Second time around

By Carla Waldemar

fD ENEE Knapp, who'd run excaval\tion and construction businesses, always liked dealing with Welches Mountain Building Supply, so when the owner decided to call it a day, she bought it. Twice.

Sounds like a story for the industry version of the Guinness Book of Records, but we'll scoop 'em here. The site in tiny Welches, Or., had been a building supply business since the '50s. When Renee purchased it in 1988, it had stood vacant for two years. She'd made a bid earlier, but the owner, who had a second location, wanted to sell them as a package, which she couldn't afford. "Now. after he'd run both operations into the ground, he accepted my offer for the Welches store.

"I had a Master's degree in Business Administration, and as a builder. I'd been a longtime customer," she supplies in the way of qualifications. "I wanted to try something new-a people-type businessso I decided to take a chance." She took on the limping, $300,000 operation and by the time she sold it in 1991 in order to retire, she'd grown it to a respectable $1.3 million.

"One heck of a lot of my success I owe to my distributor, Horizon," she says, quick to share the credit. "When I started out, I knew products and I knew customer service, but not things like GP, inventory control, margins. Retail was a whole new ballgame. "They hand-held me. After I hooked up with them is when we really started growing. They taught me things like, 'Find out your average sales needed to make your fixed expenses' and 'Okay-you can only put so much into inventory.' This is how you figure out where your money should be, and I was willing to learn. And after I became successful, I'd still ask them, 'What can I do to get better?'

"The other part was, listening to my staff. (Most owners don't listen, they just talk.) They have great ideas. They'll come up with things I could never think of. And I'm always willing to try something new; it may not always work, but you never know unless you try it."

On her second anniversary, Renee tore down the old store and built a new one that tripled its size. Two more years, and she bought a POS computer system. Then in 1999, thinking it was time to retire, she sold the operation.

"But the new owner had a very different business philosophy, and it didn't go over too well. For five years, everywhere I went I was besieged with, 'Can't you come back?' So I had basically two choices," she laughs: "One, move out of town, or two, re-open." The rest, as they say, is history. She's back to $l million in sales since she returned in 2002, but it's been an uphill battle. "He liquidated everything. I started over with bare walls."

Well, not so bare, exactly. They bore five years of dirt and grime. "He did not believe in cleaning. It took a big crew three weeks, pressure-washing fixtures, everything. The first thing I did was buy another computer. (He'd thrown it out.) Also, trucks, a forklift, fixtures. And I spent a huge amount on inventory.

"For staffing, I basically kept the people I'd formerly hired who'd hung on, and I followed their recommendations on everybody else. I brought back the gal who'd been my first manager.

"I'm still fighting that bad image, but this year sales will come close to what I'd had before. I do know how," Renee underscores the obvious.

Rebuilding a Customer Base

Former customers returned, and newcomers to town who'd shopped elsewhere have started venturing in. One experience ("Oh my heavens!") is all it takes because of the superior customer service Renee instills in her staff. "Every customer is acknowledged 30 seconds after they walk in the door, and usually by name. Then it's 'How can we help?' And we walk them to the items, not just point. We ask what they're working on to make sure they get everything they need. And we often suggest something cheaper, or easier."

Her trade is mostly do-it-yourselfers, along with contractors specializing in additions or renovations rather than new homes. And that's a conscious decision. "Lumber is kept to 3O7o of our business because that's not where the margins are. We don't promote whole-house packages because they're low-profit, high labor. Instead, what I get is the pick-up stuff: decks, small jobs, remodeling, additions."

Because of the town's location. along the Mt. Hood corridor an hour east of Portland, it's sought as a recreation and ski area, generating lots of second homes. Some are simply cabins built in the '30s and '40s that cry out for major renovation, while others are built from scratch bv wealthv specialize the way they're advising these days," Renee explains. "That means keeping a wide variety of inventory-especially plumbing and electrical-so people can complete their projects without driving 40 miles. These items aren't big movers, but they're crucial. Another service."

