Hardware & Building Supply Dealer - October 2018 by ensembleiq

Vol. 44 No. 9

OCTOBER 2018

Drexel Building Supply IN PURSUIT OF HAPPINESS: Abby Fisher, Tyler Konen and Beth Pautsch

Bobby Fuller Fuller & Son Hardware Arkansas

“Orgill’s people are smart and they care. You can call them any time and they always know who you are.”

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Why We Like Working With Orgill: • Competitive pricing • Deep discounts and new items at the Dealer Markets • Personal relationships

Watch the video to learn how buying from Orgill makes Fuller & Son more successful!

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HBSDEALER HARDWARE + BUILDING SUPPLY

10 Product Knowlege MARKET INSIGHTS 50 Hurricane Hugo helped

changed housing

64 Smarter than the average appliance, and then some. PRODUCTS 36 Inside, outside and

all around the house

COVER STORY SUPPLY. HAPPINESS. The story of Drexel Building Supply, our 2018 ProDealer of the Year

FROM THE EDITOR 8 To blitz, or not to blitz,

at the ProDealer Industry Summit.

NEWS & ANALYSIS 10 Here’s BMC’s new CEO,

meet David Flitman

12 Central Network Retail

Designed with safety in mind.

30 DO IT BEST REPORT

Building a destination, improving logistics, and embracing customers.

Group spreads its wings

12 News Map: Lowe’s opens in Overland Park, Kan.

14 Reporters Notebook, and a rental disrupter

Got Prop 65 questions? You’re not alone.

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 New York, N.Y., 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. 44, No. 8, September 2018. Copyright © 2018 by EnsembleIQ. All rights reserved.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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Readers Respond Excerpts from reader comments:

It is healthy for our economy to see the laws of supply and demand at work. The market and innovative ideas will find the right market solution, not legislation or more immigrant labor.

COMING IN OCTOBER

Fastener Week II: The Screw Turns Following on the success of the first-ever Fastener Week video series, HBSDealer.com will host the sequel: Fastener Week II.

—glenclem, in response to “Labor shortage leads to builders raising prices.”

Meet us in Chicago

Having been in this business since the 1980’s the writing was on the wall when Orchard Supply was swallowed up by the Corporate Publicly Traded Behemoths. RIP ORCHARD SUPPLY…Say Hello to Builders Emporium, Angels, Ole’s, National Lumber, Payless Cashway and others!

The 2018 ProDealer Industry Summit, hosted jointly by the National Lumber and Building Material Dealers Association and HBSDealer, brings together the nation’s independent lumberyard leaders for three days of education and networking. Be there. Or be the first to see the highlights at HBSDealer.com. And there’s still time to register at prodealer.com.

—Jcprez, in response to “Lowe’s to close Orchard Supply.”

My first real job out of college was as a Project Manager at [Coast to Coast Hardware] in Ray [Griffith]’s Eastern division. I travelled the country setting up new stores and re-merchandising existing ones. I’d spend a few months at each job and consequently got to know the area and — especially rewarding — got to know the store owners. It started me on a path of entrepreneurship and in hardware/ building materials. It’s a road on which I am still traveling. One of the most fun jobs I have had! — Paul Kluempers, in response to “Throwback Thursday: Wizards of the Coast.”

HBSDealer Daily: Weekly Features The HBSDealer Daily Newsletter, the industry’s leading news source, features news, analysis, videos and commentary – plus these regular, weekly features. Sign up to receive your daily news at hbsdealer.com.

Monday

Tuesday

Wednesday

Thursday

Friday

Quikrete Industry Dashboard

HBSDealer Poll Question

RISI Crow’s Market Recap

Throwback Thursday

Eye on Retail

Participate in a new question each Monday on HBSDealer.com

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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FROM THE EDITOR

ProDealer Playbook Drexel Building Supply might be the only lumberyard company in the industry with a “defensive coordinator.” His name is Andy Rettler. And in response to an e-mail about the upcoming ProDealer Industry Summit in Chicago Oct. 17-19, his auto-signature proclaimed his position with the Campbellsport, Wis.-based lumberyard company as “Defensive Coordinator.” Being a fan of good comedy (my heroes are Charlie Chaplin and Alan Partridge), I figured Rettler was joking about his title. So, I asked him his thoughts on the blitz — a controversial and exciting coaching tactic used by defensive coordinators during football games. Here’s what he replied in an e-mail: “I prefer a strong front four over the blitz. However, I want that to be my tendency so that when I do blitz (since I’m a gambler), it gets home because no one expects it.” Now I’m thinking: Maybe he really is a defensive coordinator. So, I went to the Drexel Building Supply web site to look up his profile. The “Meet the Drexel Team” area features photos and descriptions of every single employee who works at Drexel. They are listed alphabetically (by first name, from Aaron to Will) with their photo and their job description. Here’s what it says under the photo of Andy Rettler: “Defensive Coordinator.” So, that’s settled (event though various subsequent reports describe

him as chief operating officer.) Drexel Building Supply’s actual, undisputed slogan is “Supplied. Happiness.” Several ambassadors of the company will bring their enthusiasm for the business to the ProDealer Industry Summit, where Drexel will be recognized as 2018 ProDealer of the Year (See story page 20.) Drexel’s award presentation will be just one of several highlights of the 2018 event, which is shaping up to be the biggest ever. For instance, St. Louis-based CHIC Lumber Co. will represent all that is right with small business as the recipient of the 2018 Independent ProDealer of the Year Award. CHIC’s Adam Hendrix will share his passion for the industry, and probably touch on his career as a Navy Seabee in his acceptance speech. (See article on page 26) And speaking of the military, you won’t want to miss the keynote address of Green Beret Commander Mark Nutsch, made famous in the recent Hollywood movie “12 Strong.” The Summit is co-hosted by HBSDealer and the National Lumber and Building Material Dealers Association. We’re proud of our involvement with the NLBMDA. And more than that, we’re excited to spend time with the exceptional group of LBM leaders, award winners, vendors and defensive coordinators who are lined up to participate in the event. Please join us. There’s still time to blitz.

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 Kathryn Homenick khomenick@ensembleiq.com CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ART DIRECTOR Regina Loncala rloncala@gmail.com MEDIA PRODUCTION ASSISTANT Betty Dong bdong@ensembleiq.com, 212-756-5134 ProDealer Industry Summit Oct. 17 to 19, Chicago www.prodealer.com In partnership with the NLBMDA, www.dealer.org Contact: Amy Platter Grant, PDIS Director of Sponsorships Publisher of Hardware + Building Supply Dealer, Drug Store News, Chain Store Age. Circulation List Manager: Nancy Speilmann, Statlistics (203) 456-3338. 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 OPERATING OFFICER, CHIEF FINANCIAL OFFICER Richard Rivera CHIEF BRAND OFFICER Korry Stagnito PRESIDENT, ENTERPRISE SOLUTIONS Terese Herbig CHIEF DIGITAL OFFICER Joel Hughes CHIEF HUMAN RESOURCES OFFICER Jennifer Turner SENIOR VICE PRESIDENT, INNOVATION Tanner Van Dusen

connect with us

Ken Clark Editor in Chief

OCTOBER HARDWARE + BUILDING SUPPLY DEALER

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SALES FOCUSED

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NEWS + ANALYSIS

BMC Names CEO David Flitman to take the helm, in Raleigh. BMC Stock Holdings named David Flitman as the company’s new president and CEO, ending an executive search that lasted more than eight months. Flitman is expected to join the company no later than Oct. 1. He will also join the company’s board of directors once on board and succeed Dave Keltner, who served as interim president and CEO since January. BMC will also settle into a new home base on Sept. 30. That’s when it will officially move its headquarters and the office of the CEO to existing offices in Raleigh, N.C. — the home of Stock Building Supply before the 2015 merger with BMC. Flitman most recently served as president and CEO of Performance Foodservice, the largest segment of Performance Food Group, a foodservice distribution company. Since going public three years ago, Flitman oversaw several acquisitions by Performance Food Group. Prior, he spent three years at Allegheny Power and had nearly a 20-year career at Dupont.

“We are pleased to welcome a leader of Dave Flitman’s caliber to the BMC team,” said David Bullock, BMC chairman. “Dave brings a wealth of knowledge and experience critical to BMC’s growth, operational excellence and customer service goals. His extensive manufacturing and distribution expertise, track record of execution in growing businesses and keen understanding of the importance of providing value-added products and services to customers make him the ideal person for this role.” In July, BMC reported second quarter net sales increased 12.6% to $998.5 million. Keltner was named interim president and CEO after the pro dealer unexpectedly parted ways with former CEO and president Peter Alexander in January. Keltner will continue to serve as a director. In a prepared statement, Flitman expressed an eagerness to roll up his sleeves. “BMC is on the leading edge of development and innovation in this industry, providing builders and

Dave Flitman

remodeling contractors with the tools and solutions needed to address a very challenging labor environment, reduce cycle times, save money and reduce waste,” Flitman said. “Given the company’s strengths, I believe that we have a tremendous opportunity to build upon that foundation to continue to grow and succeed as we focus on delivering superior service to our customers.” BMC operates across 19 states, including 45 metro markets, primarily the South and West regions. The dealer reported sales of $3.4 billion last year.

Product knowledge Product: Aspyre Collection from James Hardie Manufacturer: James Hardie Building Products, based in Ireland with U.S. headquarters in Chicago. Knowledge: Introduced at this year’s International Builders’ Show, Aspyre combines the 5/8-inch-thick Artisan siding and its distinctive shadow lines, with the smooth and versatile Reveal Panel System. The company says the combination of the two product lines leads to one-of-a-kind luxury projects. Fun fact: James Hardie fiber cement siding products crossed the 8 million homes mark in North America, and it’s closing in on 10 million homes “soon,” the company says.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

NEWS + ANALYSIS

Mac’s Hardware Joins Forces with CNRG Central Network Retail Group (CNRG) expanded its footprint into the upper Midwest through a deal with Moorhead, Minn.-based Mac’s Hardware, a family owned 50-year-old business serving farm, home and industrial customers through 14 locations. Mac’s Hardware shareholder and Chairman, Chuck McWethy, said the move was driven by the company’s desire to provide future opportunities to expand the Mac’s footprint and better serve its customers. At present, Mac’s employs almost 200 associates and operates fourteen independent hardware stores located in Minnesota, North Dakota, and South Dakota. Mac’s Hardware was established in 1965 by Otto McWethy, Chuck’s grandfather, as a provider of surplus goods. “Unique product selection and attention to the needs of the local, agricultural-based communities where we operate have been the hallmarks of

Mac’s success for more than 50 years,” McWethy said. “CNRG has the financial strength to sustain and expand our business in the future and we believe this combination will be a tremendous benefit to our customer base.” Mac’s Hardware — which carries the slogan, “Not just another hardware store” — will continue to operate under its existing brand name and all associates interested in continuing in their current positions will become part of the CNRG team. Mac’s has stores in Minnesota and the Dakotas. CNRG, a is a multi-format, multi-brand retailer operating 104 hardware stores, home centers and lumberyards in 14 states. CNRG is wholly owned by Tyndale Advisors, a subsidiary of Orgill, Inc. CNRG President John Sieggreen, said the network is excited about the opportunity to expand into the upper Midwest. “We are looking forward to bringing the possibility of expansion

Mac’s Dickinson store.

to the Mac’s brand,” Sieggreen said. “Beyond just implementing some business practices we know will benefit the Mac’s brand, we are also excited to bring some of what Mac’s does well back to other brands in our company where we serve similar customers. This partnership with Mac’s Hardware takes CNRG over the century mark in store count. We are very pleased with what we have been able to accomplish in the last seven years since CNRG was founded and look forward to continued growth.” CNRG acquired Renton, Wash.-based McLendon Hardware in April of 2017, and it acquired 28-store Marvin’s Home Centers in August 2015.

News Map: Openings, closings & acquisitions Illustration of stores in various stages of coming and going. For more retail news, visit HBSDealer.com.

michigan

kansas

Overland Park

OPENING

CLOSING

Lowe’s At the site of a former Kmart, Lowe’s opened a 120,000 sq. ft. store in a former Kmart site. It will anchor a redeveloped shopping mall that previously closed in 2014.

texas

Bay City McCoy’s Building Supply Closing in on 90 stores, McCoy’s purchased an 8.2-acre site in Bay City, Texas, roughly 80 miles southwest of Houston. A new McCoy’s location will open here by mid-2019

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

ACQUISITION

Holland Township Blain’s Farm & Fleet A. 106,000 sq. ft. Blain’s Farm & Fleet with a full drive-thru is slated to open in fall 2019. It will be the family owned company’s 42nd store.

north carolina

Glade Valley Blevins Building Supply U.S. LBM Holdings acquired Blevins Building Supply, a third-generation building materials distributor with 5 locations in western North Carolina and one in southern Virginia.

