Hardware & Building Supply Dealer - Nov/Dec 2018

Vol. 44 No. 10

NOVEMBER/DECEMBER 2018

Join us February 21-23 for our Spring Dealer Market in Orlando! Register online or give us a call today!

Find Out What An Orgill Dealer Market Is All About The industry event that has everything you need to increase your profitability.

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HBSDEALER HARDWARE + BUILDING SUPPLY

14 MARKET INSIGHTS 14 Voices from the ProDealer

Joel Fleischman, Drexel Building Supply

Industry Summit

26 Advice from the 3rd

Annual eRetailer Summit

18

COVER STORY INNOVATION IN THE HOUSE From Home Depot’s underground lab to LMC’s trip to Boston

FROM THE EDITOR 8 The year 2018 gave us more than 2 million hits, and a handful of “blockbusters.”

NEWS & ANALYSIS 10 Stanley and Depot

24 A Spirit of Life Honoree shares his thoughts on philanthropy

30 Mixed messages on

the latest Quikrete Industry Dashboard

13

HOMEWOOD HOLDINGS REPORT Backed by BIP, a regional LBM force rises in the West.

announce a channel exclusive

10 American Construction Source hits the ground running 12 NewsMap: Lowe’s will close these 20 stores

10

Stanley made a deal with Depot

12 New leadership at

Hardware Distribution Warehouses

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 Chicago,IL, 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. 10, November/December 2018. Copyright © 2018 by EnsembleIQ. All rights reserved.

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NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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22

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Chad Koep Lakeview, Minn.

HBSDealer Daily: Features Every Day 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

Adam Barde Vassar, Mich.n

HBSDealer.co

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NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

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FROM THE EDITOR

The Year in Blockbusters It’s been a busy year.

Since New Year’s Day, HBSDealer has joined forces with the leading retail industry business information company — EnsembleIQ; moved my office to Newark, N.J. (Paradise on the Passaic River); and hosted the largest-to-date ProDealer Industry Summit (with our partners at the National Lumber and Building Material Dealers Association).

We also racked up 2,208,014 page views at HBSDealer.com.

Thanks to the metrics masters at EnsembleIQ, it was easy to identify those storylines that qualify as “blockbusters,” defined by me as a headline that generates at least 50 times the average pageview count.

Here were the big four, stories that shook up the industry and hint at the blockbusters to come.

“It’s a deal. True Value agrees to a sale.” (April 20) Retailers are passionate about their co-op. They’re even passionate about the other guy’s co-op. So when True Value made an historic switch to a no-investment distributor model through its sale to ACON Investments, the hits kept coming. The above headline was the top hit-generating story of the year, without even counting the related stories “Fighting words from Ace and True Value,” and “True Value vote looms large.”

“Former Home Depot exec to lead Lowe’s” (May 22) Just when you thought the biggest rivalry in home improvement couldn’t get more intense, here comes a former Home Depot executive to take charge at Lowe’s.

8

Marvin Ellison, previously the orange-aproned executive VP of U.S. Stores for Home Depot from 2008 to 14, took over the keys to Lowe’s July 2. Shortly afterward, an executive decision at Lowe’s created blockbuster story no. 3 …

“Lowe’s to close Orchard Supply Hardware.” (August 22) In August, Lowe’s announced plans to close all 99 Orchard Supply Hardware stores by the end of the year in order to focus on its core home improvement warehouse model. “Our strategic reassessment is ongoing as we evaluate the productivity of our real estate portfolio and non-retail business investments,” Ellison said at the time. That reassessment led to another big story — an October announcement of the closing of 20 Lowe’s brand stores in the U.S. “BlueLinx Booms with Cedar Creek.” (March 12) The task of moving truckloads of building products is increasingly difficult. And increasingly newsworthy. News of the $413 million deal broke in March, and the integration of BlueLinx, the Atlanta-based building products distributor, and Cedar Creek into a 70-location distributor in 40 states continues to this day.

The story ranks fourth on our list of blockbusters.

We’ve learned that blockbusters can come from anywhere, but they tend to stick to the bread and butter themes of hardware retailing, big box competition, retail format survival and LBM partnerships. These areas will give us our blockbusters in 2019.

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.

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Corporate Officers EXECUTIVE CHAIRMAIN Alan Glass CHIEF EXECUTIVE OFFICER David Shanker CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER Rich Rivera PRESIDENT, PATH TO PURCHASE INSTITUTE Terese Herbig CHIEF DIGITAL OFFICER Joel Hughes CHIEF INNOVATION OFFICER, INNOVATION Tanner Van Dusen EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCE Ed Several

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NOVEMBER/DECEMBER HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

NEWS + ANALYSIS

ACS Gets Down to Business, Quickly

By Andy Carlo In a span of roughly two months, recently-founded American Construction Source (ACS) has rapidly become a major player in the LBM industry.

ACS made a big noise in late September when it announced its founding and the acquisition of Meek’s Lumber Company. At the time, Springfield, Mo.-based Meek’s operated more than 50 locations.

Founded in 1919, and the 2014 HBS

Pro Dealer of the Year, Meek’s yards are predominantly in Missouri with locations in Arkansas, California, and Nevada.

The move marked the entry of ACS in the pro dealer ring: ACS is backed by

by Angeles Equity Partners, LLC, a Los Angeles-based private investment firm, and Clearwater Capital Group, L.P., also a private investment firm.

Additionally, LBM veteran James Drexinger was unveiled as the new CEO of ACS. But ACS wasn’t done making news in 2018; and not by a long shot. On Oct. 2, the newly-formed building materials distribution company announced that it had acquired Edwards Building Center and Breckenridge Building Center — both based in Colorado.

Located in Edwards, Colo., Edwards Building Center is a one-unit pro dealer and Stihl equipment dealer.

Breckenridge Building Center, located in Breckenridge, Colo., is a full-service lumber and home improvement store and has been serving pros and DIYers for more than 45 years. Breckenridge is also a Do it Best dealer.