Welches offers free delivery and all the little extras: pipe cutting, lock rekeying, paint matching, glass cutting, rental equipment. It's also just plain fun to hang out there around the coffee table, featuring a good local Oregon roast and homemade pastries. Dog biscuits, too.

Renee has started hosting occasional classes in home repair and plans to revive her formerly-successful annual Appreciation Days. She's also initiated a Ladies Night. "Women love it, and love the store because it's extraclean. Many of my staff are women, so women are comfortable coming in and don't feel foolish asking questions." And if a guy insists on waiting for one of the men on the floor, those fellas often tell them, "You should really talk to her. She's the expert."

Well, she-one of the ladies-is the expert du jour, perhaps. "I do assign departments to each employee," Renee explains, "but I rotate them three times a year in order to move them completely around the store. Every staffer can match paint and cut pipes, and they're all forklift-certified."

Not Your Average Meetings

Monthly staff meetings make sure they're up to speed not only on new products-that's a given-but also ways to build add-on sales. "Each meeting includes a training session with a written quiz given by the employees-for instance, on electrical: how to install a three-way switch. There's a prize for the first perfect score.

"There's also a quiz on add-ons. Customers appreciate the suggestions, and the add-ons are good profit items. We use the NRHA how-to brochures to make sure we're selling everything we can related to a project. At the meetings, we do role-playing to become adept at suggesting additional items, and in how to handle an unhappy customer. If somebody's a pain, we get together and say, 'We're changing him; we'll win him over.' And I'm very open with the finances; they're also part of every meetingsales, daily averages, GP."

Renee also swears by closely monitoring margins. "They're shopped and changed regularly," she relates. "I monitor them every day, and I do mean every day. I look at a print-out of every single item sold. On high-profile items, customers know prices, so we promote them with big display cards reading "everyday low price." Those are low-margin products, but we remain universally competitive. On others, like convenience items, or the one thing you need to finish a project, we can up the margins a little and customers don't know and don't care. Right now, margins average 38 percent," she says, "and I'd like to get them even higher."

Growing a customer base in a tiny town admittedly is tough. "There are limited opportunities to advertise," Renee concedes. "We do utilize sales flyers; I use every one available. And word of mouth-we try for that. That's why we want happy customers. Contractors help us in that respect, and we help them, in turn. We display a board of business cards and offer recommendations."

LUMBER may get top billing, but preferential treatment is given to more retail-oriented, higher margin items.

Grill Renee on her five-year plan, and it's the same old story: "To retire. But the last time I did, when I sold the business, I found I missed it terribly, so it's nice to be able to come back and see what I built keep on growing."

- A tbrmer award-winning LBM trade magazine editor, Carla Waldemar writes frequently on the building material industry. Contact her at cwaldemar@ mn.rr.com.

Rnmns

Arch Lumber,Tracy, Ca., is a new retail lumberyard being opened by framing company B&D Inc.; Bob Heisler, owner; Randy Henderson, lumber buyer ...

Brinker Bros. Lumber & Hardware, Milton-Freewater, Wa., is closing after nearly 70 years

Bourget Bros. Building Materia/s, Santa Monica, Ca., has expanded its lumber inventory to help fill the void left by the midFebruary closure of 82-year-old Fisher Lumber, Santa Monica; Bourget has also hired several long-time Fisher employees

True Value Hardware, Hesperia, Ca., was opened Jan. 3; mgr. Jeff Carlson, owner Ken Anderson, who also operates units in Phelan and Apple Valley, Ca.

Santa Cruz Hardware, Santa Crtz, Ca., closed at the end of February after 122 years; owner Rodney Hoffer continues operating nearby Westside Hardware and Aptos Hardware ...

Ace Home & Garden Center, Libby, Mt., owners Ted and Audrey Werner opened 20,000-sq. ft. Ace Hardware of Idaho last month in Boise, Id., and are unveiling a 22,000-sq. ft. sister store later this month in Meridian, Id.