HBSDealer.com

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Assembly Line

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Built in America. Believing in America.* STIHL believes in the power of American real people, STIHL people, who help make manufacturing and our employees are STIHL the number one selling brand of proud to help rebuild our economy one gasoline-powered handheld outdoor power American-built product at a time. We equipment in America.* also believe in local businesses and thatâ&#x20AC;&#x2122;s why for more than 40 years we To become a STIHL dealer: have only retailed our products through STIHLusa.com/Dealer servicing dealers like yours. Because itâ&#x20AC;&#x2122;s

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NEWS + ANALYSIS

Stanley Goes Yard Stanley Black & Decker is purchasing a 20% stake in MTD Products Inc., the privately held manufacturer of outdoor power equipment. The move boosts Stanley’s presence in what it describes as a $20 billion global lawn and garden market. Founded more than 85 years ago and headquartered in Valley City, Ohio, MTD’s brands include Cub Cadet, Troy-Bilt, and Remington, among others. MTD has manufacturing facilities in North America, Europe and Asia, and a global distribution network. Under terms of the $234 million cash deal, Stanley Black & Decker has the option to acquire the remaining 80% of MTD beginning on July 1, 2021. “We have always viewed outdoor products as an attractive growth category for us to expand our presence beyond handheld electric products,” said James Loree, CEO and president of Stlanley. “This transaction gives us the opportunity to do that with a world class partner. MTD has a first-rate management team, talented employees and a mission, values and commitment to innovation that are very closely aligned with our own, and we are excited to move forward with them.” With 2017 revenues in excess of $2 billion, MTD manufactures and distributes lawn tractors, zero turn mowers, walk behind

Reporter’s Notebook... It has been an honor and a humbling experience to represent America’s lumber and building materials dealers as this year’s chairman of the NLBMDA. Our association is the voice of the industry in Washington and we need this unified voice more than ever right now.

A Club Cadet mower.

mowers, snow throwers, trimmers, chain saws, utility vehicles and other outdoor power equipment for both residential and professional lawn and garden customers. This partnership enhances Stanley Black & Decker and MTD’s existing commercial relationship, which currently includes the manufacture of select outdoor products under the Craftsman brand. The two companies say they will pursue revenue and cost opportunities as they introduce new products for professional and residential outdoor equipment customers. The transaction, which is expected to close in early 2019, follows Stanley acquisition of Irwin Tools in 2016, from Newell Brands, and Craftsman in 2017, from Sears Holdings.

I urge all dealers to get involved in their local associations and to consider attending NLBMDA events, particularly the Legislative Conference in the spring. The good it will do any dealer to be involved is well worth the time invested. — Rick Lierz, CEO of Franklin Building Supply of Boise, Idaho, on his past year as chairman of the National Lumber and Building Material Dealers Association. He will turn in his gavel at the ProDealer Industry Summit this month in Chicago.

Disruption alert: the Uber of rental stores? Whimiy.com wants to disrupt the rental business by offering a nationwide neighbor-to-neighbor online rental community. “So many people have products that they don’t often use and yet don’t want to sell,” said founder Rhonda Harper. “And, often people want an item for only a short period of time so it doesn’t make sense to purchase. The sharing economy is here to stay and Whimiy is the first one for items in your household,

garage, and storage unit.” In an act that could be considered sheer bravado, the Whimiy’s press release drops its own name — a contraction of “what’s mine is yours” — in the company of household words “Uber” and “Airbnb.” That’s a stretch, to say the least. But Whimiy’s founder is no stranger to big business. Harper is a former chief marketing officer at Sam’s Club, the division of Walmart. From tools and camping equipment

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

to baby products and musical equipment, subscribers of Whimiy can rent items to and from each other. The prices are determined by the owners and renters. When a member rents an item, Whimiy collects a 10% commission on the rental transaction. “We’re off to a great start,” she told HBSDealer, in response to a question about membership. But she didn’t offer any statistics.

HBSDealer.com

Koppers Introduces a New Fire Retardant Treated Wood! • FlamePRO Fire Retardant pressure treated wood products, as described in the ICC Evaluation Services, Inc. ESR-4244, meet all major model building code requirements. • UL Classified with an FR-S Rating for flame spread and smoke development values of 25 or less. • UL GREENGUARD GOLD Certification - The FlamePRO preservative has undergone rigorous testing and met stringent standards for low volatile organic compound (VOC) emissions. Products certified to this criteria are suitable for use in schools, offices, and other sensitive environments. • FlamePRO Fire Retardant pressure treated wood products are backed by a 50 Year Limited Warranty Program from Koppers Performance Chemicals Inc.* • 1 Hour Tested Wall Assembly (ASTM E119) For details refer to ESR Report 4244. • 2 Hour Tested Wall Assembly (ASTM E119) For details refer to ESR Report 4244.

For more information call 1-800-585-5161 or visit www.kopperspc.com or icc-es.org, ESR Report 4244. * Available at Koppers Performance Chemicals Inc., Attn: Consumer Affairs, P.O. Drawer O, Griffin, Georgia 30224-0249 or visit www.kopperspc.com FlamePRO treated wood products are produced by independently owned and operated wood treating facilities. FlamePRO® is a registered trademark of Koppers Performance Chemicals Inc. © 9/2018

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Pro Dealer of the Year

SUPPLYING MATERIALS …

and Happiness Drexel Building Supply is the 2018 Pro Dealer of the Year. By Andy Carlo

AT DREXEL HAPPINESS IS: Tyler Konen —Teamwork, Abby Fisher —Gratitude, Beth Pautsch —Team

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

appiness — if you scouted dozens upon dozens of pro dealers across the country, it’s not likely that you would find that word in a company’s slogan or branding efforts. Professionalism? Okay. Quality? Sure. But “Happiness?” You don’t see that one very often among dealers. But at Drexel Building Supply in Campbellsport, Wis., “Supply. Happiness” is a big part of the equation. It’s a prolific chunk of the company’s culture. And you can’t supply happiness to your customers in the wide world of lumber and building materials if good vibes aren’t being generated internally. Drexel Building Supply is among a new generation of pro dealers who maintain a strong focus on company culture. Quality service, materials, and expertise start from the inside. And if the inside of the company isn’t happy, it’s only a matter of time before feelings bubble to the surface and are shared with customers. A focus on its “team,” the company’s “Supply. Happiness” mission statement, growth, and embracing

HBSDealer.com

The Drexel Building Supply Campbellsport Team.

technology are pieces of the formula that have lead Drexel Building Supply to being selected as the 2018 Pro Dealer of the Year. Drexel has approximately $170 million in annual revenue “and growing,” says Julie Korth, the company’s chief financial officer. Nearly 98% of the company’s sales are to professional contractors, remodelers, and builders. Korth believes a tree that isn’t growing is dying. “Growth keeps us just uncomfortable enough to continue changing and growing. However, we always want to grow with our clients and team members already on the team. Bigger isn’t better. Better is better.” On May 1 of this year, Drexel officially opened its 7th and latest location in Columbus, Wis. The location features a 14,000 square-foot store and lumberyard along with a design

HBSDealer.com

center for cabinetry, countertops, and additional home design services. “We don’t want to take over the country with locations — that is not our plan, however we are always actively looking to grow,” explains Andy Rettler, chief operating officer, and “defensive coordinator,” as stated on Drexel’s website. “How we do a better job taking care of each contractor and each team

mate,” is part of the plan, however. “If our team cares more, we know expansion will organically happen,” Rettler says. It’s important to note that Drexel does not have any employees on its staff. Rather, the company has more than 300 “team” members, including 34 in the outside sales department. The dealer calls itself Team Blue, in reference to its branding and logo color. It’s a team-

HARDWARE + BUILDING SUPPLY DEALER OCTOBER 2018

Pro Dealer of the Year The Core Values of Drexel Building Supply

AT DREXEL HAPPINESS IS: Ty Schmidt — Having Fun, Jake Junk — Everything

Ethics. Do the right thing and always encourage others to do the right, honest & ethical things. This is #1, and it’s #1 for a reason. Ethics. It’s the most important.

Kari Wik — Awesome Team Members

Respect. Treat others like you would like to be treated no matter whom and no matter the situation. Balance. Manage your time for both business and personal success. Winning Attitude. Have a can-do attitude. Be positive, upbeat and stay focused. We are winners.

AT DREXEL HAPPINESS IS: Travis Malchow — Having Fun, Brad Pick — We, not ME

centric approach that also continues to move the company forward. At Drexel, the company has a strong belief in servant leadership. The pyramid chart of leadership has essentially been thrown out the door. “It’s more like circles of work,” says Caitlin Stoll — Drexel human resource leader, or as her business card says, Leader of the Happy People Department. “Our job is to love, serve, and care. Follow the Golden Rule, live in the core values of our company, and lead by our mission: Supply. Happiness.” Team Blue’s goals are completed with a continuous commitment to 1% improvement. “We try to empower our team to think change and believe in change is good,” Rettler notes. The

team also operates around 10 core values: Ethics, Respect, Balance, Winning Attitude, Communication, Development, Team Work, Change, Have Fun, and Accountability. The goals have been transformed into a mindset of running Drexel as a world class company with its people, or team, providing the purpose, drive, and uniqueness of the company. But it’s not all about work: part of the company’s culture, and an actual program at Drexel, is “Focus on Family.” Each year, full-time employees are given $100 to create a memory with their family. Whether it’s a dinner together, a camping trip, attending a sporting event, or a trip to the beach, the one stipulation is the $100 is spent on a family activity.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

Communication. Share information, ask questions, listen effectively, speak thoughtfully, and let ideas live. Development. Learn from each other. Teach, coach, and listen. Create an environment where everyone can be a star. Team Work. Value different viewpoints. Carry out the agreed upon plans. Together we achieve more. Go Blue! Change. Accept it. Embrace It. Initiate It. Do everything every day better, faster, and cheaper Have Fun. Enjoy your job. Enjoy your life. Smile more and make others around you smile too. Accountability. Know your responsibilities. Live up to your commitments.

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Pro Dealer of the Year

A page on Drexel’s site features a photo album of various team members on their actual Focus on Family event and excursions. Having fun is part of happiness and another piece of the Drexel equation. The dealer believes that it helping to furnish a project of a lifetime for its enduser customers. And the project does not necessarily have to be painful or filled with AT DREXEL HAPPINESS IS: Julie Schmitz — Happiness is Contagious!, Nick Damico — EVERYTHING! stress. “If we can make suburb of Brookfield. The purchase it fun, then they will veteran of the pole building industry — provided the dealer with an avenue to remember us, remember the project, pursued his dream of owning his own expand its market share in Milwaukee. and recommend us to others,” Stoll business. When Brittingham & Hixon Drexel went on to make 3 more says. “And it should be fun.” closed its doors after 75 years, during acquisitions in 2014 before opening its Growing in Campbellsport a building recession, Albert purchased latest store this year. Founded on April 1, 1985, as the business. In recent years the company has Campbellsport Building Supply, what is Through the site’s 100-plus year paid more attention to its team and now Drexel Building Supply was once history, the same location has been customers. By becoming a better the Brittingham & Hixon Lumberyard. home to a lumberyard under 4 different listener, providing greater care, and Joel’s father Albert Fleischmann — a owners. protecting its culture, Drexel has been Joel joined the team in 1996 and — able to grow. despite earning a college degree — he Although Drexel has witnessed some started his career at the bottom making of its contractor customers being $1 per hour stocking nails. But he rose impacted by the nationwide labor through the ranks as the company shortage, attracting people to the expanded through 3 acquisitions over If we can make industry and joining the dealer has not the next 13 years. Eventually, Joel it fun, then they been an issue. The present team at stocked enough nails and became the will remember us, Drexel acts as an excellent recruiter of sole owner of what was then a 4-unit remember the project, new team members. Team Blue grows pro dealer. He soon rebranded the and recommend us to itself. company as Drexel Building Supply. “Most people’s best days at work are The name Drexel has deep roots others, and it should when they have fun. Quoting, ordering, in southeast Wisconsin. The third be fun.” shipping, and servicing are not super acquisition made by the company glamorous. But can we make it fun?,” was Drexel Incorporated — a flooring —CAITLIN STOLL, DREXEL HUMAN RESOURCE LEADER Rettler asks. showroom that had been in business “It’s a game changer if we can.” for more than 40 years in the Milwaukee

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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Congratulations

to 2018 ProDealer of the Year Award Winner

Drexel Building Supply is being recognized for their commitment to best practices and the best values of the lumber and building material industry. Dealers Choice & CertainTeed are proud to support and congratulate Drexel Building Supply on their well-deserved acheivement.

Thank you for being a positive leader in our industry.

ROOFING

SIDING

INSULATION

GYPSUM

Dealers Choice â&#x20AC;&#x201D; The Nation's Fastest Growing Building Materials Distributor TheDealersChoice.com

INDEPENDENT

Pro Dealer of the Year

Meet CHIC Lumber Company An independent dealer hangs its many hats on service If the local Little League wants to use the state-of-the-art CHIC Lumber conference room, all they have to do is sign up. Same goes for church groups or community organizations. There was even a bridal shower in the 35-personcapacity space in Warrenton, Mo. The open-door, open-meeting policy builds community relations, and it doesn’t hurt business, either. “What we’ve found is that after these visitors see our design center, they remember us when it’s time for their own remodel projects,” said Adam Hendrix, the former Navy Seabee and second-generation owner of threeunit St. Louis-area pro dealer CHIC Lumber Co. Community involvement and business building go hand-in-hand at CHIC Lumber, the 2018 HBSDealer Independent ProDealer of the Year. Founded in 1979 by Adam’s father David Hendrix, the company name derives from its original banner: County Home Improvement Center. It has evolved over the years into a full-

CHIC Lumber: from dream homes to DIY projects.

service lumberyard, millwork and door shop specialist and design center showroom; and it is enjoying the benefits of its versatility. Hendrix’s experience in the construction arm of the U.S. Navy served the company well when the business first expanded into a custom interior door shop back in 2001. That move was a response to a shift in Andersen Window’s distribution strategy Adam Hendrix oversees a diverse operation. that led to closing of some local door businesses. Another big advancement for Another key to success is a focus on CHIC came in 2011, when it hired a its competitive advantages — and in kitchen division manager to lead its CHIC’s case, that’s service and quality. growing cabinet business. It was a “We believe there’s a competitive huge success, and led directly to the triangle of price, quality and service, creation of a stand-alone design center and that customers can get only two in 2016. out of three. For us, it’s quality and Today, four full-time designers work service. We’re not the cheapest. And with a wide range of customers in the our slogan is “Service is our specialty.” space that features high-tech work Around the industry, the business stations, product displays and open challenge of hiring looms large. spaces. “We went completely out of But CHIC Lumber considers itself the box and you really have to see somewhat insulated from the perils of it,” Hendrix said. “We can have four a tight labor market. “Fortunately for or five different groups working with us, we have very little turnover,” he designers and nobody is ever on top of said. “We’re a 37-year-old company each other.” and our average employee has been The lumber business has allowed with us for about 30 years.” CHIC to develop a customer base. But The company is a member of the Do Hendrix and his team are very clear it Best Corp. co-op., where VP of LBM that the company is much more than Gary Nackers says he’s proud to have lumber — and the specialty divisions CHIC Lumber as a member. “Adam are the key to profitable growth. Hendrix and his team demonstrate

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

Show me: A big move for the Missouri dealer was the creation of The CHIC Design Center, with plenty of room to explore and collaborate.