Although ACS revealed in early November that it was consolidating some of Meek’s operations with the closing of 6 locations in Missouri, that move was quickly followed by the acquisition of Arrow Building Center and its 16 locations in Minnesota and Wisconsin.

The new LBM holding company essentially moved its needle from zero to more than 70 yards, with estimated revenue of more than $500 million, in less than 60 days.

Management teams and the individual banners acquired by ACS have been left in place.

A Depot-Stanley Exclusive (well, sort of) The headline on the press release stated: “Stanley announces exclusive partnership with The Home Depot.” The announcement proclaimed Atlanta-based Home Depot as the exclusive home improvement retailer, beginning in 2019, for its Stanley hand tools and storage product portfolio — plus the Fatmax product line.

A big story? Yes. True? Not entirely. By “exclusive,” the announcement meant “channel exclusive.” To be clear, Stanley products and Fatmax will continue to be sold as usual through hardware stores and lumberyards — but not Lowe’s.

Still, the announcement described the agreement as one of the largest exclusivity partnerships in the tools and storage industry.

“This partnership with The Home Depot represents an exciting alignment that provides both pro and DIY consumers with unparalleled access to the world-class Stanley and Stanley Fatmax portfolios,” said Jeff Ansell, executive VP

10

and president of global tools & storage for Stanley Black & Decker.

New Britain, Conn.-based Stanley Black & Decker and The Home Depot also enjoy a channel exclusive with DeWalt Flexvolt cordless tools and Fatmax makes a big box move.

DeWalt hand tools.

Meanwhile, Stanley maintains a channel exclusive with Lowe’s in the form of its Craftsman products, which are also available at Ace Hardware. During Stanley’s third-quarter earnings report, Ansell said the recent Sears bankruptcy and customer enthusiasm for Craftsman “gives us confidence that we can deliver $1 billion in Craftsman growth by 2021,” — six years ahead of schedule.

NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

Statement of Ownership, Management, and Circulation 1 Publication Title: Hardware & Building Supply Dealer 2 Publication Number: 0360-7300 3 Filing Date: 9/30/2018 4 Issue Frequency: Monthly 5 Number of Issues Published Annually: 10 6 Annual Subscription Price: $119 7 Complete Mailing Address of Known Office of Publication: 8550 W Bryn Mawr Suite 300, Chicago, IL. 60631 8 Complete Mailing Address of Headquarters or General Business Office of Publisher: See No. 7 9 Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor: (Publisher) Jon Kenlon, Publisher, see No. 7; (Editor) Ken Clark, Editor in Chief, One Gateway Center 11-43, Rayomond Plaza West, 16th Floor, Newark, NJ 07102 10 Owner (Full Name and Complete Mailing Address): EnsembleIQ, see No. 7; 11 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of

Bonds, Mortgages, or Other Securities: None 12 Tax Status (The Purpose, Function, and Nonprofit Status of this Organization and the Exempt Status for Federal Income Tax Purposes): Has Not Changed During Preceding 12 Months 13 Publication Name: Hardware & Building Supply Dealer 14 Issue Date for Circulation Data Below: September 2018 15 See Chart Below 16 See Chart Below 17 Publication of Statement of Ownership for a Requester Publication is required and will be printed in the October 2018 issue of this publication 18 Signature and Title of Editor, Publisher, Business Manager, or Owner: I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/ or civil sanctions (including civil penalties): John Kenlon, Publisher. Sept. 20, 2018

Sections 15 and 16

Average No. No. Copies of Copies Each SIngle Issue Issue during Published Previous 12 Nearest to Months Filing Date

15 Extent and Nature of Circulation a Total Number of Copies (Net Press Run) b Legitimate Paid and/or Requested Distribution (1) Outside County Paid/Requested Mail Subscriptions (2) In-County Paid/Requested Mail Subscriptions (3) Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid or Requested Distribution Outside USPS (4) Requested Copies Distributed by Other Mail Classes Through the USPS (e.g., First-Class Mail) c Total Paid and/or Requested Circulation d Non-Requested Distribution (By Mail & Outside the Mail) (1) Outside County Non-Requested Copies (2) In-County Non-Requested Copies (3) Non-Requested Copies Distributed Through the USPS by Other Classes of Mail (4) Non-Requested Copies Distributed Outside the Mail e Total Non-Requested Distribution f Total Distribution g Copies Not Distributed h Total i Percent Paid and/or Requested Circulation

29,437

31,237

21,153

21,786

0

0

0

0

0 21, 153

0 21,786

7,851 0

9,200 0

0

0

281 8,132 29,285 152 29,437 72.23%

203 9,403 31,189 48 31,237 69.85%

16 Publication of Statement of Ownership If the publication is a general publication, publication of this statement is required. Will be printed in Nov/Dec issue of this publication. Total Circulation includes electronic copies. Report circulation on PS Form 3526-X worksheet.

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HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER

11

NEWS + ANALYSIS

New Leadership for HDW Hardware Distribution Warehouses announced a replacement for CEO and President Kenneth R. Beauvais, who resigned Nov. 5. Billy Stapleton has been appointed by the new HDW Board of Directors as president of HDW. Prior to becoming president, Stapleton was the VP of merchandising for the hardware distributor. He has been with HDW for 23 years.

“The board is confident that under his leadership and guidance HDW will continue to move forward,” according to the announcement.

No reason was given for Beauvais’ departure.

The change at the top comes more than a year after HDW combined the operations of its distribution centers in Shreveport, La., and Houston, Texas into a single facility in Marshall, Texas, where it set up its headquarters.

HDW took on the Houston facility when it acquired the distributor formerly known as Handy Hardware in 2016.

HDW also operates a distribution center in Greenwood, Mississippi.

In a press release from September, Beauvais pointed to strong sales at the company’s Fall Market, which benefited from 60 new dealer attendees.

HDW is a product of multiple mergers in the hardware distribution industry.

