPLY DEALER JUNE 2021

Canfor builds in Louisiana Canfor Corporation announced it will invest approximately $160 million USD to build a new, state-ofthe-art sawmill near DeRidder, Louisiana. The Vancouver, British Columbia-based lumber and forest products producer said it will be receiving significant state and local incentives in support of the project. The facility will have an annual production capacity of 250 million board feet on a two-shift basis and will directly employ about 130 people plus create significant additional indirect jobs.

The Canfor sawmill will bring annual production capacity of 250 million board feet on a two-shift basis.

‘Make PPE in America’ advances An industry group called the Coalition for a Prosperous America applauded the Senate passage of the Make PPE in America Act (S. 1306). With bipartisan support — it was introduced by U.S. Senators Rob Portman (R-OH) and Gary Peters (D-MI) — the bill is designed to strengthen efforts to onshore production of personal protective equipment in the United States. PPE emerged as a breakout category for hardware stores and home centers during the pandemic. The bill was included as part of the U.S. Innovation and Competition Act of 2021 (S. 1260) that passed the Senate by a vote of 68 to 32. “I have long raised the alarm that our overreliance on foreign manufacturers for masks, gloves and medical devices is a serious national security concern,” said Peters. However, the CPA wasn’t calling the Senate’s approval as a complete victory. The CPA opposed the simultaneous passage of bill to remove all tariffs on foreign-made PPE.

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

The Louisiana facility will have a manufacturing capacity and flexibility to produce a wide variety of high-value wood products. Startup at the mill is expected to commence late in the third quarter of 2022. The investment in Louisiana is in addition to the approximately $300 million of 2021 capital spending, including about $200 million for the solid wood and pulp operations in Western Canada and $100 million for the solid wood operations in the U.S. South. “We are excited to grow our operating footprint with the greenfield project in Louisiana, which will increase our production capacity and allow us to meet the growing demands of our customers,” said Don Kayne, president and CEO of Canfor. “We also continue to invest significant capital in our British Columbia and U.S. South facilities to ensure we sustain our top quartile operations and strategically grow our global operating platform,” “Agribusiness remains one of our key industries for growing Louisiana’s economy, and our state offers unique advantages that attracted Canfor here,” said Louisiana Gov. John Bel Edwards, “This major new manufacturing project can resonate across the region’s economy in a variety of ways. We welcome plans for this foreign direct investment in Louisiana by this industry leader, and we look forward to the good jobs this project is expected to create in Beauregard Parish for the region’s skilled workforce.” Given the decision to build a new facility in Louisiana, Canfor said it will no longer move forward with plans for a greenfield project in Washington, Ga., previously announced in 2018.

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Top Women Profile Series At Builders FirstSource, Evionne Silver speaks her mind. (And you should, too.)

As a night school student pursuing her masters degree in business administration, Evionne Silver followed a recruiter’s advice to go and interview with a Colorado Springs area, family owned lumberyard. It was a match made in LBM heaven. It was more than just a team of kind, loyal professionals, she said. “I found people who had a passion for the industry, and that inspired me to focus on making the business successful through good, bad and constantly changing times.” Evionne Silver’s career path brought her to BMC in 2004, and she has since risen to the position of VP of Install Business for the newly merged BMC/Builders FirstSource. Here are some highlights of her outlook on the industry and its growing diversity. What do you like most about the business? People are the heart of this industry, and teamwork always leads to success. Nothing happens in this industry without the dedication and hard work of people every day — from sales to production workers, truck drivers to installers. The people in this business have become an extension of my family. I have built lifelong friendships while also continuously pursuing my personal career goals. Do you find it helpful having female role models? Unfortunately, there were not many female role models when I began my career on the operational side of this industry nearly two decades ago. However, this has begun to change in recent years. Having female role models helps to eliminate fears of being different or of having different views and opinions. It is important for women to understand that they are capable, and they should be confident even when they may be the only woman in a conference room or

walking a construction site. There are many men in this industry who are advocates and role models for women, and they see diversity as a positive influence on future growth and success. In what ways do you feel like you are a role model for other women? I am a role model for other women by showing them how critical it is that they stay true to themselves. Women need to understand that while we may have different ideas and resolutions than others at the table, those ideas still deserve to be heard. Sometimes the most out-of-the box solutions are the most innovative — and the most needed. Do not try and conform your thinking to what you feel others want to hear from you. Instead, speak from your own experiences and be confident in what you believe. How can we all get more Evionne Silver women into this industry? In my experience, women thrive on passion, hard work and multitasking. These natural skill sets are a perfect fit for this industry. We need to show women how fulfilling and rewarding this industry can be for them personally and professionally. Women can be truly impactful on this business,