In the ‘competitive triangle’ of price, quality and service, CHIC makes no bones where it stands: quality and service.

what it means to be a successful lumber dealer, operating a great family business that adapts well to change and leverages the power of independence to compete and win in their marketplace,” Nackers said. “They are rightfully included in this elite group of honored pro dealers.” Beyond its business leadership, CHIC leads by example when it comes to community service. For the past five years, the pro dealer has played a big role locally in the St. Jude Hospital Dream Home program, helping families of children with serious diseases. CHIC Lumber, will receive the 2018 Independent ProDealer of the Year Award at the upcoming ProDealer

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Meet Me Around St. Louis CHIC Lumber Company operates these three diverse locations:

Industry Summit. The award, selected by the editors of HBSDealer in concert with the National Lumber and Building Material Dealers Association and industry stakeholders, is designed to recognize a highperformance company with a commitment to best practices and the best values of the lumber and building material industry. “It is such an amazing feeling to know that what we are doing here is being noticed and admired,” said Hendrix.

• Wentzville, Mo.

Wentzville Millwork: if customers can imagine it, CHIC’s trim, moulding and millwork team can build it.

• O’Fallon, Mo.

CHIC Design Center and Do it Center: Includes a cutting-edge show room with a full line of kitchen and bath displays staffed with expert designers. Pro-focused LBM center offering ranges from blue-print material take offs, to dream homes to small DIY projects.

• Warrenton, Mo.

Retail Home Center: serving the public with a full-service lumberyard and hardware store 7 days a week.

HARDWARE + BUILDING SUPPLY DEALER OCTOBER 2018

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DO IT BEST REPORT

Building a Destination Do it Best Corp. will distribute more than a $100 million in Indy By HBSDealer Staff As Do it Best Corp. prepares to welcome dealers and vendors (and prospective dealers) to its Fall market ion Indianapolis, the retail world continues to shake with disruptive forces and new technologies. Looking at the Fort Wayne, Ind.-based coop’s agenda reveals preparation for dealing with the likes of Amazon, Google and Siri — both offensively and defensively — as well as the nuts-andbolts education that allow independent dealers to build a reputation as a destination for service and knowledge. Sessions on retail blocking and

tackling for hardware stores include an all-day plumbing and electrical workshop. Paint — considered an essential traffic builder insulated from the online shopping trend — will again be highlighted on the market floor. Store design and marketing strategies — especially the co-op’s Best Rewards card program continue to evolve, and continue to build relationships with customers. And, to top it off, the co-op will once again present membership rebate checks in excess of $100 million — 108.5 million to be exact.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

Through it all, the co-op will hammer on its message that it laid out during last year’s annual meeting of shareholders — to be the first and best choice for independent home improvement. During the Market Kickoff event in May, Do it Best Corp. President and CEO Dan Starr included a common refrain for business meetings in 2018: embrace change. And he added that the co-op structure is designed to help all the members do exactly that, in a way that profits the membership. Around the show floor, developments in the paint area were described as one of the market’s brightest opportunities. The co-op’s Color Bar store-within-astore concept, introduced last spring,

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DO IT BEST REPORT Nocturnal Improvement

ABOVE: Do it Best’s Color Bar is built to boost traffic and inspire confidence. LEFT: Brad McDaniel, McDaniel’s Do it Center, Snohomish, Wash., and Mr. Friendly himself.

was embellished with an overhaul of private label paint applicators under the Best Look brand. Starr described paint as a “must-win” category for any home improvement retailer. “In an age when just about anything a customer wants can be delivered to their front door, we absolutely need to emphasize what your customers can only get when they walk through your front door,” Starr said. “It’s about creating a compelling in-store experience, and paint is a natural fit.” Another opportunity lies in paint

department brands that were recently removed from Home Depot shelves due to an expanded Lowe’s partnership with Sherwin Williams. These brands are Minwax, Cabot and Thompson’s Water Seal; as well as paintbrush brand Purdy and spray paint Krylon. Also heating up is the Connected Home arena. According to Do it Best’s Randy Rusk, communications director, the last couple of years has seen an explosion of activity. Who would have that that a wi-fi enabled furnace filter could feed data and updates and alerts to the home owners cell phone. But that’s just one example, said Rusk. “We brought back the connected home area because that continues to be a product area where there’s a lot of activity and interest, and especially a lot of new products,” he added. Do it Best’s Fall Market takes place Oct. 12-15 in Indianapolis at the Indiana Convention Center.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

An OWL Delivery program makes sense, especially in the dark If you had to pick a time when it’s most convenient — and efficient — for a hardware store to receive a delivery, a strong answer would be late at night when the store is closed. Think about it: no traffic, no store labor, and the pallets can be waiting to be broken down and stocked in the morning when the first shift shows up. Do it Best Corp. says it’s working on just such a system. And the Fort Wayne, Ind.-based co-op even has a name for these nocturnal visits: OWL Deliveries, or orders without labor. The key to the program is granting backroom access to Do it Best delivery trucks. “Our truck shows up in the middle of the night, which for us is the most operationally efficient way to deliver,” said Randy Rusk, Do it Best director of communications. “This is a new service where the store allows us access to their dock overnight, and we leave everything on a pallet in the back room.” The OWL Delivery strategy saves time and money — a powerful combination in a supply-chainchallenged overall environment. Rusk described the challenges facing the truck-based distribution industry this way: a driver shortage, compounded by rising fuel costs, multiplied by regulations that limit productivity. “There is a projected half-a-million driver shortfall at a time when there is also about a 7% uptick in volume,” Rusk said. “It’s putting a lot of pressure on the system.” Do it Best Corp. described its OWL Delivery program and other supply chain matters during the co-op’s Spring Market here in Indianapolis. President and CEO Dan Starr described investments in warehouse distribution, transportation management system, optimized routes as crucial to the success of the co-op. “These are not exactly thrilling topics, but they make a distribution company very efficient.”

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DO IT BEST REPORT

Mergy Moved into Key Role Do it Best Corp. promoted co-op veteran John Mergy to the post of VP of information technology. In this position, Mergy will be responsible for all IT-related functions at Do it Best Corp. This includes setting the strategic leadership and direction of the co-op’s IT division as well as overseeing development and project management, data center, data and integration services, support, portals, desktop and mobile devices and networks. Mergy joined Do it Best Corp. in 2005 and has served as director of application portfolio management for the past several years. In that role, Mergy currently leads all project planning and management of hundreds of IT projects on an annual basis. Mergy replaces Mike Altendorf, replaces Mike Altendorf, who retired Aug. 10. “It’s a privilege to join the exceptional

executive leadership team at Do it Best Corp.,” Mergy said. “Mike has done an incredible job building a strong, growing foundation for this division and establishing important relationships and partnerships across all John Mergy departments throughout the co-op. That foundation affords our team the opportunity to leverage technology in unique and innovative ways — to continue driving efficiencies and digital transformation throughout our organization and thereby helping our members grow.” As director of application portfolio management at Do it Best Corp., Mergy led the implementation of agile

development methodologies and product team approach, which has resulted in greater collaboration between IT and other departments on software projects. He is also credited with strengthening his team’s breadth and depth of skills through strategic development, organization and recruiting. Overall, Mergy has more than 30 years of experience across a number of diverse and technological industries, including aerospace, medical device and retail. “John’s focus on strategic, agile development is an ideal fit for the important role our IT team plays in all aspects of our organization — making us more efficient and productive on behalf of our members,” said Dan Starr, president and CEO.

Symbol of Service: Popcorn The tradition of free popcorn for customers is alive and well in Maple Valley, Wash., where Johnsons Home and Garden emphasizes a customerfriendly shopping environment. There’s free coffee, too. According to Abby Deskins, the store’s social media and marketing associate, it’s all part of a plan to give back and fit in. Free popcorn is just the beginning.

“We are community focused and always want to help out in any way we can,” said Deskins. “It’s important for us to give back to the community. We have held multiple donation drives at our store, been sponsors for local businesses and organizations, been involved in many community events, and have even provided popcorn to elementary schools.” Free popcorn is an important symbol and a longstanding tradition at the (almost) 50-year-old store. “In fact,” she says, “we are called the ‘popcorn store’ to many of our regulars. We clean our popcorn machine every night and any of the remaining popcorn goes home to one of our employees who then feeds it to her chickens. No popcorn goes to waste.” The store, affiliated with the Do it Best co-op, adds to its friendly shopping

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

environment with a fish pond in the greenhouse, where kids can sometimes feed the fish. (“Kids absolutely love it,” she says.) For adults, cooking and grilling classes tackle a variety of recipes. Community concern extends to the environment, she says. “We have reusable shopping bags to purchase and a recycling program all year round,” Deskins said. “We are a valuable resource for people to recycle their household batteries, CFL bulbs, and even drop off your old American flag to be retired by a local scout unit.” According to Deskins’ analysis, the bonds with the community are strong. Consider this: high school students on prom night are reported to have visited the store for some of the free popcorn. “I believe the best thing about our store is that we are loved by all ages,” she said.

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PRODUCTS

Inside, Outside, and All Around the House By HBSDealer Staff HBSDealer editors receive product information from every conceivable category of home improvement merchandise, and then some. That information is delivered in the form of press releases, product samples, Tweets and trade show booth visits — to name a few methods. It’s not accurate to say we’ve seen it all, but we’ve seen a lot. Here and on the following pages, we aim the Product Showcase spotlight on a handful of products that might have been overlooked in past category coverage. These editors’ picks run the gamut from the household cleaners to house-holding joists.

Bosch Blaze Laser Measure A new laser measuring device from Bosch goes the distance — 400 feet. And it’s powered by a rechargeable Lithiumion battery. The Bosch Blaze Outdoor GLM400CL Connected Laser Measure with Camera offers advanced capabilities and Bluetooth data-sharing functions. Built-in tutorials help users take advantage of the features. Boschtools.com

Cole’s Flaming Squirrel Seed Sauce For backyard birders who are tired of feeding backyard squirrels, Cole’s Wild Bird Products recommends this superhot sauce mixed into their bird seed. Birds don’t mind — in fact, they enjoy the liquid chili pepper formula, according to the company. But squirrels will hate it. Cole’s guarantees more bird visits to feeders treated with the all natural, 100% food grade seed sauce. Coleswildbird.com

Arrow High Temperature Glue Gun As seen on TV — specifically, NBC’s “Making It” reality show for DIY crafts — the Arrow GT300 PRO high temperature glue gun offers precision necessary for pro applications, as well as DIY home repair. A drip-resistant nozzle and precision glue control adjustment knob make it easy to place small dots or smooth lines on a variety of surfaces, the company says. arrowfastener.com

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

Irwin Marathon Saw Blade The Marathon circular saw blade product line is cut out for speed and durability. Its exclusive every-other-tooth grind helps the blade cut fast and provide a smooth finish. Construction carbide teeth make sure the blade won’t quit, according to the maker, a division of Stanley Black & Decker. Marathon saw blades can be used in heavy-duty construction applications, all the way to the everyday DIY-er. Irwintools.com

Richard Better Finish Wall Repair Kit Inside this package from Richard — a brand of the Hyde Group — is the easy to use Better Finish Nail Hold Filler. The re-sealable tube will last three uyears on the shelf, even after its open, according to the Massachusetts-based company. The kit here comes with everything homeowners need for a substantial repair job, includeng a 4"x4" self-adhesive aluminum wall patch. Hydetools.com

DeWalt Cordless Woodworking Tools DeWalt’s new series of cordless woodworking tools targets a variety of end users, from professional cabinet makers to general contractors. Each unit, including this 20V MAX XR brushless jigsaw, is lightweight and compact, allowing the user to get close to the work surface for controlled cuts and sanding. The tools feature texturized rubber over-molds to provide the user with a good grip in various hand positions. Dewalt.com

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Brentwood Wheel Barrow The pan of Brentwood’s heavy-duty wheelbarrows is constructed of heavy-gauge HDPE, lightweight and impervious to rust damage. Hardwood handles and a structural steel frame round out the body. Shown here is the 6 Cube HDPE, with a single 6" wide turf tire. Brentwoods are available in a range of sizes: 6, 8, and 10 cube pans. Brentwoodindustries.com

HARDWARE + BUILDING SUPPLY DEALER OCTOBER 2018

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PRODUCTS

Versatex Trim Board Versatex expanded its offering of hardwood-toned PVC trimboard with two profiles in matching, colorfast woodgrain finishes. The Canvas Series tongue- and-groove beadboard (shown here) and the bed mould are a response to builders’s demand for a fresh look and durable material. Colors replicate the black cherry, walnut or tropical macore — as well as a sunny amber tone. Versatex.com