It was formed in 1994 with the combination of three companies: South States, Inc. of Shreveport, La.; Henderson & Baird Company, Greenwood, Miss.; and Higginbotham-Pearlstone Hardware Company, Dallas, Texas. That combined entity took on the name of “South States,” and later changed to HDW. Stapleton has worked in the wholesale hardware industry for more than 30 years and began his career with Higginbotham-Pearlstone.

Hardware Distribution Warehouse,

Kenneth R. Beauvais resigned as CEO of Hardware Distribution Warehouses Nov. 5.

Inc. is an employee-owned company.

It provides independent hardware and lumber yards a source for retail products.

The company’s web site says the distributor today serves more than 2,000 lumberyards hardware stores and other retailers in 11 southern states.

HDW is a member-owner of Distribution America described as the largest U.S. network of independent hardware and paint sundries wholesale distributors.

News Map: Lowe’s Store Closings Mooresville, N.C.-based Lowe’s announced an unprecedented round of store closings. Of the 47 locations, twenty are located in the United States, the rest are in Canada.

“While decisions that impact our associates are never easy, the store closures are a necessary step in our strategic reassessment as we focus on building a stronger business,” said Marvin R. Ellison, Lowe’s president and CEO. Lowe’s expects to close the 47 stores by the end of the

12

company’s 2018 fiscal year — that’s Feb. 1, 2019.

Closings are slated for Graysville, Ala.; Aliso Viejo, Calif.; Irvine, Calif.; South San Francisco, Calif.; San Jose, Calif.; Orange, Conn.; Granite City, Ill.; Gurnee, Ill.; Portage, Ind.; New Orleans, La.; Quincy, Mass.; Burton, Mich.; Flint, Mich.; Mankato, Minn.; Bridgeton, Mo.; Florissant, Mo.; New York City (both Manhattan locations); Shippensburg, Pa.; and Irving, Texas.

NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

A Regional LBM Force Rises in the West BIP and Homewood Holdings eye growth in the pro dealer market.

By Andy Carlo Anyone paying attention to the housing market over the past two years knows that America needs housing. And you can’t build those new homes without sticks and supplies.

Homewood Holdings, with the financial backing of investment firm Building Industry Partners (BIP), is planning to play a big role in this growing business.

The foundation for Homewood Holdings was the acquisition of the threeunit Homewood Building Supply, located near Sacramento, Calif., in April 2016.

Last February Homewood Holdings acquired two-unit pro dealer Evergreen Lumber, based in Port Orchard, Wash.

In November Homewood Holdings acquired Building Supply and Lumber Co., Inc. — a Sacramento-based pro dealer founded in 1946 that serves customers in Northern California.

BIP isn’t a novice to the industry. The firm’s principals have been involved in the formation and early growth of multiple industry heavyweights including U.S. LBM, Kodiak Building Partners, Rugby Architectural Building Products, and U.S. Fence Solutions, among others.

“Building Industry Partners’ core mission is to fuel the entrepreneurial flame of the LBM industry’s most talented and trusted operators, and to provide them the capital and support to execute their strategic vision and build world-class pro dealer businesses,” says Matt Ogden, founder and managing partner of BIP. According to Ogden, BIP knew Jim Stockman — Homewood Holdings CEO and Homewood Building Supply president — for more than a decade, before partnering with him to create Homewood Holdings. Stockman had worked for and eventually succeeded

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Lonnie Schield as Head of Terry Lumber, a piece of the former Stock Building Supply. Shield had been a long-time partner and advisor at BIP. “An opportunity came up in Jim’s market to buy a longstanding business, and BIP and Jim partnered up to do what Jim has done for three decades — build and lead talented operating teams, bringing a partnership mentality to his employees, customers and suppliers, and leading by example,” Zach Coopersmith, BIP managing partner, told HBSDealer.

“Jim has a proven track record of leading pro dealer organizations to prosperity, and this time, he’s doing it for himself and his partners.”

With the calendar about to turn to 2019, and as modest growth in home building and remodeling are both projected for the year, Homewood Holdings has its sights

on additional expansion.

“Homewood Holdings will continue to execute on the plan BIP and Jim Stockman laid out — to build a worldclass regional pro dealer organization, by attracting and aligning interests with the most talented operators in its markets and focus on long-term value creation by helping its employees, customers and suppliers be more successful,” Coopersmith said.

The formula includes finding solidperforming, independent, family-owned businesses throughout California and the Pacific Northwest; businesses with reputations for integrity, quality and service.

LBM FORCE continued on page 27

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Chicago set the stage for the 2018 ProDealer Industry Summit.

Voices of the Summit

By Andy Carlo CHICAGO — In an industry that is facing a labor shortage along with a shrinking workforce, recruitment and retention was one of the big topics discussed at the 2018 Pro Dealer Industry Summit.

A panel of executives from Alexander Lumber, BMC Stock Holdings, and Curtis Lumber discussed some of the strategies they have employed during a discussion moderated by Tony Misura, founder and president of Misura Group, which provides recruiting services to the lumber, millwork, and truss industry.

Part of the problem is the image the industry projects, according to Sandy Zelka, CFO of Curtis Lumber based in Ballston Spa, N.Y. “It’s an industry that doesn’t seem very glamourous. And recent

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graduates don’t think of it as a place where they can use their Adam Hendrix, right, accounting degree. But they can, with Epicor’s Jeff Wilson. and we want you,” Zelka said.

Curtis Lumber recently hosted It’s the big things and the little nearly 3,000 seventh, eighth, and things that earned Chic Lumber the ninth graders to a career open house HBSDealer Independent ProDealer of to promote jobs at the dealer and the Year Award. With three-locations the industry, according to Zelka. The in the St. Louis area, Chic operates company’s first annual “Career Jam” in a market where housing starts are is in partnership with area builders and down, but the company’s sales were running up 12%, says Adam Hendrix, contractors while giving students an second-generation owner and former opportunity to learn about careers in Navy Seabee. The crowned jewel of the lumber industry. the company is its Design Center, “Everyone wants their kid to go to where high-tech video screens coexist with classic and modern kitchen college, but skilled labor can make as much [money], if not more, without the and bath vignettes. Chic is a major supporter of the St. Jude Hospital college loans,” Zelka noted.

