REFTECTING A MARKET IN TRANSITION Los Angeles Retailers Close Up Shop as Building Lags

A RASH OF retail yard closings hit the la' 1* Aneeles area last month as lumber and building materials dealers continued to suffer from a prolonged lag in new construction in the area.

At press tirne, a number of yards were closing and several others were reportedly planning extensive cut-backs in their operations with an eye to eventual liquidation'

One Los Angeles dealer estimated that the number of yards might reach 19.

The dealers seriously affected by the slowdown in construction are, of coursg volume yards specializing in lumber sales to tract builders, historically a "feast or famine" proposition.

Broad-line consumer yards with emphasis on the do-it-yourself and custom builder trade report more stable earnings.

It is significant that none of the yards which the yard was located. ooour property ruptcy; all are voluntary closings due to an unsatisfactory profit picture.

The decision to close was in many cases brought on by the value of the property on which the yard was located. "Our property is just too expensive to support a retail lumber yard," was the consensus of many of the dealers who plan liquidation.

A tightening of the money market through lending institutions and the resultant sky-rocketing of the interest rate has been a further inhibiting factor. The average interest rate reportedly stands at 7t/2 to 8 percent and "builders are damn luckv to get it at that rate," commented a dealer.

The following is a survey of several of the dealers who plan cut-backs in their operation or liquidation:

rAco TUMBER co. City of Industry, Colif.

Reports a major cut-back in their operation, according to Manager W. D. "Matt" Matheson, who says the yard plans to'oget completely away from the tract business."

Laco will not renew the lease on a 2l/zacre portion of their yard which now houses their fencing operation, ,which they plan to change to conform to Interstate Commerce Commission restrictions.

The firm will also attempt to sell its truss plant, one of southern Cali{ornia's largest with a capacity of 500 units per day, as an operating unit.

Laco will, however, retain its do-it-yourself operation, on which they anticipate sales of $60,000 to $75,000 per month to consumers. The yard is owned by S. C. Hunsaker & Sons. Inc.. a Los Anseles construction firm.

o'The business in southern California is entering a new phase. Those that can adjust to the new business conditions resulting from the decline in home building by applying manage' ment techniques successfully used in other industries will be leading the retail lumber business within the next year as demand for housing starts to move upward again." Wayne Gardner, executive vice-preei. dent of the Lumber Aeeociation of Southern California.

HAMMOND TUMBER CO. Arcodio, Colif.

Will close out their yard within the next few weeks because "the large volume oI tract business is gone and the property is too valuable to continue as a retail yard," according to Hal Hamilton. manager.

The Arcadia yard, in operation for more than 45 years, was bought out by Hammond in l94I from the now-defunct Kerchoff-Cuzner Lumber Co. The yard has posted average gross sales of $2/2 million per year. ln 1964, the yard operated 24 hours per day, averaging sales of five million b.f. per month.

During the last year, however, their sales have dropped off by more than 50 percent.

Manager Hamilton, 30, will team-up with another young Los Angeles area lumberman to open a new yard in Temple City, Calif., to be called United Lumber Co., at 9250 Lower Azusa Road. Hamilton's partner is 3S-year-old Pete lves, who leaves Marmion Lumber in Azusa after eieht years.

CARLSON'S CHINO IUMBER CO. Chino, Colif.

Will close down their operation as soon as equipment and inventory can be liquidated, according to owner Al Carlson.

o'The lumber business is currently unprofitable. We realize it and we plan to pay our bills and get out," said the dealer.

Chino, a volume yard catering to tract builders, suflered a loss of sales complicated by poor collections, Carlson reported, adding that he had been ooclobbered by credit collections."

The vard" situated on a five-acre lot" had for*"rly averaged annual gross sales of over $2 million.

"CL0BBERED by credit problems" for Chino Lumber's closing by JOHNSON

TUMBER CO. Altodeno, Colif.

Closed two months ago, reportedly another victim of soaring property values and slackening business volume. A small do-ityourself type yard, the firm was in operation for more than l0 years at their Lincoln Avenue location.

WILMINGTON LUMBER CO. Norwolk, Colif.

Has sold their property and will close out their operation by June 15.

76" $l/2-acre yard had catered to contractor and industrial accounts with average gross sales of approximately $100,000 per month. The do-it-yourself phase of the business, called Home Builders Mart, will also be closed.

The yard was founded 20 years ago on property rented {rom Consolidated Lumber in Wilmington, Calif. In 1948, they moved to a site on Slauson Ave., and in 196l to their present location in Norwalk.

The yard is owned by interests headed up by Oregon lumberman Coleman Whecler, president of Santiam Lumber, and Carl Davis, also an Oregon millman.

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