Milwaukee Stud Tape Measures The tape measure feature EXO360 Blade Technology, featuring the longest-lasting blade that is both rip and wear resistant, according to Milwaukee Tool. A strong, protective nylon coating wraps 360° around the blade to give users the blade durability. The technology is combined with a fully reinforced frame and impact-resistant overmold. Milwaukeetool.com

Looeegee Hygenic Toilet Squeegee

Fire-Resistant I-Joist Boise Cascade has developed the AJS 24 FMJ, a fireresistant I-joist for unfinished residential basements. The ready-to-install I-joist is a safer solution for the floor above a basement, with wider nailing surfaces and longer, stronger spans for better floor performance. These I-joists are also mistake proof — designed without a specific top-and-bottom orientation to help assure correct framing. Boise.com

From Better Living Products, this innovative bowl cleaner was an award winner at the 2018 National Hardware Show in Las Vegas. Instead of wiry bristles, Looeegee promises homeowners 30 micro squeegee blades built into a non-stick flexible silicone pad. According to the manufacturer, the result is faster more effective cleaning, with fewer drips and germs. Dispenser.com

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

COLOR-FAST OPTIONS

PRODUCTS Trex Protect Joist Tape and Beam Tape Trex Protect Joist Tape and Beam Tape is a self-adhesive butyl tape designed to protect wooden joists and beams from moisture that can lead to rot, splitting and the loosening of deck screws and fasteners. It also acts as a barrier between wood and galvanized metal used in construction hardware such as joist hangers. Trex.com

E-cloth Europe’s no. 1 chemical-free cleaning company, e-cloth has been sold in the United States since 2008. The microfiber technology uses water — just water — for general-purpose cleaning, or for cleaning specific rooms or surfaces (stovetops or windows). The company was named one of a handful of Ace Hardware vendor partners of the year for 2018. Ecloth.com

Fiskars Pro Utility Knives A lineup of knives for pros is described as sharper, smarter and more durable. It includes improved ergonomics such as multiple grips that provide control regardless of the blade’s position and a Softgrip with “strategic texturizing” to enhance comfort. The CarbonMax Utility Blade keeps its edge longer than standard blades, the company says. Fiskars.com

AZEK Porch AZEK Building Products has introduced four new colors to its AZEK Porch line of high performance, capped polymer porch boards. The new AZEK Porch Vintage colors include Mahogany (shown here), Dark Hickory, Coastline and Weathered Teak — all variegated colors, inspired by exotic hardwoods, with a wire-brushed, natural matte finish. Nine colors in all are available. azek.com

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

FAST-DRY SEAL THAT WON’T CRACK? WE HAVE A CAULK FOR THAT.

LATEX ULTRA WINDOW & DOOR White Lightning® Latex Ultra’s high-flex polymers prevent cracks and splits common with most caulks. It creates a lightning-fast waterproof barrier to protect doors, windows and all exteriors from damaging moisture. And true to its name, it dries fast. Customers can paint over it in just 30 minutes. Customers want fool-proof window and door protection? We have a caulk for that! Latex Ultra. Learn more about the complete White Lightning line of made in the U.S.A. products. Visit www.wlcaulk.com or call 800-241-5295. © White Lightning Products

PRODUCTS

A Better, Safer Workplace Fuels Hancock Lumber By Erin Plummer Marketing + Communications Director Hancock Lumber Over the course of each year Hancock Lumber organizes a wish list of capital improvement projects across their entire business — from the retail lumberyard division to sawmill manufacturing, and now their truss manufacturing facility. The company believes strongly in reinvesting in their business and puts a significant amount of money directly back in the operations. When evaluating capital projects and deciding what to do one of the most important aspects is how the project will impact the team. Estimated pay back and profitability are part of the conversation, but not the only priorities. How will the potential

upgrades improve the lives of the people that work at Hancock Lumber? How will this create a safer workplace its people? How will a bottleneck that affects the entire process be alleviated, help employees and provide a better product to our customers? Take an inside look at a recent capital investment at Hancock’s Pittsfield eastern white pine manufacturing facility, one of their three sawmills that produces 24 million board feet annually. The company recently upgraded the back half of the mill installing an optimized trimmer, overhauling the entire back end of the facility. The

Supervisor Rodney Williams inspects upgrades at Hancock Lumber’s Pittsfield, Maine sawmill.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

purpose of the sawmill trimmer is to remove wane and other defects from the ends of each board; it is the last value-added process in the sawmill. Prior to this investment the trimmer was a manual one, so a sawmill employee would look at each board manually and decide what the trimming solution was at a very high rate of speed — 45 to 50 lugs a minute. Both ends would have to be inspected and the boards would have to be evaluated for wane and other defects. During this quick process, the operator had to position each board by hand then choose a trimming solution by hitting a button or series of buttons to drop the saws and trim the wood, all while the wood moved by at a rapid rate. It’s hard to even imagine now that every board passing through the sawmill was trimmed manually — a job nearly impossible for a human. General manager, Dennis Verrill, considers the upgraded sawmill a ‘dream come true’, “Safety, quality, and engagement is what this technology is all about. Our employees are safer and in a more ergonomically friendly environment not having to handle lumber manually. The system reads every ¼" with an infinite fence resulting in improved quality. Top of the line technology helps output consistent results, along with multiple screens that tell you if you have any quality issues that send emails/text to alert you. Down time from human error and mechanical issues have been greatly reduced. We love everything about this upgrade

HBSDealer.com

DO IT ONCE. DO IT RIGHT.

BUILT TO BE

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PRODUCTS at our facility; I could go on and on!” The new, optimized system scans the board, top and bottom, to determine the best solution, and will automatically feed the board through the sawmill trimmer. State-of-the-art lasers measure every quarter of an inch. Additionally, Hancock Lumber also rebuilt all the mechanical parts of the drop sorter. While the project will improve Pittsfield’s productivity, most importantly it creates a better work environment for the employees. Rodney Williams who supervises the Pittsfield sawmill discussed the improvements, “This investment in the new trimmer brings us consistency. Instead of trying to balance an operator that can keep pace and try to make the correct decision, it doesn’t matter who feeds the trimmer. The same decision is made at the same pace, providing a level of consistency that our Pittsfield sawmill team has never had. The biggest win with this project, however, is removing physically demanding jobs — this has changed the atmosphere in the sawmill in a very positive way.” Eliminating down time at the trimmer helps predict daily production more accurately, helping smooth out the work flow. When a piece of equipment doesn’t function properly it affects the entire process. Baxley Equipment handled all the upgrades delivering state-of-the-art equipment and customer support. Efficiency has gone up tremendously, sawmill yield has improved, planer mill shrinkage has been reduced, and grade recovery has improved,” Kevin Hynes Sawmill COO commented. “But, the real meaningful impact has been on our employees. Hearing from our team how much better their work is makes this all worthwhile — every employee in the mill has been a beneficiary of this project.” Hancock Lumber’s outside board of directors and leadership team recently toured the facility, seeing first hand the new optimized trimmer project and the subsequent benefits from the investment.

Safer is Better A recent HBSDealer reader survey found that protective gloves are the most commonly sold job-site safety item. No surprise, given the myriad of uses for protective gloves in and out of the hardware and building supply channel. What else is out there to protect customers? Vote-getting sub-categories were helmets or hard hats (15%); Eye protection (14%); visibility vests (9%) and harness equipment (8%). Here are a few other products with safety features front and center.

Scepter gas tank

Fewer gas spills mean higher safety. The SmartControl fuel container from Scepter is designed for fast fills without spills, the company says. The key to the new product is an easy-to-pour spout and a flame mitigation device for extra consumer protection. The spout and its controllable flow makes filling everything from lawnmowers to recreational vehicles faster and cleaner. The one-, two-, and five-gallon sized fuel containers are also available for diesel and kerosene storage.

Gear Keeper tool tethers

Injury, damage and lost work hours resulting from untethered tools falling from high places is a real problem. According to Liberty Mutual’s Safety Index, falling object accidents cost U.S. industry almost $6 billion last year. With those numbers in mind, Ventura, Calif.-based Gear Keeper’s new family of ergonomically constructed Super Coil anchored tool tethers have a few new safety features. Designed for tools weighing up to 25lbs, Gear Keeper’s proprietary manufacturing process minimizes “extension” arm fatigue while in use but equally important, minimizes entanglement issues when climbing or working in confined areas.

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

Crescent/Wiss snips

Designed for safety and performance, the Crescent Offset Straight Snips, allowing users to cut sheet metal more safely with offset blades that keep hands clear of the work while cutting. Compound lever action, combined with precisioncast serrated blades, reliably cuts up to 18 gauge steel with 20% less effort, the company says. Extended single-material ergonomic grips help reduce hand fatigue, while the ergonomic latch can easily be opened or closed with one hand.

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MARKET INSIGHTS

Feeling the Pain Job-site safety concerns grow in a tight labor market The third quarter 2018 USG Corporation + U.S. Chamber of Commerce Commercial Construction Index (Index) indicates skilled labor shortages will have the greatest impact on commercial construction businesses over the next three years. The report revealed 88% of contractors expect to feel at least a moderate impact from the workforce shortages in the next three years with over half (57%) expecting the impact to be high/very high. The skilled labor shortage has been consistently identified as a major issue facing the industry, but it is now reported by 80% of contractors to be impacting worker and jobsite safety. In fact, the Q3 report found that a lack of skilled workers was the number one factor impacting increased jobsite safety risks (58%). “The commercial construction industry is growing but the labor shortage remains unresolved,” said Jennifer Scanlon, president and CEO of USG Corporation. “As contractors are forced to do more with less, a renewed emphasis on safety is imperative to the strength and health of the industry. It continues to be important

for organizations to build strong and comprehensive safety programs.” As contractors grapple with a scarcity of skilled workers, findings show a majority are working to improve the overall safety culture on the jobsite (63%) and at their firm’s offices (58%). However, the indicators that were reported to have the highest impact on improving safety culture and outcomes are those that engage employees throughout the organization. This includes developing training programs for all levels of workers (67%), ensuring accountability across the organization (53%), empowering and involving employees (48%). Other indicators reported include improving communication (46%), demonstrating management’s commitment to safety (46%), improving supervisory leadership (43%) and aligning and integrating safety as a value (42%). In addition to the skilled labor shortage, the report found addiction and substance abuse issues are a factor in worker and jobsite safety. Nearly forty% of contractors are highly

Top Strategies Used by Contractors to Reduce Safety Risks Due to Workforce Shortages

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OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

concerned over the safety impacts of worker use/addiction to opioids, followed by alcohol (27%) and marijuana (22%). Notably, the report showed that while nearly two-thirds of contractors have strategies in place to reduce the safety risks presented by alcohol (62%) and marijuana (61%), only half have strategies to address their top substance of concern: opioids, which is a newer growing concern. The opioid epidemic cost our economy $95 billion in 2016, and could account for approximately 20% of the observed decline in men’s labor force participation. “The opioid crisis has both human and economic costs,” said Neil Bradley, chief policy officer of the U.S. Chamber. “The U.S. Chamber of Commerce remains committed to helping combat the opioid epidemic, which continues to devastate too many families, communities, and industries every day. While there is no one-size-fitsall answer, a multipronged legislative approach is a critical first step.” Overall contractor sentiment saw a slight boost in optimism with an Index score of 75 in the third quarter — up two points from Q2 2018. The Index looks at the results of three leading indicators to gauge confidence in the commercial construction industry — backlog levels, new business opportunities and revenue forecasts — generating a composite index on the scale of 0 to 100 that serves as an indicator of health of the contractor segment on a quarterly basis. The research was developed with Dodge Data & Analytics (DD&A), provider of insights and data for the construction industry, by surveying commercial and institutional contractors.

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MARKET INSIGHTS

The Evolution of Hurricanes and Building Products By Ken Ryan Randy Shackelford has been tracking hurricanes for years — not as a meteorologist or storm hunter, but as manager of codes and standards for Simpson Strong-Tie, creator of structural products for buildings and homes. Much like a representative of the National Transportation Safety Board (NTSB) will investigate the scene of a civil transportation accident, Shackelford will visit an area following a hurricane in hopes of gathering useful information for future product development. To him, names like Hugo, Andrew and Katrina are synonymous with landmark hurricanes that yielded meaningful changes in the building materials industry. “We learn something from every hurricane,” he told HBSDealer. “There was a big change in 1989 with Hurricane Hugo [which struck the Southeastern U.S.]. Before that there was a hodgepodge of code and code enforcements and houses weren’t given that much attention, but after Hugo we learned there were houses designed that went undamaged while next door there were homes that were heavily damaged. We went out to find out why. When we pay attention to these things, we learn that we get great results.” In 1992, for example, Hurricane Andrew’s lesson was that building codes in South Florida’s Dade County needed upgrading, specifically requiring impact windows, stronger ties between roofs and walls, and securing roof shingles with nails instead of staples. In Florida, roof straps that connect a home’s roof to the foundation became mandatory in areas where 120 mph winds can be expected. In coastal areas, Shackelford

Simpson Strong-Tie’s Tuss screw fastens trusses and rafters to top plates as an alternative to hurricane clips.

said new structures are required to have a “continuous load path” that directs wind loads on the roof and walls down to the foundation. Continuous load path is a method of construction that uses a system of wood, metal connectors, fasteners (like nails and screws) and shear walls to hold the structural frame of the house in one piece. A continuous load path is critical during a storm because it helps hold the house together when high winds try to pull it apart, according to Shackelford. This has led to widespread use of tie-down straps, J-bolts, cable ties, expansion bolts, hurricane clips and plates. Other proven ideas to prevent wind damage include strengthening gable ends, limiting roof overhangs, using glue and ring shank nails on roof sheathing, taping sheathing seams, and

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

extending fascia boards below the soffit of overhangs. Shackelford said there is a new trend toward “code-plus” programs and a focus on resiliency with regarding to hurricane-resistant building. “Over the last 10 years or so code-plus programs have evolved, particularly the IBHS Fortified program (disastersafety.org/ fortified). This program has specific levels of improvements that can be made in steps (Bronze, Silver, Gold) to build a home with better storm protection than the code minimum. The concept of resilience is also becoming important.” A group from within the building industry has defined resilience as “the ability to prepare and plan for, absorb, recover from, and more successfully HURRICANES continued on page 76

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Cary Anderson brings 25+ years of LBM industry-speciﬁc knowledge to the already strong KCS team. When asked why he chose to work for KCS, Anderson’s response was simple yet impactful. Company Culture. KCS is customer focused from the top of the business all the way down the line. KCS is the right size business with nearly 600 employees working together as teams in oﬃces to make sure that every customer need is met. What sets K8 apart from the other ERP solutions?

