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Through Buying, Selling, and Closing Yards, Dealers Are Revealing Their Strategies

LBM facilities acquired (blue pins), newly opened (green), or closed (red) YTD 2022. Black pins are locations of Builders FirstSource stores closed so far in 2022. Source: Webb Analytics

ABC Supply is going to Canada. Lowe’s is leaving it. SRS Distribution continues to diversify. Builders FirstSource is right-sizing its company in advance of America's expected home-building slump. And US LBM is still hungry for truss plants.

These are among some of the strategic moves that construction supply companies have made over the past month. In all, Webb Analytics’ latest count finds 378 locations changing hands so far this year, along with 170 greenfield openings and 50 closures. Those numbers trail the number of yards (579) in deals at this point in 2021 but exceed the number of greenfield openings (125). There have been 128 purchase transactions so far this year, not far from the 136 by mid-November 2021.

BFS President and CEO David Flitman revealed to analysts during the company's third-quarter earnings call Nov. 8 that BFS had already closed or was in the process of closing 17 facilities. He didn't say then which they were, but Webb Analytics has learned the 17 include:

  • Home centers in Norwood, Needham, and Canton, MA, that were part of BFS' acquisition of National Lumber earlier this year.

  • One of two lumber facilities in Columbia, SC.

  • Lumber yards in the relatively small towns of Cokato, MN (population 2,800, located 50 miles west of Minneapolis), and Caro, MI (population 4,350, located 100 miles north of Detroit).

  • A lumberyard in Flagstaff, AZ.

  • An installed sales facility in Perris, CA.

The remaining nine locations are still in the process of being closed and thus remain unidentified, a company spokesperson told Webb Analytics.

"I just want to be clear, we are not taking out manufacturing capacity," Flitman told analysts. "This is more consolidation, primarily in some of the smaller markets where we may have redundant assets that, given the last two years and the strength of the market, we have not needed to shut those facilities down. In fact, we've needed all that capacity that we've had, but times are different now."

ABC Supply’s Canadian incursion came when the company bought Monarch Group, an exteriors specialist with five stores in the province of Alberta. ABC Supply’s other big deal had a Canadian connection when it bought 24 U.S.-based branches of the Canadian siding firm Kaycan. ABC Supply also opened a greenfield branch in Hamlet, TX, and Havre de Grace, MD, while its L&W Supply unit premiered in Queens, NY, and Pittsburgh. All told, ABC Supply and L&W Supply have opened 18 greenfield sites so far this year.

There even was action at Town & Country Industries, a rarely mentioned ABC Supply subsidiary that distributes aluminum and sells pool supplies., It bought T&C Sales of Rockledge, FL.

Meanwhile, Lowe;’s has agreed to sell its 450 Canadian operations, which do business under the Lowe’s, RONA, Réno-Dépôt, and Dick’s Lumber banners. CEO Marvin Ellison said the Canadian operations represented 7% of the company’s sales but were diluting 60 basis points of operating margin.

SRS moved on several fronts. It purchased the two-unit, Tennessee-based Metro Roofing & Metal Supply and also bought Advanced Building Products of Tupelo, MS. Elsewhere, SRS opened a Superior Irrigation branch in Midlothian, VA, and opened new branches of its Heritage Landscape Supply Group in Little Rock, AR; Riverhead, NY; Chester Springs, PA; Aledo, Stafford, and Rockwell, TX; Alpharetta, GA; and Matthews, NC.

US LBM bought two truss plants: Georgia Truss in Gainesville, GA; and Comtech in Fayetteville, NC.

In other developments:

  • Beacon made one of the month’s biggest splashes by purchasing Coastal Construction Products, which has 18 units in the Southeast. Beacon also opened exterior stores in Burnsville, MN; Hampton, VA; and Indianapolis, while its Dealer’s Choice Distribution unit opened in Leitchfield, KY.

  • Bliffert Lumber took in Milwaukee (WI) Cabinetry.

  • Nation’s Best Holdings acquired Palmetto Home Center of Summerville, SC, and sister company Walterboro (SC) Hardware.

  • Mead Lumber grew by four yards by acquiring Teague Lumber of Grandview and Liberty, MO, and Shawnee, KS.

  • TAL Holdings bought Miller’s Home Center, which had three locations in La Grande, OR, and one in Baker City, OR. TAL also opened a new branch of its Marson and Marson unit in Ephrata, WA.

  • Drexel Building Supply purchased millwork specialist McMahon & Co. of Jackson, WI.

  • Outdoor Living Supply bought sister companies Landcare Stone of Madbury, NH, and Stratham Hill Stone of Stratham, NH.

  • Kodiak Building Partners took in Goodrich Lumber of Kingston, MA, and Albeni Falls Building Supply of Oldtown, ID.

  • New South Construction Supply acquired Malone Steel of Ponte Vedra Beach, FL.

  • Interstate + Lakeland opened a design center in Westport, CT.

  • Among other greenfield openings were Coltrain Hardware in Ayden, NC; Butters’ Ace Hardware in Thompson’s Station, TN; Curt’s Ace Hardware stores in Gray and Piney Flats, TN; and Grandfather Lumber Hardware in Pineola, NC.

  • Duffy’s Island Hardware, located on an island that’s part of Portland, ME, closed.

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