Dream Home program for families Mike McGaugh, executive VP and with children in need of medical care chief operating officer of BMC, cited — just one example of its communityoriented culture. a recent study from the Harvard Joint

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EPIC SHOW Thanks to everyone who made ProDealer 2018 a great success. Join us next year for the LBM event as big as the Rockies!

October 8 – 10, 2019 Broadmoor Resort, Colorado Springs

When John Bates approached the podium, he brought 45 years of contributions to the LBM industry with him. Bates, whose entire career was at Barnes Building Materials in Cedar Falls, Iowa, received the career-service award from the NLBMDA. “John has morphed from dealer, to valued board member to ambassador and more importantly to friend,” said Northwest Lumber Association President Cody Nuernberg. “John is a pioneer in the LBM association world as numerous associations including one in our region heard about his Ambassador Program and not only liked it but they copied it. The industry and more importantly, the world, need more John Bates’.”

Bob Sanford of Sanford & Hawley took the gavel as chair of the National Lumber and Building Material Dealers Association. “Housing, and by extension, the lumberyards and building material dealers that supply the industry, are integral to a vital economy and to our nation’s continued success,” he said. “With the ever-changing legislative landscape in Washington, it is more important than ever that we continue to represent our collective interests in our nation’s capital so that we may all thrive in the years ahead. With an ear to the legislative machinations in Washington, and an eye to the technical advancements that keep our industry relevant, I am proud to work with and for building supply retailers as we face the increasingly competitive environment that marks our next century as a trade association.”

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John Bates

While accepting the 2018 Pro Dealer of the Year Award at the Pro Dealer Industry Summit, Drexel Building Supply President Joel Fleischman delivered a passionate message about the future of the industry — “Dream bigger.” The idea referred especially to attracting the next generation of leaders, and also about confronting head-on the labor shortage impacting much of the lumber and building material industry. “Pay them more!,” Fleischman told the audience. “I challenge you guys to pay tomorrow’s rock stars like they ought to be paid.” Drexel Building Supply is based in Campbellsport, Wis., and operates seven locations in the state. The company’s slogan is “Supplied. Happiness,” and Drexel Building Supply is among a new generation of pro dealers who maintain a strong focus on company culture.

Joel Fleischman

Bob Sanford

Center for Housing Studies that indicates the LBM and construction industries are losing five employees for every employee that joins.

“We’ve got a lot more to be proud of for our industry, and we need to band together to promote it at the junior high and high school level,” McGaugh said.

A veteran of Dow Chemical prior to joining BMC, McGaugh pointed to the Science, Technology, Engineering, and Mathematics (STEM) initiative, which partnered with the Boy Scouts and Girl Scouts of America.

The program was founded by a number of petroleum and chemical companies, including Exxon and Dow, to bring career possibilities to students who might have considered a career in the industries.

“The chemical industry faced headwinds and solved the problem by investing in

programs like STEM. We need to figure out the same exact type of program for the construction industry,” McGaugh said.

BMC already focuses some of this recruiting efforts at local tech schools and regional colleges.

At Illinois-based pro dealer Alexander Lumber, part of the process for retaining employees has been to empower them.

The company recently asked its drivers how their jobs could be improved based on a “Own the Last Mile” strategy: the driver is the final step in process of selling and delivering materials to contractors.

Alexander drivers take pride in their clean trucks, “nice” polo shirts, and the ability to pass out their own business cards, according to Russ Katherine, president and CEO of Alexander Lumber. “We thought the

NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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process would be met with resistance, but the drivers came up with the rules and procedures,” Katherine noted.

Focusing on why an employee might depart a company for other pastures, Jordan Lierz joined the discussion. The daughter of Franklin Building Supply President and CEO Rick Lierz, she discussed how she left a career at mega accounting firm Ernst and Young and moved back to Boise, Idaho, to consider career options. “I left the ‘big four’ accounting world in search of something a bit smaller and something a bit personal,” Lierz said. “For me, one option is the lumber industry; it runs in the family.”

Zelka notes that Curtis Lumber employees are instructed to keep their eyes open for people they meet in the community who might provide exceptional service, whether it’s a coffee shop, convenience store, or clothing store employee.

“If talent walks in the door, grab it, find a place for it,” Zelka said “Right now, in this industry, the big and the great are retiring. We are going to lose 30% of our workforce because of retirement. This is a hot topic for all of us.”

Bold-face names of the NLBMDA Chair: Bob Sanford, Sanford & Hawley, Unionville, Conn.

Chair-Elect: Russ Kathrein, Alexander Lumber, Bloomington, Ill. First Vice Chair: Jim Bishop, Vesta Lee Lumber, Bonner Springs, Kan. Immediate Past Chair: Rick Lierz, Franklin Building Supply, Boise, Idaho; Manufacturers and Services Council Chair: Clarence Wilkerson, Weyerhaeuser, Federal Way, Wash.; Federated Association Executive Chair: Cody Nuernberg, Northwestern Lumber Association, Dakota, Wisc.; Treasurer: Scott Engquist, Engquist Lumber, Harcourt, Iowa

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Looking Ahead

By Andy Carlo Single-family housing construction growth of 2% is projected for 2019, according to John Burns, the CEO of John Burns Realty, LLC — a research firm focused on the housing market.

Burns delivered his forecast to a room full of LBM executives at the 2018 Pro Dealer Industry Summit, held here at the Radisson Blu Aqua Hotel. The forecast for 2020 is also 2% growth, Burns said.

And there are disruptive forces on the horizon, including the possibility of a recession.

According to Burns’ analysis, there is a 27% chance of a recession occurring in the next 2 years and 56% chance it may occur within the next 4 years.

The respected consultant and analyst pointed to some culprits, chief among them are debt piling up from auto loans and student loans. The housing market will not be the cause of catastrophe this time around, Burns said.

“If we have a recession it’s going to be a hiccup,” he said, noting it will be nowhere near the magnitude of the previous “Great Recession.”