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MARKET INSIGHTS When it comes to selling projects to your customers, knowledge is power.

Following Leads, and the Path to Higher Margins Recently a friend in the home remodeling business commented on the leads being sent by product brands he uses. “Don’t they understand, right now, I’m up to here (places hand over head) with work I can’t get to?” Therein lies the question: do leads have a role or value when the industry is rolling and labor is tight? And then there are those who say, “I’m not buying now, just looking.” What to do with them? There certainly seems to be no time to hold their hand.

First, let’s start with the lead itself. Knowing the brand didn’t create the lead, the customer did, indicates an interest in a product or service being offered. And very few products in the building arena are so aspirational customers inquiring aren’t already contemplating. In fact, proprietary research created by Brunner shows many (maybe most) don’t become aware of building product brands until they enter the consideration phase and start to research online. Still,

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

the question remains, when are they actually going to buy and how much are they willing to spend? Longer Lead Time Equals Higher Margins What happens to leads that aren’t considered hot (meaning buying today)? In the same research iteration spearheaded by Brunner, we found among a client’s total leads from the prior year, where the lead indicated a purchase was six months or more in

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MARKET INSIGHTS the future, there was a 70% conversion rate. And the average spend was significantly higher than the average spend of the ‘buy now’ hot lead. Often, as it turns out, those buying today have an issue to alleviate. Maybe their HVAC system quit. A tree fell on and destroyed the deck. Or, a storm ruined the roofing shingles and there’s a leak. The immediate thought? “Quick! When can I get someone out here?” Daily, we read how little the average person has set aside for emergencies. And for most, home repair and maintenance represents more than a small bump in the road. Unsurprisingly, price becomes the driving factor as consumers look for the most inexpensive way to alleviate their issue. And thus, emerges the reason today’s hot lead represents significantly lower average sales and margins than leads with longer purchasing cycles.

Can’t Handle More Jobs Now? If you, like many businesses, can’t handle more projects than what you already have in the hopper, this winter’s “improve my business” assignment should be figuring out how to improve the margin and profitability of each job you do in 2019. And those longer ‘leads’ can help you do it. They’re comprised of customers that are planning ahead and looking to upgrade their current state. They want advice, and your expertise, on the best way to get what they want. They want value, but as Brunner’s research showed, spend more on average. After all, they planned for it. But what if you’re a contractor that doesn’t have the time or people to keep up with these leads? Then Marketing Automation sounds like something you should be doing. But if you find it hard to get your work

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

done, much less add something else to the to-do list, you’re not alone. Many customer relationship management (CRM) providers are offering easier solutions to solve that exact challenge. Maybe CRM is a way to turn annoying leads into a more manageable, higher margin, more profitable business. Most home product companies have trouble placing these longer sales cycle leads. The irony is they are often the more valuable leads. And, while these customers want to start a timely discussion, they don’t need your install team today. In fact, they too, would like to plan it at some point in the future. With the upgrades that get them excited. In other words, a high-value referral. Louis Sawyer is chief strategy officer at Brunner. Visit Brunnerworks.com.

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MARKET INSIGHTS

Prop 65 Goes into Action By Andy Carlo Ken Dunham, executive director of the West Coast Lumber & Building Material Association (WCLBMA), fields about 15 to 20 calls per day about Proposition 65. As of Aug. 30, Prop 65 expanded its reach into day-to-day business dealings in California while impacting retailers across the state — and beyond. The proposition requires the state to maintain and update a list of chemicals known to the state to cause cancer or reproductive toxicity. It is overseen by the state’s Office of Environmental Health Hazard Assessment, which is the lead state agency for assessing health risks posed by environmental contaminants. California’s move has put pressure on both retailers and suppliers of product. Retailers must post proper signage that warns consumers of the dangers and toxins contained in some products. Noncompliance could result in heavy fines or unwanted litigation. Retailers also face the challenge of recognizing just how much warning is sufficient enough for consumers. The WCLBMA has recommended that dealers place wood dust warnings at the point of sale. But it’s also told dealers that it’s probably a good idea to have warnings at the point of selection just to slow down any actions against a business. The California Office of Environmental Health Hazard Assessment (OEHHA) has suggested warning signage the help clarify the

vagueness of prior warnings. But the issue of the issue of responding to lawsuits and shakedowns common in the past have still not been addressed. “But OEHHA is aware of our prior discussions with the attorney general’s office on the agreement we reach,” Dunham says. Proposition 65 was originally enacted as a ballot initiative in California in 1986 as a method of protecting the state’s drinking water sources from being contaminated with chemicals known to cause cancer, birth defects or other reproductive harm. Knowing what suppliers are putting into products has been a major concern of the retailers and dealers alike. “We are in this together — dealers and suppliers,” Dunham says, noting that the phone calls he’s received about Prop 65 has ranged from dealer members and suppliers, to nonmembers. The WCLBMA has put together a thorough guide about how dealers can address Prop 65 while avoiding fines and litigation. Dunham explains that members who follow the guide are likely to avoid any static. Earlier this year the WCLBMA provided several seminars on

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

the topic of addressing Prop 65 and its impact on lumber dealers. “This is compendium of everything that was covered — but I wanted to make it available to our members,” Dunham says. The guide is a compliance manual that addresses Prop 65 needs of the lumber, hardware, and building products industry. Attorney Anthony Sampson, who led the seminars about Prop 65 for the WCLBMA and is an expert on the subject, assisted the association in the putting the package together. “Most of our dealer members are aware that you have to make these changes,” Dunham says.

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MARKET INSIGHTS

Intown Ace Makes the All Star Team There’s something about Intown Ace Hardware that makes visitors feel happy. Employees look happy, too. Even visiting retailers on educational missions from out of town notice the positive vibe. “There is just some kind of energy in here,’ said Dave Jones, owner. “I don’t know exactly what it is, but if I could bottle it, I think I’d be on the Forbes list. We have an eclectic product mix and a layout that makes our store a fun place for people to shop.” Ace Hardware Corp. has also noticed something special about Intown Ace Hardware. Intwon was a 2012 “Coolest Hardware” honoree. And at the co-op’s fall market, Ace bestowed upon Jones the title of “2018 Ace All-Star Retailer.” The award is given each year to an owner or owners of one retailer for its extraordinary fundraising, leadership skills, innovation and commitment to Children’s Miracle Network Hospitals. Ace’s vendor partner Duracell is donating $25,000 in Intown Ace’s name to the store’s hometown hospital, Health Care of Atlanta. “That’s the real benefit of the award,” said Jones. “A check in our name to the hospital.” Intown Ace’s path to extraordinary fundraising was fueled by a diminutive ambassador of the Children’s Miracle Network, nine-year-old Parker Grelecki, the Ace Hardware Foundation’s fundraising “All Star” poster child of 2015. Parker, lives in the area. And his appearances in the store put a friendly face on Ace’s fundraising efforts. “He’s a live wire,” Jones said. “He would go behind the counter, get on the radio, and he just charmed the heck out of everybody. Seeing him and

understanding his story made it very easy for all the cashiers and the whole team to get behind it.” Parker’s story is one of overcoming adversity. He was born with excessive fluid in his brain, a condition that has required therapy from a very young age and multiple operations. The team at Intown Ace made a big friend in little Parker Grelecki. About four years ago, the store stepped on the fundraising accelerator. Intown Ace Hardware’s approach Since then, annual fundraising grew serves as an example of the kind of from $495 to more than $31,000. It community involvement that Ace CEO started with a simple dollar raffle for John Venhuizen encouraged during the grills, and progressed to “round up” co-op’s recent convention in Chicago. donations — customers agreeing to let “We have to remember it’s way bigger the store keep the change for a good than just money,” he said. “We’ve got cause. Also at Intown and many other to make distinctive impacts in the Ace stores around the country, blue communities we serve.” buckets are a symbol of charity. For a Jones says collecting for charity $5 contribution to CMN, customers get through a “Round-Up” program at the a bucket, plus 20% off any merchandise point of sale is a concept that plays that they can squeeze into it. Intown well everywhere. “At dealer events, sold about 330 CMN buckets last year. we talk about what we’re doing and Intown’s annual fundraising goal is how easy it is. It’s painless. The money to achieve a spot in the top 10 of Ace rolls in and it’s a feel good thing for single-store retailers. For these 10 everybody.” stores — and also the top 5 multi-store One particular advantage that Intown Ace retailers — Duracell contributes a enjoys is proximity to Children’s $10,000 donation to each store’s local Healthcare of Atlanta, which has built CMN hospital. In the latest tally, Intown a reputation as a facility that cares was comfortable in the fourth position. about helping kids, regardless of their (Sitting at the top was Cypress Ace ability to pay, he said. Only about 2.5 Hardware of Houston, the 2017 Ace All- miles separates the hospital from the Star honoree.) hardware store. “So many people in Receiving the All-Star award, which the community have been touched by considers fund-raising as one of several that hospital and have received overfactors, was a complete surprise to the-top care,” Jones said. “Our fundJones. “Parker’s dad sprung it on me,” raising gives many of them an easy he said. way to give back.”

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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MARKET INSIGHTS

US LBM, Kodiak Continue Their Deal-Making Ways U.S. LBM Holdings and Kodiak Building Partners, two high-profile acquirers of independent LBM businesses, were at it again in recent weeks with two headline-making acquisitions. At the receiving end of the deal were Blevins Building Supply of North Carolina and Direct Lumber and Door of Denver. The bigger of the two was the U.S. LBM deal, involving , 5-unit Blevins Building Supply, operating in western North Carolina and southern Virginia. U.S. LBM Holdings has acquired Blevins Building Supply, a building materials distributor with 5 locations in western North Carolina and one in southern Virginia. Blevins Building Supply will continue to operate under the Blevins name as a unit of U.S. LBM’s Parker’s Building Supply, which has 25 locations in Texas and California. Third generation owner Bill Blevins, who has led the company for more than 60 years, will continue with Blevins in an advisory role, with General Manager Randy Miller leading day-to-day operations. Blevins will also continue its relationship with Do it Best, the secondlargest home improvement co-op in the building products industry. Based in Buffalo Grove, Ill., U.S. LBM is one of the largest Do it Best dealers in the country. Founded in 1946 by Quincy and Wayne Blevins, Blevins Building Supply is a provider of specialty building materials, including roofing, cabinetry,

windows, appliances, insulation and paint, to pros and homeowners in North Carolina and southern Virginia. With this acquisition, U.S. LBM expands its presence in the rapidly growing North Carolina market and adds the company’s first location in Virginia. “Parker’s and Blevins have complementary operating models and share the same principles of providing superior customer service and a wide catalog of products to both do-it-yourselfers and building professionals,” said Parker’s Building Supply President Chris Rivers. “We’re pleased to welcome the Blevins team to the Parker’s family and the greater U.S. LBM network.” Prior to this acquisition, U.S. LBM operated more than 240 locations in 29 states. For the first six months of 2018 U.S. LBM generated sales of $1.57 billion, rising 7.5% from sales of $1.46 billion during the first half of 2017 Kodiak Building Partners purchased all of the operating assets of Direct Lumber and Door in a deal that closed Sept. 6. Located in the Denver, Colo. market, Direct Lumber and Door offers lumber, trusses, millwork, and hardware. They will soon add a panel plant to the mix, Kodiak said. Direct Lumber and Door was founded in 2000 by Russ Brown as Multi-Family Building Products. After Tom Kostelecky joined the company in 2012, its name was changed to Direct

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

Lumber and Door. According to Kodiak, Brown will retire and Kostelecky will continue to lead Direct Lumber and Door as its president. Kostelecky will also join the ownership ranks of Kodiak. Additional terms of the acquisition were not disclosed. “Kodiak’s culture and operating model fit so well with who we are at Direct Lumber and Door,” Kostelecky said. “Because service has been the priority that has set us apart from our competitors, we give the credit to our family of employees. Kodiak puts employees first, and that will allow us to continue to successfully serve our market.” Based in Littleton, Colo., Kodiak Building Partners operates in 71 facilities in Texas, Florida, Colorado, Arizona, Delaware, Massachusetts, Michigan, Wisconsin, Minnesota, and Maryland.