84 Lumber Co. received a zoning change to proceed with plans for a 24-acre yard in the north Magic Ranch area of Pinal County, Az. ...

Habitat for Humanity's ReStore outlet in Mission Valley (San Diego), Ca., held a grand reopening. to celebrate its one-year annlversary...

Grainger has relocated its Ontario, Ca., location to a larger, 25,000-sq. ft. facility in Rancho Cucamonga, Ca. (Josh Johnson, branch mgr.); opened a Grainger Express outlet Feb. 21 in Santa Monica" Ca. (Damon Edwards, mgr.), and added a new full-service facility Feb. 7 in Sorrento Valley (San Diego), Ca. (Michael Champlin, mgr.)

Penguin Plumbing & Electric Supply Co. will close its l3-yearold Walla Walla, Wa., store when its lease expires later this year; branches of stores will remain in Kennewick, Pullman and Yakima, Wa.

Lowe's Cos. received planning commission approval to build a l.4-million sq. ft. regional DC in Lebanon, Or; is awaiting the goahead to build a new store on a 35acre site in Yucaipa, Ca.; got the okay to build in Apple Valley, Ca.; will take over a former Wal-Mart site in Selma, Ca., and expects to open new stores in the 4th quarter of 2005 in Happy Valley and Ocotillo, 42....

Lowe's will repurchase up to $l billion of its stock

Home Depot opened new stores Jan.27 in N. Fort Collins. Co.: Selma, Ca.; Layton, Ut., and E. Vancouver, W. Seattle and Sequim, Wa.; Jan. 20 in Ponderay, Id. (Michele Valencia, mgr.); Jan. 13 in Gallup, N.M.; Ontario, Or. (Steve Aronson, mgr.), and Red Bluff and Oroville. Ca. (Aaron McGinley, mgr.), and Jan. 6 in E. Kennewick, Wa.

Home Depot has begun construction in Riverbank, Ca., for a January 2006 opening; has applied to begin construction this summer in Barstow. Ca.: will build a I39,527-sq. ft. store in Tulare, Ca.; submitted plans to build in Los Bafros and Apple Valley, Ca.; purchased a 114,461-sq. ft. retail center in San Jose, Ca., from Mervyn's, and will demolish a formet Kmart store in Pleasanton, Ca., to rebuild for an early 2006 opening...

Wrorrsn :rs/tlrurlcrun:rs

Weyerhaeuser Co. sold its 165,669-sq. ft. sawmill on 46 acres in Saginaw, Or., to Whitsell Manufacturing Inc., Springfield, Or., for $1.25 million; Whitsell will receive $50,000 from the Oregon Economic & Community Development Department to help renovate and reopen the former Willamette Industries facility

H.E. Simpson Lumber Inc., Kalispell, Mt., added an office in Ogden Ut., headed by mgr. Kevin Pratt and Casey Pratt, both exSeneca Wholesale ..,

TreeSource plans to expand and modernize its sawmill in Tumwater, Wa., by early next year, doubling capacity....

West Wind Forest Products. Eugene, Or., has purchased Pacffic Rim Manufacturing, Jasper, Or.; Ken Bronson is the new mgr.

Boise Cascade, LLC, Boise, Id., completed the sale of 2.2 million acres of timberland located in Washington, Oregon, Idaho, Minnesota, Alabama and Louisiana, to Forest Capital Partners, ZlC, Boston, Ma., for $1.65 billion in cash; as part of the agreement Forest Capital agreed to continue supplying fiber to Boise mills...

Activant Solutions 1nc., Austin, Tx., agreed to acquire Speedware Corp., Montreal, P.Q., including its operating divisions Enterprise Computer Systems Inc., Gteenville, S.C.; Prelude Systems Inc., Plano, Tx; OpenERP Solutions, Salt Lake City, Ut., and Speedware Ltd. ...

Anniversaries: Goodman Building Supply, Mill Valley, Ca., 50th...

Housing starts in January (Iatefi rtgures) rose nearly 5Vo to a seasonally adjusted annual rate of (Please turn to page 44)