At the current rate — on a scale of 0 to 100 — Bruns said the economy is running at a level of 75. “The economy is doing great and that’s because of the Tax Act. That’s been a stimulus that is working,” Burns noted.

“Small businesses are hiring and consumer confidence is up 9% year over year and near an all-time high.”

But production-builder community counts have gown only 1% in the last year, and publicly traded builders have seen their community count fall. “They are buying each other because it’s the only way to grow,” Burns explained.

At the same time, high development costs and a shortage of housing has allowed builders to push up the prices of homes. “We’ve been so supplyconstrained on new homes that builders are bidding up lot prices, but there are people who are willing to step up and pay the price,” said Burns. He also noted that 11 out of the top 19 publicly traded builders are charging an average price of $400,000 or more for a new home. That’s generally out of the affordability range of the American family making $70,000 per year.

Looking at entry-level builders, about 33% reported that they are moving further away from job centers when building new homes.

About 55% said they are using a smaller lot size, and 45% said they are turning to smaller homes.

Burns expects remodeling spending to remain steady — as more homeowners stay put and choose remodeling over purchasing a new home — but he also expects the total amount spent on each remodeling project to decline as homeowners turn to cheaper projects.

Other disruptors lying ahead for the industry include factorybuilt homes. Both domestic and Japan-based home builders are beginning to demonstrate traction in regard to the growth of the U.S. factory-built home market. And investors, including Amazon, are pumping more money into the market.

Additionally, factory-built homes have become an avenue for growing smart home product sales as younger consumers seek out the latest and greatest in home technology.

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Inside Depot’s Product Laboratory Stronger, safer, better are some of the goals of this underground lab

By Ken Clark Three levels below the surface of the earth, beneath a giant retail headquarters, engineers and lab workers are breaking, spilling, stretching and — in some cases flushing — home improvement products in the spirit of quality and innovation.

HBSDealer was invited inside the Home Depot Product Quality and Engineering Laboratory in Atlanta recently, and our cameras were clicking.

The 10,000 sq. foot lab was buzzing with experiments — not so much to invent a new brain-wave powered hammer, but to make existing products better.

How? Partly by subjecting products to stresses imparted by a ruthlessly efficient Tinius Olsen universal testing machine.

Or by dropping them, shaking them, or otherwise looking for ways to make products stronger, safer or somehow better-positioned to improve the customer experience.

Ryan Anderson is lab manager for the laboratory, which has about 15 people focused on a vague number of concurrent experiments. During a recent visit, the wide-range of products under BELOW: A recent visit included the cracking of quartz countertops.

ABOVE: The Home Depot Product Quality & Engineering Lab opened Oct. 14, 2013.

RIGHT: A powerful torque machine proved that these Husky wrenches bend under intense pressure, but don’t break.

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NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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BELOW: Will this colored liquid leave a stain? Time will tell.

BELOW: The 6-footdiameter integrated light sphere would look comfortable on the set of a science-fiction film.

ABOVE: Ryan Anderson is one of about 15 lab workers who perform experiments on just about everything, including mulch.

the gun included luxury vinyl flooring, quartz countertops and mulch.

“What we do here can definitely prevent toilets from showing up with a crack when it gets delivered to a customer’s home,” Anderson said. “These things improve the customer experience in a lot of ways.”

Speaking of toilets, a machine in the corner was simulating the equivalent of 55 years of flushing. Around the corner, and in the spirit of stain resistance, a bottomless glass containing a fruit-juice like substance was positioned over the intersection of three flooring tiles. In the environmental experimentation area, two samples of mulch were being put through the sun test. And quartz countertops were being slowly snapped by the relentless pressure of the aforementioned Tinius Olsen machine.

Visitors to the lab didn’t actually see the wrench bent out of shape by the prodigious strength of a torque and torsion machine, but the evidence was clear. The wrench bent, but didn’t break — a notable safety feature to those who dwell in extremely high levels of torque.

In a laboratory crowded with specialized testing equipment, perhaps

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the most impressive testing device is the Integrating light sphere, a machine that looks very similar to an escape pod from an intergalactic space cruiser. Black on the outside, its interior features a white reflective coating and several sensors that measure color temperature and lumens (among other things), in concert with the nearby spectroradiometer.

The equipment allows the retailer to take years off the study of light bulb performance. “We don’t have 20,000 hours to test LED,” Anderson said. “We know, though, that LED degrades over time in a linear path.”

Another benefit of the lab is costavoidance. Anderson said a $250 test could avoid millions of dollars in fines or damage at some point in the supply chain.

The bottom-line profit potential of

better and more-innovative products was a major theme during Home Depot’s third-quarter earnings call.

CEO Craig Menear told investors that the bulk of the retailer’s 3.5% increase in average ticket for the three months ended Oct. 1 came in the form of product innovation. “We continue to see both pro and consumers trading up,” he said.

Senior VP of Merchandising Ted Decker walked all over the topic: “A classic example of that is a category like vinyl flooring,” Decker said. “Vinyl flooring was almost on its deathbed, and then innovation came along, and you now have vinyl plank flooring that is flying out of the stores at a premium price. It’s a great value to the customer.

It’s easy to use. It’s simple for the pro.

And that’s a classic example of why innovation drives sales.”

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Technology is Friend, Not Foe, of Building Supply Companies

By Rick Gardinier You don’t have to look much further than the recent closing of 50 Lowe’s stores to realize the retail sector of the building supply industry has been disrupted. Largely known as one of the industry’s behemoths, these Lowe’s closings are occurring despite a continued uptick in the building supply business. There are a multitude of reasons for this industry disruption including the influx of Millennials into the home building and remodeling phase of their lives. But I would contend the largest source of disruption is this: immense change in consumer behavior, no matter what the demographic, towards wanting a robust and integrated digital experience.

Having a digital experience isn’t new. But, extending it throughout the consumer journey — and ensuring it transcends platforms — is. When I think of innovation and category disruption in the building supply and materials industry, two distinct areas come to mind: product innovation (connected and green products for instance), and innovation throughout the buying and selling process.