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SLANT TOP PRESSURE TREATED DECK POSTS PRESSURE TREATED PLYWOOD YELLAWOOD COLOR-FULL COLOR INFUSED FACTORY APPLIED WATER REPELLENT YELLAWOOD OUTDOOR FASTENERS STARBORN HIDFAST FASTENMASTER OUTDOOR LIVING TRUCK FLEET SALES SUPPORT MARKETING TRAINING DIFM DIY REPUTATION ACCESSORIES OSRS #1 PRIME #2 PRIME DSS C&BTR 5/4 STANDARD 5/4 PREMIUM AZEK TIMBERTECH JAMES HARDIE AERATIS TANDO EDGEFAST COPPER CARE TENINO SPACEMAKER DEXERDRY FIBERON PRESSURE TREATED DECKING: KILN DRIED AFTER TREATMENT MASTERDECK RAINWOOD YELLAWOOD SELECT KDAT YELLAWOOD SUPERSELECT GLULAM PORCH COLUMNS YELLAWOOD ARCHITECTURAL TRIM KDAT TONGUE AND GROOVE PORCH FLOORING PRESSURE TREATED HANDRAILS PRESSURE TREATED SPINDLES PRESSURE TREATED BALUSTERS SQUARE 2 ENDS BEVEL 1 END SCALLOPED 2 ENDS PRESSURE TREATED STEP STRINGERS PRESSURE TREATED STEP TREADS WITH V-CHANNELS AND BULLNOSE EDGE PRESSURE TREATED WOOD LATTICE: SQUARE DIAMOND PRIVACY LATTICE STRIPS POST CAPS: BALL ACORN SMALL BALL FRENCH GOTHIC PINEAPPLE OCTAGON CONTEMPORARY PRESSURE TREATED FENCE PANELS: DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX MINI STOCKADE FENCH GOTHIC ARCH TOP FENCING HALF MOON SCALLOP TOP PRESSURE TREATED FENCE PICKETS PRESSURE TREATED GATES DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX SPACED FRENCH GOTHIC PRESSURE TREATED SPLIT RAIL FENCING 2-HOLE 3-HOLE LINE CORNER END PRESSURE TREATED CORRAL BOARD ROUND STOCK FENCING POLE BARN PILING DIMENSIONAL LUMBER PRESSURE TREATED BOARDS KDAT SQUARE-EDGE RADIUS-MILLED EDGE PRESSURE TREATED TIMBERS ROUGH OR DRESSED SIDING LOG CABIN T1-11 RB&B PATTERN STOCK SPECIALTY POSTS PRESSURE TREATED MAILBOX POSTS STANDARD FRENCH GOTHIC DOUBLE V-GROOVE FANCY OCTAGON SLANT TOP PRESSURE TREATED DECK POSTS PRESSURE TREATED PLYWOOD YELLAWOOD COLOR-FULL COLOR INFUSED FACTORY APPLIED WATER REPELLENT YELLAWOOD OUTDOOR FASTENERS STARBORN HIDFAST FASTENMASTER OUTDOOR LIVING TRUCK FLEET SALES SUPPORT MARKETING TRAINING DIFM DIY REPUTATION ACCESSORIES OSRS #1 PRIME #2 PRIME DSS C&BTR 5/4 STANDARD 5/4 PREMIUM AZEK TIMBERTECH JAMES HARDIE AERATIS TANDO EDGEFAST COPPER CARE TENINO SPACEMAKER DEXERDRY FIBERON PRESSURE TREATED DECKING: KILN DRIED AFTER TREATMENT MASTERDECK RAINWOOD YELLAWOOD SELECT KDAT YELLAWOOD SUPERSELECT GLULAM PORCH COLUMNS YELLAWOOD ARCHITECTURAL TRIM KDAT TONGUE AND GROOVE PORCH FLOORING PRESSURE TREATED HANDRAILS PRESSURE TREATED SPINDLES PRESSURE TREATED BALUSTERS SQUARE 2 ENDS BEVEL 1 END SCALLOPED 2 ENDS PRESSURE TREATED STEP STRINGERS PRESSURE TREATED STEP TREADS WITH V-CHANNELS AND BULLNOSE EDGE PRESSURE TREATED WOOD LATTICE: SQUARE DIAMOND PRIVACY LATTICE STRIPS POST CAPS: BALL ACORN SMALL BALL FRENCH GOTHIC PINEAPPLE OCTAGON CONTEMPORARY PRESSURE TREATED FENCE PANELS: DOG EAR STOCKADE BOARD-ONBOARD SHADOWBOX MINI STOCKADE FENCH GOTHIC ARCH TOP FENCING HALF MOON SCALLOP TOP PRESSURE TREATED FENCE PICKETS PRESSURE TREATED GATES DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX SPACED FRENCH GOTHIC PRESSURE TREATED SPLIT RAIL FENCING 2-HOLE 3-HOLE LINE CORNER END PRESSURE TREATED CORRAL BOARD ROUND STOCK FENCING POLE BARN PILING DIMENSIONAL LUMBER PRESSURE TREATED BOARDS KDAT SQUARE-EDGE RADIUS-MILLED EDGE PRESSURE TREATED TIMBERS ROUGH OR DRESSED SIDING LOG CABIN T1-11 RB&B PATTERN STOCK SPECIALTY POSTS PRESSURE TREATED MAILBOX POSTS STANDARD FRENCH GOTHIC DOUBLE V-GROOVE FANCY OCTAGON SLANT TOP PRESSURE TREATED DECK POSTS PRESSURE TREATED PLYWOOD YELLAWOOD COLOR-FULL COLOR INFUSED FACTORY APPLIED WATER REPELLENT YELLAWOOD OUTDOOR FASTENERS STARBORN HIDFAST FASTENMASTER OUTDOOR LIVING TRUCK FLEET SALES SUPPORT MARKETING TRAINING DIFM DIY REPUTATION ACCESSORIES OSRS #1 PRIME #2 PRIME DSS C&BTR 5/4 STANDARD 5/4 PREMIUM AZEK TIMBERTECH JAMES HARDIE AERATIS TANDO EDGEFAST COPPER CARE TENINO SPACEMAKER DEXERDRY FIBERON PRESSURE TREATED DECKING: KILN DRIED AFTER TREATMENT MASTERDECK RAINWOOD YELLAWOOD SELECT KDAT YELLAWOOD SUPERSELECT GLULAM PORCH COLUMNS YELLAWOOD ARCHITECTURAL TRIM KDAT TONGUE AND GROOVE PORCH FLOORING PRESSURE TREATED HANDRAILS PRESSURE TREATED SPINDLES PRESSURE TREATED BALUSTERS SQUARE 2 ENDS BEVEL 1 END SCALLOPED 2 ENDS PRESSURE TREATED STEP STRINGERS PRESSURE TREATED STEP TREADS WITH V-CHANNELS AND BULLNOSE EDGE PRESSURE TREATED WOOD LATTICE: SQUARE DIAMOND PRIVACY LATTICE STRIPS POST CAPS: BALL ACORN SMALL BALL FRENCH GOTHIC PINEAPPLE OCTAGON CONTEMPORARY PRESSURE TREATED FENCE PANELS: DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX MINI STOCKADE FENCH GOTHIC ARCH TOP FENCING HALF MOON SCALLOP TOP PRESSURE TREATED FENCE PICKETS PRESSURE TREATED GATES DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX SPACED FRENCH GOTHIC PRESSURE TREATED SPLIT RAIL FENCING 2-HOLE 3-HOLE LINE CORNER END PRESSURE TREATED CORRAL BOARD ROUND STOCK FENCING POLE BARN PILING DIMENSIONAL LUMBER PRESSURE TREATED BOARDS KDAT SQUARE-EDGE RADIUS-MILLED EDGE PRESSURE TREATED TIMBERS ROUGH OR DRESSED SIDING LOG CABIN T1-11 RB&B PATTERN STOCK SPECIALTY POSTS PRESSURE TREATED MAILBOX POSTS STANDARD FRENCH GOTHIC DOUBLE V-GROOVE FANCY OCTAGON SLANT TOP PRESSURE TREATED DECK POSTS PRESSURE TREATED PLYWOOD YELLAWOOD COLOR-FULL COLOR INFUSED FACTORY APPLIED WATER REPELLENT YELLAWOOD OUTDOOR FASTENERS STARBORN HIDFAST FASTENMASTER OUTDOOR LIVING TRUCK FLEET SALES SUPPORT MARKETING TRAINING DIFM DIY REPUTATION ACCESSORIES OSRS #1 PRIME #2 PRIME DSS C&BTR 5/4 STANDARD 5/4 PREMIUM AZEK TIMBERTECH JAMES HARDIE AERATIS TANDO EDGEFAST COPPER CARE TENINO SPACEMAKER DEXERDRY FIBERON PRESSURE TREATED DECKING: KILN DRIED AFTER TREATMENT MASTERDECK RAINWOOD YELLAWOOD SELECT KDAT YELLAWOOD SUPERSELECT GLULAM PORCH COLUMNS YELLAWOOD ARCHITECTURAL TRIM KDAT TONGUE AND GROOVE PORCH FLOORING PRESSURE TREATED HANDRAILS PRESSURE TREATED SPINDLES PRESSURE TREATED BALUSTERS SQUARE 2 ENDS BEVEL 1 END SCALLOPED 2 ENDS PRESSURE TREATED STEP STRINGERS PRESSURE TREATED STEP TREADS WITH V-CHANNELS AND BULLNOSE EDGE PRESSURE TREATED WOOD LATTICE: SQUARE DIAMOND PRIVACY LATTICE STRIPS POST CAPS: BALL ACORN SMALL BALL FRENCH GOTHIC PINEAPPLE OCTAGON CONTEMPORARY PRESSURE TREATED FENCE PANELS: DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX MINI STOCKADE FENCH GOTHIC ARCH TOP FENCING HALF MOON SCALLOP TOP PRESSURE TREATED FENCE PICKETS PRESSURE TREATED GATES DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX SPACED FRENCH GOTHIC PRESSURE TREATED SPLIT RAIL FENCING 2-HOLE 3-HOLE LINE CORNER END PRESSURE TREATED CORRAL BOARD ROUND STOCK FENCING POLE BARN PILING DIMENSIONAL LUMBER PRESSURE TREATED BOARDS KDAT SQUARE-EDGE RADIUS-MILLED EDGE PRESSURE TREATED TIMBERS ROUGH OR DRESSED SIDING LOG CABIN T1-11 RB&B PATTERN STOCK SPECIALTY POSTS PRESSURE TREATED MAILBOX POSTS STANDARD FRENCH GOTHIC DOUBLE V-GROOVE FANCY OCTAGON SLANT TOP PRESSURE TREATED DECK POSTS PRESSURE TREATED PLYWOOD YELLAWOOD COLOR-FULL COLOR INFUSED FACTORY APPLIED WATER REPELLENT YELLAWOOD OUTDOOR FASTENERS STARBORN HIDFAST FASTENMASTER OUTDOOR LIVING TRUCK FLEET SALES SUPPORT MARKETING TRAINING DIFM DIY REPUTATION ACCESSORIES OSRS #1 PRIME #2 PRIME DSS C&BTR 5/4 STANDARD 5/4 PREMIUM AZEK TIMBERTECH JAMES HARDIE AERATIS TANDO EDGEFAST COPPER CARE TENINO SPACEMAKER DEXERDRY FIBERON PRESSURE TREATED DECKING: KILN DRIED AFTER TREATMENT MASTERDECK RAINWOOD YELLAWOOD SELECT KDAT YELLAWOOD SUPERSELECT GLULAM PORCH COLUMNS YELLAWOOD ARCHITECTURAL TRIM KDAT TONGUE AND GROOVE PORCH FLOORING PRESSURE TREATED HANDRAILS PRESSURE TREATED SPINDLES PRESSURE TREATED BALUSTERS SQUARE 2 ENDS BEVEL 1 END SCALLOPED 2 ENDS PRESSURE TREATED STEP STRINGERS PRESSURE TREATED STEP TREADS WITH V-CHANNELS AND BULLNOSE EDGE PRESSURE TREATED WOOD LATTICE: SQUARE DIAMOND PRIVACY LATTICE STRIPS POST CAPS: BALL ACORN SMALL BALL FRENCH GOTHIC PINEAPPLE OCTAGON CONTEMPORARY PRESSURE TREATED FENCE PANELS: DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX MINI STOCKADE FENCH GOTHIC ARCH TOP FENCING HALF MOON SCALLOP TOP PRESSURE TREATED FENCE PICKETS PRESSURE TREATED GATES DOG EAR STOCKADE BOARD-ON-BOARD SHADOWBOX SPACED FRENCH GOTHIC PRESSURE TREATED SPLIT RAIL FENCING 2-HOLE 3-HOLE LINE CORNER END PRESSURE TREATED CORRAL BOARD ROUND STOCK FENCING POLE BARN PILING DIMENSIONAL LUMBER PRESSURE TREATED

WE HAVE EVERYTHING FOR YOUR ANYTHING. Getting it right has never been easier with the full lineup of high-quality products from Great Southern Wood. And with lots of options, one shipment gets you so much more than YellaWood® brand pressure treated pine. Plus, nobody beats us when it comes to dealer support. Contact your representative to see what the YellaWood® brand can do for your business. Visit YellaWood.com/ForDealers

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

YellaWood® brand products available in all markets, other product availability varies by region.

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.

