Builders Emporium gives upr quits

Builders Emporium is closing its 15 Nevada, Arizona, New Mexico and Texas stores and 82 California retail ouflets with a going-out-of-business sale expected to continue into October.

The chain reportedly has been in the red for over two years. A net loss of $17.1 million on sales of $562.4 million was posted for fiscal second quarter ending July 15, 1992. Collins & Ailqnan Group, BE owner, has said it will take a charge against earnings in its fiscal second quarter, which ended July 31, in connection with the sale or disposition of Builders Emporium's inventory and other assets. Individual stores or groups of stores may be sold, but no definite details were released by David J. McKittrick, vice chairman and chief operating officer of Collins & Aikman.

Michael Hecht, currently in charge at corporate headquafiers in lrvine, Ca., is the third president in the last three years. Hired last yea.r to tum the company around, the former depart- ment store executive said that he had proposed cutting back the chain significantly and reinvesting about $40 million in updated stores similar to the company's Fountain Valley, Ca., prototype.

"Builders Emporium didn't have a niche," he said. "When warehouse competition came into play, there wasn't any way we could respond quickly with the mix (of stores) and merchandise we had."

Home Depot, which has 6l California stores, is expected to gain big benefits from BE's demise. Although the state generates an estimated $2 billion a year in sales, more than a quarter of the company's total, Califomia has been its weakest market.

The closure ends the 15 year history of a company which began as Vornado Homecenters, a 59 unit chain with 47 Southern California stores. Acquired by Wickes Corp. in 1978, the home center business had grown to 60 stores by 1982 when the conglomerate entered bankruptcy, at that time the largest filing in U.S. history. After Wickes returned to profitability in 1985 under the leadership of chairrnan Sanford Sigoloff, BE expanded into Nevada and acquired 38 Ole's stores from W. R. Grace. Sigoloff, now a consultant, attracted attention in Southern California as a spokesman in television commercials for Builders Emporium.

In 1988, Blackstone Group and Wasserstein, Perella & Co., a partnership, acquired Builders Emporium as part of its $539 million acquisition of Wickes. Many Wickes retailing and manufacturing operations were sold off with the parent company renamed Collins & Aikman. That company is now a unit of Collins & Aikman Holdings Corp., Charlotte, N.C., with Blackstone and Wasserstein, Perella the parent company.

The chain prospered throughout the 1980s, characterized by the personal service of a small store with the lower prices of a large chain. Hit by the housing market failure and faltering economy in Califomia plus com- petition from the proliferation of Home Depot and Home Base stores in its market. BE fell into a downward spiral. Customer counts dropped despite substantial investments in updating selected stores, entering new smaller markets and closing weak units.

Most of the 4,332 people being laid off will get no severance pay, Hecht said, although the company will provide help in finding other employment. Approximately 180 employees at corporate headquarters will receive sevefance packages including cash payments and other benefits.

Western Lumber Closes

The 9l-year-old chain Western Lumber, National City (San Diego), Ca., has closed the last of its retail locations.

Parent company Georgetown Industries, Inc., Chadotte, N.C., began paring down the chain from 12 units in 1989. The last location closed in July in Oceanside. Ca.

"Georgetown has been gradually closing the retail stores because it no longer wishes to be in the lumber business," said Gary Bowen of Western Lumber's wholesale division, San Diego Wholesale Building Materials, National City, Ca. "While there wasn't much interest in Western Lumber, there are several paflies interested in the wholesale business." o Hemn"F[r o SPF o W@st@rm Woods o D@rurg[as Ff,r - ["areh aIs@ o F0mgerJo[mt B[amks

San Diego Wholesale remains open, anticipating a possible sale and name change, he said.

Incorporated in 1902, Western Lumber grew to eight locations bY 1962, when it renamed its stores "Westy's." Boise Cascade bought the company in 1969 and opened the wholesale division a year later. The company was sold to a re-incorporated Western Lumber Co.. Inc. in 1985.