Those are the two greatest areas of opportunity for brands looking to gain market share, retain customer loyalty and redefine their brand.

Digital Disruption Consumer behavior changes are being driven by technology — plain and simple — across every aspect of the industry.

• Ikea has created an Augmented

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Reality app allowing you to envision furniture in any room of your house.

• In the Internet of Things (IoT) space the Ring doorbell allows you to answer your door from your smartphone while viewing a live video of the person on your doorstep.

• Amazon’s Alexa and Google Home have taken over the smart home market by storm — controlling everything from smart locks, to thermostats, to small appliances.

• HGTV is providing interior decorating advice through a Facebook Messenger chatbot called Chatbot Hazel.

• Connected sensors allow just about anything to be tracked and optimized — inventory, equipment and even vehicles — allowing business leaders to focus less on logistics and more on building the business.

• The Home Depot is appealing to the new wave of Millennials by taking a mobile first approach to the store shopping and equipment rental process.

• And perhaps the most disruptive technology of all...3D Printing...is

Ferguson’s New Launch Ferguson Enterprises, the U.S. plumbing supplies giant, Ferguson showroom in Virgina. announced a deal with Silicon Valley-based consulting company RocketSpace in an effort to — in the words of the announcement — “reimagine the future of building development through new technology solutions that enhance customer experiences.”

As part of the partnership, Ferguson and RocketSpace will explore multiple focus areas where construction technology can help solve industry challenges, add value to their partners and scale across their customer base.

“Helping our customers succeed in a rapidly changing marketplace requires us to proactively explore and leverage technologies within our business and across our customer base,” said Kevin Barnes, vice president and managing director of Ferguson Ventures. “Teaming up with RocketSpace further immerses us in the global startup ecosystem. It also helps us envision what’s truly possible and provides us with the building blocks to start creating a tangible solution that will thrive in today’s increasingly digital environment.”

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already enabling builders to “print” an entire house in 24 hours.

What I find interesting about all of these examples is much of today’s innovation is coming from outside of the typical building supply industry players.

Change in Mindset If you are a retailer, manufacturer, contractor, or builder, how do you keep pace with these new digitally empowered buyers? While focusing your team on developing your own proprietary innovative products should probably be one of your long-term goals, you might be surprised to learn there are simpler ways to bring technology innovation to your business quickly.

Successful business leaders need to hit innovation head on, and that requires a simple change in mindset.

The good news is: because change is happening so rapidly, you can become an invaluable resource for your

Untitled-1 1 22 NOVEMBER/DECEMBER 2018

customer just by focusing some of your energy on innovation.

• Pay attention to what some of the industry’s best innovation labs are doing. The Home Depot’s innovation lab focuses on the future of retail and are currently experimenting with emerging voice technologies and artificial intelligence. For certain companies, perhaps partnering is an option.

• Think “mobile first” and use digital tools to engage with your customers.

Even the smallest construction business can make an impact by incorporating text messaging or even mobile video conferencing into the sales and delivery process. If you hear about a great app, download it and try it. Eventually you’ll likely find one that positively impacts your business.

• Keep an eye on the building and construction industry startup ecosystem. Start small by doing research. Industry analysts like

HARDWARE + BUILDING SUPPLY DEALER

Crunchbase frequently provide updated trend information on their website. Many cities have networking events that feature the latest startups coming out of universities and incubators. More established and sophisticated businesses can form formal partnerships with university entrepreneur leaders to solve business problems using emerging technology.

Technology innovation is more than a buzzword. It’s a big topic that can be daunting, particularly if you try to boil the ocean; or worse, don’t start at all.

Yet, businesses that find a way to not only keep abreast of the trends, but actually apply them, find themselves at a significant advantage over their competition. Standing on the sidelines is simply not an option.

Rick Gardinier is partner and chief digital officer at Brunner.

Visit www.brunnerworks.com.

11/12/2018 2:50:20 PM HBSDealer.com

LMC on the Innovation Trail

The LMC team in Boston

The fourth annual LMC Leadership Summit was built around a theme of “Innovation.” The stated goal: to better understand incremental and transformative innovation, the risks involved, and the need to develop a portfolio of options for innovation-driven growth.

“We wanted to visit companies and institutions that really push attendees to think outside the box,” said Jessica Scerri, chairman of the LMC Aspiring Leaders Group. “How can the next generation of leaders step beyond the status quo and re-imagine their businesses?”

And so, the summit traveled to Boston for three days of talks with innovators in their respective industries. First stop was the Massachusetts Institute of Technology, where the team visited the MIT Museum and participated in a hands-on structural engineering workshop. The leaders then attended MassChallenge, the world’s largest global accelerator network of startup companies, and met with several of the disrupters.

“I really enjoyed the MIT Museum, it definitely caused me to think differently and outside the box,” said Ian Galbraith of

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Texas-based Foxworth Galbraith.

The event included several speakers that shared how they lead the effort to drive a culture that is rooted in innovation.

It also explored ways retailers are capitalizing on the demographic shifts that are providing both opportunities and risks for the modern retailer.

At Stanley Security’s Futures Innovation Factory, the team walked through the breakthrough innovation center dedicated to advancing technological innovation in the company’s business.

“I am very impressed with the opportunity, the idea generation, the collaboration, and the willingness of all the participants to share their insights,” said Tim Tryba from Consolidated Lumber.

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Capturing the Spirit of Life Giles Bowman, senior VP of merchandising, building materials at The Home Depot will accept the Spirit of Life Award at the upcoming City of Hope Hardware/Homebuilding Industry’s fundraising gala Feb. 18 in Las Vegas. Here’s Bowman’s take on the award, and the industry:

Q: Some of the most famous names in home improvement have been tapped for the Spirit of Life Award. What was your reaction to joining the list?

GB: It’s such an honor when you look at the Who’s Who list of names.