MARKET INSIGHTS

Smarter Than the Average Appliance Major appliance makers continue to ramp up smart home products. By Andy Carlo You might not request the HAL 9000 to open the oven door or load the dryer, but the lineup of appliance manufacturers offering smart home technology is growing at a steady pace. Appliance makers GE Appliances and Electrolux recently stepped up their offerings of products that collaborate with Google Assistant. GE Appliances, a subsidiary of Haier, announced that it is the first the manufacturer to offer a full suite of connected appliances that work directly with Google Assistant. In the meantime, Electrolux is expanding its collaboration with Google by integrating connected kitchen products in Europe with the Google Assistant. The voice integration will start with Electrolux smart ovens in early 2019. These developments and others advance the state of communication between human and computer closer to what was once science fiction — such as the conversational computer HAL 9000 in the classic “2001, a Space Odyssey.” In GE’s case, previously it was necessary to use GE Appliances’ Geneva Home Action to have a conversation with Google. Now users can skip the Geneva step altogether. For example, instead of saying, “Hey Google, ask Geneva Home to preheat the oven to 425 degrees,” a homeowner can say, “Hey Google, preheat the oven to 425 degrees.” “For GE Appliances, connected leadership starts with consumer tech

The Google Assistant is getting busy in the kitchen, and around the house.

that is purposeful and practical,” said Shawn Stover, vice president of GE Appliances’ SmartHome Solutions team. “Working with Google, we have created a more natural way to communicate with your appliances that allows you to speak your request like you would with any friend or family member who’s helping around the house.” According to GE Appliances, refrigerators, ovens, ventilation hoods, dishwashers, air conditioners, washers and dryers are all in the mix. Brands include Monogram, Café, GE Profile,

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

For GE Appliances, connected leadership starts with consumer tech that is purposeful and practical.” —SHAWN STOVER, VICE PRESIDENT OF GE APPLIANCES’ SMARTHOME SOLUTIONS TEAM

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Charlotte Pipe. The brand customers ask for by name.

We’re the most trusted name in ABS, CPVC CTS, PVC, Pressure and Drainage pipe and fittings. Customers love us and 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

MARKET INSIGHTS

GE appliances and Haier products. “Over the past year, we’ve been working closely with top brands like GE Appliances to make it easier than ever to do your daily chores by controlling your home appliances, from dishwashers to refrigerators, directly with the Google Assistant,” said Michele Turner, director, Smart Home Ecosystem, Google. “Our integration with GE Appliances lets people speak naturally to the Google Assistant to get things done quickly around the home using just their voice to control GE Appliances’ full suites of connected appliances.” GE Appliances said its lineup of connected products also work with Amazon Alexa, Apple HomeKit, Amazon Dash Replenishment, Nest Labs, Drop, IFTTT, and Innit smart products. Smart partnerships with tech providers aren’t new to Electrolux. In 2017, Electrolux in the United States became the first white goods company to partner with Google on the Google Assistant, integrating products under

its Frigidaire and Anova brands. “We are very happy to collaborate with Google to give people a simple, rewarding way of interacting with their connected Electrolux appliances,” says Dan Arler, head of major appliances EMEA at Electrolux. “Voice control supports a clear user need. Whether it’s hands-free cooking or just an easier way to interact with the oven, we think consumers will love it.” This past January, Whirlpool became the first appliance maker to offer products that connect with Apple Watch, including ovens, washers, and dryers. Apple Watch compatibility includes more than 20 Whirlpool brand connected appliances. “Bringing intuitive technology and functionality to the appliance category that helps take the friction out of household chores is chief among our goals as we innovate for the smart home,” said Brett Dibkey, Whirlpool Corporation vice president, brand and strategy in North America. “Our consumers are sophisticated

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

and expect their appliances to work smarter, not harder.” Rounding out recent smart appliance launches is LG Electronics (LG), Google, and Innit who collectively announced a joint smart kitchen solution, enabling hand-free voice control. The Signature Kitchen Suite ovens and ranges offer step-by-step guided cooking instructions and automated expert cook programs. The new offering was unveiled at IFA 2018 in Berlin. “Signature Kitchen Suite helps home chefs achieve amazing results by staying true to food,” said Alice Ryu, head of Smart Solution Business of LG Electronics Home Appliance & Air Solutions Company. “When we respect the food at every level, we can create incredible experiences. Our joint solution with Google and Innit is wholly aligned with this approach.” A demo at the European technology and consumer electronics fair IFA 2018 showed how consumers can answer the everyday question of “What’s for dinner?” with personalized meal suggestions. Home chefs can access helpful how-to videos hands-free, making it easy to cook new foods. Innit works with kitchen appliances, including the Signature Kitchen Suite, to deliver cooking programs that are orchestrated and tailored to each meal. “In the past, consumers may have had to open up six or seven apps to get the help they need cooking, including nutrition information, recipes, shopping lists, how-to videos, and remote control apps for various devices,” said Kevin Brown, CEO and co-founder of Innit. “With LG, Google, and Innit working together, consumers can enjoy a single elegant journey that gives them the confidence and assistance to create incredible meals every day.” Innit said it plans to launch this smart kitchen solution to consumers in Q4 2018.

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MARKET INSIGHTS

Elevated Expansion for Elite Roofing Supply The roofing distributor opens 6 new locations while turning to veterans for management. By Andy Carlo Celebrating its 5-year anniversary, Elite Roofing Supply has been busy branching out in 2018. The independent distributor of roofing materials and supplies recently added 6 new branches in Monroe and Bossier City, La.; Tucson and Mesa, Ariz., Denver, Colo., and its latest in Lynwood, Calif. The latter opened on Sept. 1. “We open branches in markets where we find synergies with the right people who have expressed interest in joining the Elite family. Our goal is clear: to be the preeminent independent distributor west of the Mississippi, and our expansion plans are determined by the strong partners who wish to be part of our independent distribution culture,” said Brian Torry, Elite chairman and CEO. The latest California branch is placed at a key location close to where I-105 meets I-710 and is expected to better serve the southern Los Angeles area. Founded in 2013, Glendale, Ariz.-based Elite Roofing Supply says its mission is to provide roofers with an independent distributor that is knowledgeable in both commercial and residential roofing. At the same time, Elite is committed to being good stewards in the industry and serving the professional roofing contractor community, the company said. “This year marks our 5th year in business and with 12 branches open and more to come, we remain committed to our philosophy of being a locally-owned distributor that provides a customized customer experience and a comprehensive line of quality roofing

materials,” Torry said. Recognizing the Louisiana market was underserved, Elite opened two strategically-placed locations in Bossier City and Monroe. The Bossier City branch serves the surrounding Shreveport area and is operated by Managing Partner Robert McCalman. Hailing from Bossier City, McCalman has been in the construction industry for 25 years; 14 of which have been in roofing distribution. Elite’s Monroe location serves customers within a 100-mile radius. Monroe Managing Partner and Branch Manager Doug Norman, a Louisiana native, has a long history in the industry having worked in building product distribution as an owner and manager for more than 35 years. For Elite, the formula has become expansion while placing a seasoned veteran at the helm of each new branch. Managing partners of each branch make pricing and inventory decisions allowing for faster turnaround and a catered experience for its customers. “Elite offers a unique value proposition to our customers,” said Elite Chief Operating Officer, Sarah Weiss. “Each branch’s managing partner has longlasting relationships in their markets, understands the challenges of the business and is empowered to partner with customers and vendors to create winning scenarios for all involved.” The company says its growth through the opening of the Mesa and Tucson branches is an opportunity to service an important market. The Tucson location is led by Managing Partner Rick D’Alessio,

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

a well-versed pro with over 30 years of experience in the roofing and construction industry. Paul LeFevre is the managing partner of the new Mesa branch and has more than 30 years of industry experience. LaFevre began his career in 1986 as a truck driver and quickly moving into an inside sales position. He ascended the ranks holding different positions such as purchasing manager, manager of procurement and regional manager for a larger distributor, Elite said. In the Los Angeles market, native Californian Rick Sasseen has been in the building products distribution industry for over 30 years. Working in various roles including driver, crane operator, inside sales, operations and management, Sasseen knows the business inside and out, according to Elite. “This year marks our 5th year in business and with 12 branches open and more to come, we remain committed to our philosophy of being a locally-owned distributor that provides a customized customer experience and a comprehensive line of quality roofing materials,” Weiss said. to partner with Google on the Google Assistant, integrating products under its Frigidaire and Anova brands. “We are very happy to collaborate with Google to give people a simple, rewarding way of interacting with their connected Electrolux appliances,” says Dan Arler, head of major appliances EMEA at Electrolux. “Voice control ELITE ROOFING continued on page 77

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MARKET INSIGHTS

Tariffs Are the Talk Associations line up to oppose tariffs. By Andy Carlo For opponents of the Trump Administration’s foreign tariff policy, there wasn’t a lot of good news in September. As numerous industry associations stacked up in staunch disapproval of the administration’s foreign economic policy, things got worse. On Sept. 17 President Trump announced that he was placing a 10% tariff on Chinese imports, which will then rise to 25% by the end of 2018. And the tariffs could escalate even higher from there, Trump warned. In a statement issued by the White House, Trump said, “If China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports.” Industry associations, including the National Association of Home Builders (NAHB) and the National Lumber and Building Material Dealers Association, have lined up against the tariffs. They argue that the tariffs will translate into higher prices for home builders, lumber dealers, and, in the end, consumers, during a period when home prices are already escalating at a rapid pace while leaving potential buyers on the sidelines. In July, the Power Tool Institute, the International Wood Products Association and the American Home Furnishings Alliance were among 66 signatories of an anti-tariff letter to U.S. trade officials. Trump disagrees and appears to not be diverting from his present economic course. “We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But,

so far, China has been unwilling to change its practices.” Following the latest round of tariffs, the NAHB was quick to respond — again opposing the latest move by Trump. “President Trump’s decision to impose 10% tariffs on $200 billion worth of Chinese imports, including $10 billion of goods used by the residential construction sector, could have major ramifications for the housing industry. With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent,” said Randy Noel, chairman of the NAHB and a custom home builder from LaPlace, La. “Further, this tax increase is coming on top of the current 20% tariffs on softwood lumber imports from Canada. The lumber tariffs have already added thousands of dollars to the price of a

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

typical single-family home,” Noel added. The NLBMDA has been at the forefront of trying to move the Trump Administration back to the negotiating table with Canada in hopes of hammering out a new softwood lumber agreement. The association urged dealers to take action and contact their senators to sign a bipartisan letter to Commerce Secretary Wilbur Ross and Ambassador Robert Lighthizer, the U.S. Trade Representative, which encouraged U.S. trade officials to negotiate an agreement. Prior, 171 members of the House of Representatives sent a letter to Ross and Lighthizer asking that the U.S. renew discussions with Canada. NLBMDA led the effort on the letter, and said an end to the dispute would help bring stability and predictability to the pricing and availability of softwood lumber without the imposition of duties.

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than

ENVIRONMENTALLY

MARKET INSIGHTS

Marvin Ellison’s Big Blue Playbook 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 at Mooresville, N.C.-based Lowe’s? There’s a lot. The company reported second quarter revenue in excess of $20 billion — another first. Here are some of the other high lights from the company’s report. For the pro. The company adjusted upward its estimate of the

share of its total sales to pros — now roughly 30%. (Home Depot’s corresponding estimate is 45%.) “Pro is a huge opportunity for us,” said Ellison. The company say continued strength in lumber and building materials in the second quarter, and it hopes to build on that with new introductions for the pro. Among them: Lowe’s announced an introduction of Mapei to all stores, described as the leader in tile setting materials. Also added Zoeller, described as the leading brand in pumps, and a retail exclusive for Lowe’s.

HD LOW

10%

0% 16Q2

16Q3

16Q4

17Q1

17Q2

17Q3

17Q4

18Q1

SOURCE: COMPANY REPORTS

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

Category winners. As the late spring pushed sales into the second quarter, Lowe’s lawn and garden category saw double-digit comps. Seasonal and outdoor living produced comps in the high-single digits. Cooling products and outdoor power equipment — especially OPE powered by a new generation of batteries — also generated double digit comps. Room for improvement. Ellison was direct in his assessment of where Lowe’s can improve. “Specifically, we are significantly behind in our supply chain strategy, our in-store technology is dated, overall execution is impaired by complexity, we have a large number of out-of-stocks in our stores that must be addressed, and we need to increase the rigor with which we evaluate capital investments.”

U.S. Comps, LOW vs. HD Home Depot holds court in Q2

Growth metrics. The company’s U.S. comps in the second quarter were positive 5.3%. That’s the highest in more than two years. Also, average ticket increased 4.5%, while transactions grew 0.6%.

18Q2

Orange vs. Blue. Comparable store sales at Lowe’s continue to trail its rival Home Depot. As the chart below illustrates. Lowe’s concedes Home Depot’s real estate advantage in metro areas, particular in the Northeast and West Coast, but with improved balance in serving DIY and pro customers, Lowe’s can begin to even the score. Ellison looked back at the time he was a executive with Home Depot competing against Lowe’s. “I can

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remember back in early 2000 where it felt like every quarter, we were getting beat pretty significantly by Lowe’s with those same structural disadvantages that we currently have, so I think for us, it’s less about looking at the competition and it’s more about looking within and asking the question, where can we be better?” Share repurchase. Instead of spending half a billion on planned capital projects for 2018, the company will buy back shares. Ellison explained that the spending wasn’t focused on the core business, and did not deliver productivity for associates. Not coincidentally, the company’s stock jumped more than 5% in trading following the earnings call, and continues to outpace most hardware and building supply stocks on an annual and monthly basis. Craftsman momentum. Lowe’s has a home center exclusive on Craftsman products, meaning you can’t get it Home Depot or Menards. (Other channels, including Ace in the convenience hardware channel, carry the product.) “We drove market share gains across all major categories where we introduced Craftsman to our lineup.,” said Mike McDermott, executive VP of merchandising, who is leaving the company. “We’re excited about our continued rollout of Craftsman in the second half,

including individual mechanics and hand tools, power tools, and fall outdoor power equipment. Omni-channel vision. Said Ellison: “While we have the foundational elements of an omni channel network,

we need to better connect and align our systems and processes to create a truly integrated ecosystem. Fortunately, I’ve been down this road before and I have a clear understanding of the steps and processes required to build a worldclass omni channel environment.”