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

By Ken Clark

and there are many different roles that align with a balanced and successful career. Lots of positions can easily accommodate different stages of life, including early career growth, balanced family/work life and late career success. Why is diversity in the workplace important? Diversity in the workplace is extremely important because it gives companies stronger growth potential. Recruitment to this industry can be difficult, and without diversity, companies are limiting their futures. Diversity allows businesses to better understand and relate to a growing diverse customer base. It gives employees pride in their workplace, which leads to higher morale and productivity. Diversity increases idea-generation within a company that leads to innovation, continuous improvement and operational excellence.

MARKET INSIGHTS

Highlights from the ProDealer Industry Summit Industry innovation inspires talking points at 2021 PDIS. Is it possible that homeowners of the not-too-distant future will have large parts of their dwelling (or maybe even all of it) delivered from a printer, instead of a building supply dealer? The short answer, according to a presentation during the 2021 ProDealer Industry Summit, is “yes.” And not only that, these 3D-printed materials could be extruding bio-based materials that are good for the environment. That was one of the forward looking ideas featured in the presentation, titled “Innovation & Disruption in the LBM Industry.” The presentation also looked at the concepts of modular building, cross-laminated timber and virtual reality.

Moulding samples merely hint at the disruptive potential of 3D printing.

With things moving fast, it’s hard to identify the next big thing that will alter the business. Tiffany Reeder of US LBM Holdings, product manager,

interiors, described virtual reality as having a real impact today in forwardthinking show rooms. Customers and home owners. Experience a “wow” moment, she said, when they put on their VR goggles supplied by the show room. “The crisp incredibly real images that we can create actually make you want to reach out and turn on the faucet at the sink, or walk over and open a cabinet door,” she said. “It’s this visualization and interactivity that our customers expect.” This selling process allows the dealer to connect with the customer, especially the younger customer.

More obstacles ahead for housing Ivy Zelman shares her market analysis, ready or not.

By Andy Carlo

If you’re a dealer who has benefitted from the surge in residential construction, remodeling and home improvement sales in the past year, now might be the time to put some money away. That was one of the messages Ivy Zelman delivered while providing a housing forecast at the 2021 ProDealer Industry Summit, which was held in a virtual format last month. Zelman, the CEO of Zelman & Associates and one of the industry’s top analysts, said that the housing and home improvement markets have enjoyed a prosperous run; a stark contrast to other industries hit hard by the pandemic in the past year, such as travel and hospitality.

home sales should increase 10% this year. But she sees just 4% growth next year before falling by 3% in 2023. Fueling housing supply challenges is a bottleneck of new construction along with inflation, which is forcing some builders to take a step back from new orders. Additionally, multiple generations are remaining in their homes longer while enjoying and retaining low mortgage rates. And as home prices continue to climb, and with higher mortgage rates on the way, current homeowners are even more reluctant to leave their current residence. “Homeowners are not going to trade up for another home at a higher rate,” Zelman noted.

Still, there are hurdles in the industry that include high lumber prices, a supply chain slowdown, and a labor shortage. “While it’s challenging, I’m happy for all of my friends in the industry who have had an incredible ride,” Zelman said. But the analyst said she sees the market reverting in the next few years. Looking ahead, Zelman said she expects production new home orders to rise by 7% in 2021, just 2% in 2022 and fall by 6% in 2023. Zelman also forecasts single-family starts to increase 16% in 2021 and grow 4% in 2022 before dipping by 5% in 2023. While the industry is facing a housing supply challenge, Zelman said existing-