Naturally, the ones that stick out the most to me are Arthur Blank, Bernie Marcus, Pat Farrah, Bruce Merino and Craig Menear – members of The Home Depot family that I truly honor and respect, mostly for their servant leadership. But the names that go beyond Home Depot are also amazing industry leaders. So, to be added to this list of names is very humbling. Honestly, I was quite shocked when Bruce Merino called me about this. I just kept telling him that I hadn’t done anything to deserve this honor. I will be forever grateful for this Spirit of Life award and I hope I can bring greater awareness to the awesome treatment and research occurring at The City of Hope.

Q: You recently visited the City of Hope in California. What was your takeaway?

GB: It just seems like they are clicking on all cylinders. Most impressive is the

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talent level of their doctors, researchers and scientists — smart people doing amazing things. My other takeaway is the level of care and attention they give their patients. Unbelievable bed side manner. They treat their patients like people. Not names on a chart. At such a difficult time for the patients they just want to know someone cares about them and is doing everything in their power to help.

Q: Any eye-opening surprises?

GB: That they believe they will have a cure for Type 1 Diabetes in the next 5 years. What a powerful goal they have set!

Q: What’s the connection between a company’s philanthropic spirit and its success?

GB: Giving back is one of our eight core values, and we have no doubt that it’s these values given to us by our founders that are critical to our success. In this case, being involved in the communities where we not only do business, but also live, is essential to our success.

Q: How would you describe the spirt of philanthropy in the home improvement industry in general, and at Home Depot specifically?

GB: I think the home improvement industry has a unique opportunity to make a difference in communities perhaps like none other. For example, when disasters strike, we become a part of the community infrastructure.

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Giles Bowman

Like with disasters, we have unique capabilities, products and insight to help groups in truly meaningful ways that go beyond financial support. In 2011, The Home Depot Foundation began to focus on veteran homelessness. We’ve committed millions, but I’m mostly proud of the hard work we’ve done by improving more than 40,000 veterans’ homes and facilities with the help of our skilled and dedicated Team Depot volunteers.

Q: What would you say to an industry executive to convince him or her of the importance of getting involved in big or small ways that give back to the communities they serve?

GB: Well, first of all I hope I don’t have to convince any industry executive to get involved. We are all blessed to be in the positions we are and giving back should come from the heart, not because I try to convince you. By giving back we can make an impact. A real lasting difference in this world. If you want your heart to swell up and feel good, do something for someone else.

And do it because you want to, not because you’re told to.

Q: As City of Hope’s top ambassador for the year, what is

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your go-to message that you like to share with others about City of Hope.

GB: First and foremost, I want everyone to get pissed off at cancer! What a horrible disease that wins too many battles. Too many people taken too soon — 1.7 million people will be diagnosed with cancer this year. All hoping that some type of treatment will work for them. I want everyone to know that the City of Hope is truly turning hope into reality. But they need our help. At Depot we love to roll up our sleeves and provide sweat equity to the causes we support.

That maybe painting a house or building a wheelchair ramp. Unfortunately, that sweat equity is not possible at The City of Hope. Their sweat equity comes from their doctors, scientists and researchers. And they need donations to fuel their treatment facilities and research experiments. I’m not sure when we will find a cure for cancer but I know one thing. I have hope. The greatest hope of all —The City of Hope.

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A delegation from the Hardware/Homebuiding Industry toured the Duarte, Calif., facility in October.

City of Hope’s Big Night The 2019 Spirit of Life Golf Tournament and Award Reception is slated for Feb. 18 in Las Vegas.

The Spirit of Life Award is City of Hope’s most prestigious honor, presented to an esteemed community of industry leaders around the world who have made a significant commitment to support those in need.

Honorees are selected for their notable contributions to the

community in which they live and the profession in which they work.

It is at the Spirit of Life Award Reception, held in honor of this very special recipient, where over 800 of Giles Bowman’s hardware industry peers will gather to recognize and celebrate his contributions to the industry and boundless compassion for humanity.

For more information, visit cityofhope.org/hhi/sol

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MARKET INSIGHTS

eRetailer’s Rule No. 1: ‘Don’t be Boring’

Amazon Go Store

By Ken Clark Chicago — There was plenty to talk about at the third-annual Home Improvement eRetailer Summit, and the polished presentations (there were no technical difficulties at this event) touched on taxes, supply chain, best practices, and statistics. The spirit of the event was summed up nicely by the title of the kick-off presentation: “Really Bad Time to be Boring: Reinventing Retail in the Age of Amazon.”

It’s also a time to embrace change — even the term “omni-channel” which for the past few years was a staple of 1 4/12/16 retail FK-HHN-ad-5.5x5.pdf headlines and white papers,4:26 is PM falling into obsolescence along with “Information Super Highway.” Today’s experts like the term “continuous retail,” — or simply “retail,” with a nod to the

acceptance of multiple channels as mainstream.

In his opening presentation, Steven Denis, founder and president of SageBerry Consulting, described waves of change that have played upon the retail business. These waves of disruption are likely going to intensify, he said, adding: “The key for a retailer is to learn how to surf.”

And such learning will require keeping a company’s collective eyes open for trends. And there’s no shortage of these either. The conference took place within walking distance of multiple Amazon Go stores in downtown Chicago. Presenter Laura Heller, director of external communications for Performics, described these as “a

1-800-526-5265

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NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

grab-and-go convenience store for the office worker.” The receipt from the cashierless experience actually informs the customer how much time was spent in the store — an important point in today’s time-pressed world.

Amazon Go is cutting edge, but Jeff Bezos’ latest baby is the Amazon 4-Star concept. Now with three stores, this retail concept features items marked 4-stars or higher by the ratings of Amazon.com.

Not every retailer can copy the Amazon model — it’s too expensive.

But according to Joe Derochowski, Executive Director, Industry Analyst, The NPD Group, now is a very good time to invest. The population demographics are smiling on the home improvement industry. “You are in a growth window,’ said Derochowski.

“Take advantage of it while you can.”

Home improvement is still in the early stages of conversion to online sales. NPD research pegs this statistic at 17%, lagging behind consumer electronics, small appliances, footwear and other sectors. But the dollar-percent growth vs. one year ago is at the top of the list — 26%. Among home improvement categories, the specific leaders in online sales are air filters, area rugs, blinds, plumbing and storage, according to the NPD Group tally.