PORCH and DECK RAILING Railing sections completely assembled Easy DIY installation Four styles Black or White

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i n

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U S A

STEEL

Easy DIY installation Eight styles

It’s less about looking at the competition and it’s more about looking within and asking the question, where can we be better?” —LOWE’S CEO MARV ELLISON

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Black baked-on finish Most styles adjust for steps

800-348-0746 • www.gilpininc.com Call to request our Free Catalog HARDWARE + BUILDING SUPPLY DEALER OCTOBER

MARKET INSIGHTS

Two Logos Rise to The Top The first-ever HBSDealer All-Industry Logo Contest generated nearly 100 entries, and many examples of colorful, bold, powerful or memorable symbols of high-performance companies or community engagement. In one sense, all the entries were winners. The simple act of submitting a logo revealed company pride and a norisk opportunity to gain free revenuegenerating publicity. In another and more accurate sense, there were two

MD Building Products

winners: New South Construction Supply, and M-D Building Products. Judging for the logos was the work of HBSDealer’s professional art staff. In the dealer category, the winning logo came from New South Construction Supply, based in Greenville, S.C. “Our customers love the logo and comment on it all the

New South Construction Supply

time,” said Jim Sobek, president. The bear featured in the logo is named “Kandu,” reflecting the company’s slogan: “Know how. Can do.” “Our logo has served us well since January 2007 when we rolled it out over a weekend without our associates knowing about it,” he said via e-mail. “Over the weekend

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Phone: 800.538.5069 Find a dealer near you: www.franmar.com/find-distributor

9/7/2018 5:54:23 PM HBSDealer.com

preceding the rollout, all store signage was changed, new logos were put on all of our locations and trucks. When our associates reported to work on Monday, they were given new shirts, caps, etc. We also had bumper stickers, scratch pads, etc., for our customers. The weekend surprise rollout added a dramatic flair that made the new logo rollout even more noticeable. If we’d done the rollout gradually over time, I don’t think we’d have had the same impact on our customers and associates.” Here’s the official analysis of the judges: “The nicely illustrated imagery of a powerful bear with a hardhat and pencil and bold font is instantly iconic. It communicates we’re ready and more than capable of handling any project you entrust to us.” In the supplier/manufacturer

category, the judges applauded the bold simplicity of the M-D Building Products logo, its home improvement symbolism, and its ability to pop off the page. M-D Executive VP Kipp Collins offered this description of his company’s award-winning logo: “There is not much detailed history around the origin of the logo, that was created in 1920,” he said. “However, over the years, the logo has only changed slightly. We have contemplated more robust modifications, and we always come back to the same place. We like the stability, structure and simplicity that the logo represents to us. It aligns with our approach to business and commitment to domestic manufacturing.” The Oklahoma City-based

company’s initials originated with L.A. Macklanburg and H.M. Duncan, early pioneers of home weatherization and founders of Macklanburg-Duncan in 1920. The judges offered this official analysis: “At times in design less is more. The bold straight-forward graphic building structure with the bold black letters against the yellow background makes the logo pop, and speaks complete confidence.” For more from the first ever HBSDealer All-Industry Logo Contest, follow HBSDealer on Facebook. “Congratulations to the winners,” said HBSDealer Editor in Chief Ken Clark. “Our staff enjoyed collecting the entries, judging was fair and square, and we look forward to an even bigger second-annual logo contest next year.”

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DURABILITY MAX manufactures tools with features that allow them to stand up to the harsh environments in which they are used. One such feature is the patented maintenance free end cap filter (U.S. Patent 5637125) that captures dirt and sand down to 11 microns. The filter has a self-cleaning feature that automatically ejects foreign substances from the tool when the air hose is disconnected. Internal parts last longer and the inside of the tool is kept clean. INNOVATION- MAX employs over 200 R&D engineers who work around the clock to innovate tools that feature unique innovations to more efficiently get jobs done.

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WWW.MAXUSACORP.COM 800.223.4293 HBSDealer.com

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MARKET INSIGHTS HURRICANES continued from page 50

adapt to adverse events.” This is the concept that communities should be able to not just survive storms, but recover quickly, so that the community can go back to normal quicker. Michael Rimoldi, senior vice president of education and technical programs at the Federal Alliance for Safe Homes (FLASH), advises FEMA on building hurricane-resistant homes. As he explained, “in the traditional woodframe home, it’s how it’s all put together. All of the components, from the top of the roof down to the foundation, are tied together by mechanical connectors. You can build a wood-frame home that’s just as strong as anything else as long as you ensure that all the walls are tied together properly, are tied to the roof properly, and the roof and walls are tied

to the foundation properly.” A more recent innovation in tie-down products is a new truss screw featuring fully-threaded shanks for fastening trusses and rafters to top plates as an alternative to hurricane clips. The screw is used for stud-to-bottom plate connections as well. Simpson’s StrongDrive SDWC Truss screw, for example, can handle up to 600 pounds of uplift. “Contractors love them,” Shackelford said, noting that all the connections can be done from inside of the structure. Other heavy-duty connector screws, such as the Simpson StrongTie Strong-Drive SDS, is a ¼-inch -diameter high-strength structural screw ideal for various connector installations as well as wood-to-wood and engineered wood applications. It installs with no predrilling and has been extensively tested in various

Hurricane ties like this one are used to help make wooden structures more resistant to high winds, resisting uplift, racking, overturning, and sliding.

applications, including hurricanes. “Every year we learn more,” Shackelford added. “We see the wind loads go up as the houses [near the coast] get bigger, therefore we come up with a new product with greater uplift. We are constantly testing new products. We like to think of ourselves as an innovative company that helps make structures safer and stronger.”

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ELITE ROOFING continued from page 68

supports a clear user need. Whether it’s hands-free cooking or just an easier way to interact with the oven, we think consumers will love it.” This past January, Whirlpool became the first appliance maker to offer products that connect with Apple Watch, including ovens, washers, and dryers. Apple Watch compatibility includes more than 20 Whirlpool brand connected appliances. “Bringing intuitive technology and functionality to the appliance category that helps take the friction out of household chores is chief among our goals as we innovate for the smart home,” said Brett Dibkey, Whirlpool Corporation vice president, brand and strategy in North America. “Our consumers are sophisticated and expect their appliances to work smarter, not harder.” Rounding out recent smart appliance launches is LG Electronics (LG), Google, and Innit who collectively announced a joint smart kitchen solution, enabling hand-free voice control. The Signature Kitchen Suite ovens and ranges offer step-by-step guided cooking instructions and automated expert cook programs. The new offering was unveiled at IFA 2018 in Berlin. “Signature Kitchen Suite helps home chefs achieve amazing results by staying true to food,” said Alice Ryu, head of Smart Solution Business of LG Electronics Home Appliance & Air Solutions Company. “When we respect the food at every level, we can create incredible experiences. Our joint solution with Google and Innit is wholly aligned with this approach.” A demo at the European technology and consumer electronics fair IFA 2018 showed how consumers can answer the everyday question of “What’s for dinner?” with personalized meal suggestions. Home chefs can access helpful how-to videos hands-free, making it easy to cook new foods. Innit works with kitchen appliances, including the Signature Kitchen Suite, to deliver cooking programs that are orchestrated

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and tailored to each meal. “In the past, consumers may have had to open up six or seven apps to get the help they need cooking, including nutrition information, recipes, shopping lists, how-to videos, and remote control apps for various devices,” said Kevin Brown, CEO and co-founder of Innit.

“With LG, Google, and Innit working together, consumers can enjoy a single elegant journey that gives them the confidence and assistance to create incredible meals every day.” Innit said it plans to launch this smart kitchen solution to consumers in Q4 2018.

For over a century, we have insured the lumber and building material industries. A long time has passed since we first started insuring the unique risks of wood-based businesses in 1895, but our core values remain the same – we are committed to bringing our policyholders the most comprehensive and current coverages along with sophisticated risk management practices to keep their businesses safe and prosperous. Put our time in the wood industry on your side. Contact us or your broker for a competitive quote. It’s about time you moved your insurance to PLM.

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HARDWARE + BUILDING SUPPLY DEALER OCTOBER 2018

2/6/2018 10:49:56 AM

PEOPLE IN THE NEWS Liberty Woods International LLC, a leading importer and marketer of hardwood plywood, has promoted Geoff Doudera from Vice President of Sales to President. In his new role, Doudera is responsible for all sales and operations for the privately held company. He has been with Liberty Woods for 27 years in various sales and operations roles. Doudera said: “We will continue to grow by investing in our customer relationships and product development, and by expanding our supplier base.” Liberty Woods International LLC is a wholly owned subsidiary of AC Summit LLC, a private investment company for some members of the Coors family, of Coors beer fame.

Derby Building Products Inc., the Quebec City-based building products manufacturer has named Toby Bostwick as the company’s new senior vice president of business development. As Senior Vice President of Business Development, Bostwick will oversee customer service, research and development, claims and warranty, as well as product management, focusing the product development team more closely with the customer experience.

McCoy’s Building Supply has named Justin Askew as store manager of its Taylor, Texas location. Askew joined McCoy’s 5 years ago working as a cashier at the company’s Huntsville, Texas store and quickly enrolled in the company’s management development program. Mostly recently, Askew served as store manager at McCoy’s Corsicana, Texas. Based in San Marcos, Texas, McCoy’s operates nearly 90 locations.

James Hardie Industries reported that Dr. Jack Truong will succeed CEO Louis Gries as CEO of the building products manufacturer. Truong is currently the company’s president of international business and has held the position since April 2017. He will continue to be based out of North America and will be formally appointed CEO toward the end of the company’s 2019 fiscal year next spring. The company said its board of directors determined that a structured transition, taking place over the next six months or so, was in the best interest of shareholders. During this period, Gries will remain CEO and Truong will become company president and chief operating officer, while running James Hardie’s global business. Truong’s current responsibility includes the Asia Pacific Fiber Cement and Europe Building Products businesses.

PPG said Malesia Dunn has been appointed as executive director, PPG Foundation and corporate global social responsibility. She succeeds Sue Sloan. Dunn will lead the strategy and management of PPG’s global community engagement activities, She will also lead PPG’s Colorful Communities program, the company’s signature initiative for supporting communities, which aims to protect and beautify the neighborhoods where the company operates around the world.

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Dallas-based PrimeSource Building Products announced a leadership shakeup affecting information technology operations and product development. In the last month, the building material distributor made the following additions to its executive team: Chris Peetz, executive VP of operations, Todd Huston, executive VP of product development and Tim Michel, CIO, all veterans of leading distribution and branded-product companies, the company said “We are realigning our sales and operations functions and making multiple significant investments in both people and technology to provide a seamless service experience for our customers,” said Tom Koos, PrimeSource Building Products CEO.Another addition is Scott Smith, who was promoted to chief commercial officer over all enterprise sales and account management activity.

Donald E. Frieson is the new executive VP, supply chain for Mooresville, N.C.-based Lowe’s. He will be responsible for the company’s distribution centers, logistics, global sourcing, transportation and delivery services. Frieson brings to his post more than 30 years of operations and supply chain experience, including 19 years at Walmart. He most recently served as chief operating officer at Sam’s Club, a division of Walmart, where he was responsible for all club operations, including supply chain for more than 650 locations in the U.S. and Puerto Rico. Frieson joined Sam’s Club in November 2012 as senior vice president, replenishment and inventory planning. From 2010 to 2012, he served Walmart International as chief integration officer for Massmart Holdings, a chain of more than 300 stores operating in 13 sub-Saharan African nations, where he was responsible for supply chain, merchandise sourcing and private brand integration. Prior to Massmart, Frieson was senior VP, supply chain at Walmart where he led more than 30 distribution centers that supplied merchandise to nearly 1,600 Walmart stores, supercenters and neighborhood markets in the eastern U.S.

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HARDWARE + BUILDING SUPPLY DEALER OCTOBER 2018

Stucco Stucco Masking Masking Tape Tape

Monthly Retail Sales, not adjusted

Residential Construction/Sales 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) August: 1,282,000 1350

2.83

2.45 38.5

38 1250

(sales in $ billions)

40.8

40 1300

NAICS 44413

(sales in $ billions)

2.41

2.6 2.44 2.22

37 36

1200

36.6

36.2

1 34.5

1150

33 1100

32.5

MAY

SOURCE: COMMERCE DEPARTMENT

2017

JUNE

JULY

MAY 2017

2018

JUNE

JULY

2018

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

Single-family starts (in thousands, SAAR) August: 867,000 100

HBSDealer Stock Roundup the percent-change performance of stocks based on Sept. 18 prices

950

60 900

50 850

40 A

ANNUAL CHANGE

800

SOURCE: COMMERCE DEPARTMENT

Existing-home sales (in millions, SAAR) July: 5.34 million 5.9

SHW HD

30 20 DJI

5.8

5.7

-10

BLDR

SWK

BMCH BECN

5.6

-20 -10

5.5

-5

5.4 5.3

LOW

TSCO

MONTHY CHANGE 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

3.8% 3.5

August

6.5 60

133.4

$2.84

August

Sept. 18

140

OCTOBER 2018 HARDWARE + BUILDING SUPPLY DEALER

$1.50

$3.00

SOURCES: LABOR DEPARTMENT, THE CONFERENCE BOARD, AAA

HBSDealer.com

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