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

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“I’m confident that we’ll continue to see an expansion of the virtual and augmented reality in the buying process,” she said. “We’ll likely see brick and mortar spaces shrink, while at the same time being able to actually sell and provide and sell more product solutions for the customers.” Virtual and augmented reality tools will also play a major role in training — from forklift training to cabinet installation. “Really exciting stuff,” Reeder said. Bryan Huot, vice president of LaValley Building Supply, agreed with the idea that modular homes have shed their reputation as inferior to traditional methods. “The stars are kind of aligning a little more now right now for modular home construction,” he said “You have labor challenges and a lot of other macroeconomic challenges. So people are hungry for easier ways to construct homes.” Huot drew the analogy between

At the same time, a lack of available lands and lots is holding back builders along with the rising cost of lots. Home builders are being forced to head out further and further from metro markets to new building grounds. One of the sweet spots of new home construction, the build-to-rent market could also face challenges. Described as the “prettiest girl at the dance,” Zelman said market saturation of new single-family rentals could be here soon. “The ramp is coming,” she said. Home improvement spending is likely to drop as well in a postlockdown economy as consumers find other avenues for spending such as travel and leisure activities as their stimulus dollars begin to run out. Zelman said she expects home improvement spending to rise 7% in 2021 before falling 7% in 2022, marking a 14-point swing.

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modular home construction and OSB, which had to overcome resistance to change among builders who “only use plywood.” There’s nothing cookie cutter about the designs of Preferred Building Systems, LaValley’s modular division. “We do modern structures, to Victorian style houses, as well as traditional New England capes, colonials and ranches,” he said. “It’s a very diverse offering.” Think of it as “stick building within a factory,” he said. “We’re applying a lot of manufacturing techniques to introduce efficiencies to the process.” The session on disruptive trends included a presentation from Habib

Dagher, the executive director of the Advanced Structures and Composites Center at the University of Maine, site of the world’s largest polymer 3-D printer. Dagher showed lumber dealers stop-action photography of the creation of a boat after four days of continuous printing. “You can see what is possible,” he said. Dagher explained that the ASCC has its eyes on pushing the envelope of 3D home printing by creating a complete house that is printed completely on site. It remains to be seen if the printed home can make a substantial dent in the housing market.

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HARDWARE + BUILDING SUPPLY DEALER JUNE 2021

PEOPLE IN THE NEWS Ellison elected Chairman

at Lowe’s Lowe’s board of directors elected President and CEO Marvin Ellison to the additional role of Ellison chairman of the board. T Ellison succeeds Richard Dreiling, who has shifted from the role of chairman to lead independent director. Prior to the move, Ellison served as a director on Lowe’s board. “Marvin has demonstrated exceptional leadership at Lowe’s since his appointment three years ago and has built an extremely talented team,” Dreiling said in a prepared statement issued by the home improvement retailer. “He has been the driving force behind the company’s successful transformation into a world-class,

omnichannel retailer that provides outstanding customer experiences, is a great place for associates to work and consistently delivers value for our shareholders.”Dreiling also noted that Ellison guided Lowe’s through the pandemic and continued to deliver for associates and the communities that Lowe’s serves. “The board is confident Lowe’s remains wellpositioned for continued success, and we look forward to working with Marvin in this expanded capacity,” Dreiling said. Ellison joined Lowe’s in July 2018 as president, CEO and director, and has over 35 years of industry experience. Before joining Lowe’s, Ellison served as chairman and CEO of J.C. Penney Co. Before that, Ellison spent 12 years in senior-level operations roles with The Home Depot Inc., including serving as its executive vice president of U.S. stores.

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JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

“I am honored to have the confidence of the board and to take on this additional responsibility at such an exciting time for Lowe’s,” Ellison said. “We have made great strides in transforming the business, and our improved operating capabilities and enhanced technology infrastructure enable us to capitalize on a constantly evolving business environment.” Industry honors LMC’s Somerville John Somerville, president of the Lumbermens Merchandising Corp. (LMC), was recognized during the ProDealer Industry Summit. Somerville was presented with a Lifetime Achievement Award from the National Lumber and Building Material Dealers Association — an honor that has presented only twice previously. “It has been truly an honor to work with such an important association that represents the best interests of all lumber and building material dealers across the country,” said Somerville. “I am very proud to have been part of NLBMDA’s history and sincerely thank NLBMDA for this Lifetime Achievement Award.” Somerville joined LMC in October of 2009. LMC a lumber and building materials co-op serving nearly 400 Stockholder companies with over 1,400 locations from coast to coast including Hawaii and the Bahamas.