In 1987, they acquired four stores from Lumber One and renamed the stores Western Lumber Building Material Centers. Georgetown took over in 1987 and announced a major restructuring in 1989. They wanted to sell the real estate and remain in or move into leased facilities. None of the properties were sold to lumber businesses.

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Weyerhaeuser's Gift To Russia

Eyeing Russia's vast softwood timberlands, Weyerhaeuser has taken the first step in what it hopes will be a long, fruitful relationship with the country.

Weyerhaeuser began its formal courtship with a sizable bouquet: 800,000 year-old pine, spruce and larch seedlings.

The company hopes the project will lead to additional forest management opportunities including nursery technology, environmentally sensitive harvesting, milling, manufacturin g, exporting and marketing.

Half the world's supply of softwood timber is now growing in Russia, but the country knows nothing of reforestation and modern technology.

"There has been logging in the Russian Far East by local operators for several decades without regeneration," said Weyerhaeuser timberlands v.p. Scott Marshall. "In addition, the area has been losing millions of acres of trees annually due to forest fres and disease. There is a crying need for modern forest management practices."

Many U.S. companies are interested in joint ventures in Russia, but have been restrained by the Russians' shifting political structure, antiquated legal system and neglected infrastructure.

For more than 20 years Weyerhaeuser executives have been visiting Russia. About five years ago, when the Soviet system began to break apafi, the company started to seriously pursue a business parcnership.

Weyerhaeuser made smaller research plantings in 1991 and 1992. More than 95Vo of the 120,000 seedlings survived the prolonged cold winters, convincing the company that a larger planting was warranted.

The seeds were collected in the Russian Far East and grown at Weyerhaeuser's Forest Regeneration Center, Rochester, Wa. In December they were placed in freezer storage at 28" to 30" and in May shipped in refrigerated containers from the Port of Tacoma to Russia's Port of Vanino.

The seedlings remained in the containers until the soil thawed in early

June to open the Russian Far East's brief but productive growing season"

Overseen by Weyerhaeuser international reforestation manager Robert Lowery, the 8-inch seedlings were planted over six weeks to reforest 1,200 acres recently harvested by local organization Koppensky Kombinant. The growth cycle for trees in the region is 80 to 100 years. But in Russia, Weyerhaeuser knows well of patience.

What Gustomers Want Most

Customers want retailers to expedite the checkout process, maintaining an adequate number of open checkout stations, quick and efficient cashiers and short lines.

These "wants" head a list based on a study by Willard Bishop Consulting, Ltd. The nearly 1,200 shoppers questioned also categorized as critically irryortanu clean, neat stores with safe and secure parking lots; large, readable price signs offering product information; employee knowledge and friendliness; products merchandised so they are easy to examine, handle and load into carts, and an agreeable return policy.

The research yielded several recommendations for improving service, including providing an adequate stock of advertised items, improving the handling of customer telephone inquiries and using more information technology. This includes in-aisle scanners !o assist customers in verifying a price; electronic item locators either standing alone or attached to shopping carts, and stock status databases that customers can query via personal computer in advance of a store visit or telephone call.

Store managers interviewed in the shrdy suggested ways suppliers could help retailers offer better customer service. These included toll-free customer service numbers; improved assembly and op,erating insfucdons and package labels; more product information and fraining for store employees, and helping retailers assemble products for floor displays.

Expense Control Profitable

Managing expenses effectively is the key to high return on assets, a National Building Material Distributors Association profit survey revealed.

While the average firm realized a return on assets of SVo,higher than last year's 4Vo but well below today's cost of capital, high profit finns realized a l6.2qo retrm on assets. Gross margins were roughly the same for both.

The profit difference, according to the survey, is in operating expenses with higher profit firms having much lower expenses. Employee costs were lower because of high motivation to be productive. More inventory turns a year and fast collection of accounts receivable resulted in effective cash management utilization.