Somerville

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Franklin’s Lierz honored The National Lumber and Building Material Dealers Association (NLBMDA) presented the Chairman’s Award to longtime NLBMDA leader, Rick Lierz, President & CEO of Franklin Building Supply. “It has been a privilege to be involved Lierz in this organization. I have met so many good friends from across the country in the LBM industry and I would not have had that enriching experience without my involvement with NLBMDA,” said Lierz. “I have had a lot of other benefits as well. I’ve improved my leadership skills and have gained so much perspective on our federal legislative and regulatory system. Thank you again, Bob (Sanford) and NLBMDA, for this honor.” Lierz leads Franklin Building Supply Co., the largest independent retail building materials distributor in Idaho. Lierz is the former Chair of NLBMDA and currently serves on the Board of the Western Building Materials Association (WBMA) Rick has served on numerous NLBMDA

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Committees and task groups and continues to be heavily involved in the association. ABC names Perry as IDE director Associated Builders and Contractors announced that Tia Perry, formerly ABC’s director of business development and partnerships, will now serve as its director of inclusion, diversity and equity (IDE) in support of ABC’s 69 chapters and Perry 21,000 members. Bringing with her 15 years of association experience to this new role, Perry will serve as a strategic thought leader to advance ABC’s IDE strategy, including the measurement and monitoring of the association’s initiatives, and development of new programs and practices that effectively increase IDE awareness. ABC said that Perry will provide thought leadership, strategic thinking and insights to inform and further develop best practice systems, processes and culture that bring meaningful impact to ABC’s IDE strategy.

HARDWARE + BUILDING SUPPLY DEALER JUNE 2021

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.: 1,569,000

NAICS 44413

(sales in $ billions)

1800

(sales in $ billions)

3 2.91

47.8

1700

43.6

1600 1500 1400

2.35

35.9

32.2

2.06

1.95

29.6

1300

1.81

2.17

26.2

1200 1100

1000

900

FEBRUARY 2020

SOURCE: COMMERCE DEPARTMENT

Single-family starts

MARCH

APRIL

2021

JANUARY 2020

FEBRUARY

MARCH

2021

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

(in thousands, SAAR) Apr.: 1,087,000 1400

HBSDealer Stock Roundup

1300

the percent-change performance of stocks based on Jun. 10 prices

1200

120

1100

1000 900

100

800

BECN

600

ANNUAL CHANGE

700

SOURCE: COMMERCE DEPARTMENT

Existing-home sales (in millions, SAAR) Apr.: 5,850,000 7 6.5

BLDR 80

SWK TSCO

LOW

SHW

HD DJI 20 -20 -15 -10 -5

5.5 5

4.5

MONTHLY CHANGE

4 3.5

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

HD (HOME DEPOT); LOW (LOWE’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)

8.0

10.0

4.0

Current Prior month

120

Prior year

16.0

5.8%

18.0

May 0.0

$2.50 $2.00

14.0

6.0

2.0

100

12.0

20.0

117.2

$3.07

May

Jun. 10

140

JUNE 2021 HARDWARE + BUILDING SUPPLY DEALER

$1.50

$3.00

SOURCES: LABOR DEPARTMENT, THE CONFERENCE BOARD, AAA

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SAVE THE DATE

PRODEALER INDUSTRY SUMMIT

MARCH 29-APRIL 2, 2022 HYATT REGENCY WASHINGTON ON CAPITOL HILL IN WASHINGTON, DC

www.prodealer.com

PRESENTED BY

HBSD-0621

Articles inside

People in the News

Made in USA trends

Top Women series Builders FirstSource’s Evionne Silver

The Outdoor Power Equipment roundup

One-on-One with Boyden Moore

Highllights from the ProDealer Industry Summit

Innovative trends in building products

Comments on the bankruptcy of a disruptive force in construction.

Congress is looking at $6 trillion, and change