Event founder Sonya Ruff Jarvis described the summit as a “much-needed event for the home improvement industry.” The 4th annual summit will return to Chicago Nov. 6-8, 2019.

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NEWS + ANALYSIS and continuing to grow our team to keep pace with the additional demands from “We believe strongly in the local nature customers can be a challenge. We have of the LBM business — the power of the fantastic teams at HBS and Evergreen, local brand and maintaining the legacy and with that, we have had success at of the businesses we buy," Ogden said. attracting A+ talent who wants to surround "We are firm believers that the day-to-day themselves with other strong players,” battles are won or lost at the local level Stockman says. “While we have had a at pro dealers, and as such, we give a lot of success to date at both promoting lot of autonomy to each of our operating internal talent, and bringing in others businesses.” externally, we continue to actively search “Ideal fits have like-minded cultures for talent to join our team.”

— essentially, a partnership approach At the same time, prefabricated or towards employees, customers and manufactured homes are on the rise and suppliers,” Coopersmith says.

The current breakdown of Homewood Holdings’ end market mix is approximately 65% single-family builders, 20% multifamily, and 15% repair and We believe the role remodeling contractors. Like much of of the lumberyard the industry, the labor shortage has also will continue to be provided a challenge for Homewood in strong demand.”

Holdings, according to Stockman.

“Our businesses have grown -JIM STOCKMAN meaningfully over the past several years,

LBM FORCE continued from page 13

present an opportunity for large tech firms and innovators to ‘disrupt’ the industry in a number of potential ways.

“It is absolutely an exciting time in our industry, from growth in offsite construction to home automation and in-home technology,” Stockman says. “No matter the trends, and the jury is out on what technology solutions might reshape the homebuilding process, we believe the role of the lumberyard will continue to be in strong demand.”

Regardless what the future might hold, BIP and Homewood believe there is plenty of opportunity to continue growing organically and through acquisitions in its markets.

“If owners have a shorter horizon of one-to-five years to retirement, leadership transition, or liquidity, then this may be a nice time to consider an exit,” Coopersmith says. “But at the same time, as a buyer with a medium-to-long term outlook, we think it continues to be a prudent time to buy and own quality LBM dealers.”

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HBSDealer.com Untitled-1 1

HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 27 11/13/2018 12:11:05 PM

PEOPLE IN THE NEWS Lowe’s appointed Seemantini Godbole as chief information officer, effective Nov. 12. Godbole was previously senior vice president, digital and marketing technology, at Target Corporation. Godbole brings to Lowe’s more than 25 years of global technology experience. She helped lead Target’s digital technology transformation, including the re-architecture of the company’s digital platforms, implementation of agile product management and the introduction of technology for new customer experiences including the mobile applications, buy online and pick up in-store and ship from store programs, guest order fulfillment, digital wallet, localized pricing, and customer loyalty and engagement offerings.

Godbole has led development of long-term technology roadmaps, portfolio planning and engineering, operational support functions and ecommerce platforms. “I am excited to join Lowe’s and look forward to strengthening our competitiveness by developing a world-class technology team that will meet and exceed the evolving expectations of the customer while also providing the right tools and technology for our associates,” said Godbole.

Hultafors Group, which acquired Johnson Level & Tool in April, named Peter Chatel to take over the CEO role at Johnson Level and Hultafors Group North America. Previously, Chatel was a member of the senior executive team who led the turnaround of Senco Brands (global manufacturer and marketer of fastening systems) resulting in the successful transition of the business from private equity to Kyocera. Prior to this, Peter held executive leadership positions at Walter Meier Holdings, and Pentair Tool Group (General Manager for Porter Cable Power Tools, as well as for Delta Machinery). He spent the first 13 years of his career at Black & Decker in commercial and general management roles, including assignments in both Canada and New Zealand.

Orgill, Inc. announced new responsibilities for senior leaders beginning January 2019. Ron Beal, Orgill’s long-time chairman, president and CEO, will drop the president title, but will remain the company’s chairman and CEO. Boyden Moore, who FROM LEFT: Divelbiss, Moore, Beal and Hammers. currently serves as Orgill’s general manager of retail, will assume the position of Orgill president. Brett Hammers, will become Orgill’s executive VP of worldwide sales and supply chain. He will be responsible for all sales and product sourcing in support of Orgill’s U.S., Canadian, and international customer base. Eric Divelbiss will become executive vice president of finance and administration in addition to his current role as Orgill’s CFO.

Roseburg Forest Products has named Dawn Garcia as the forest products company’s new director of marketing. In her new role, Garcia will lead the marketing team, and will serve as a strategic partner and key driver of the company’s business strategy. Garcia will report to Ashlee Cribb, vice president of structural products and marketing. Since joining Roseburg in 2013, Garcia has held various roles in marketing and communications, most recently as marketing manager for the company.

She previously worked for SierraPine and the American Electronics Association, and operated her own consulting company for several years.

Fort Wayne, Ind.-based Do it Best Corp. promoted one of its senior leaders while also transitioning another manager into an executive leadership role. Vice President of Merchandising Steve Markley will serve as the company’s new executive VP of operations while William “Dent” Johnson, previously a divisional merchandise manager, will advance into the role of VP of merchandising. Markley has built on more than 30 years of industry experience, beginning his career in what was the company’s original distribution center in Fort Wayne. Johnson previously served for more than 20 years in senior roles with Michelin Tire Corporation, both in the United States and abroad.

28

NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

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29

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) Oct.: 1,228,000 1350

40

1300

30

NAICS 44413

(sales in $ billions)

3 34.5

32.5

32.8

34.2 31.4

20

1200

10

2.46

2.44

31.1

2.28

2.22

2 1250

(sales in $ billions)

2.2

2.24

1

1150

O

N

D

J

F

M

A

M

J

J

A

S

0

O

SOURCE: COMMERCE DEPARTMENT

JULY 2017

AUGUST

0

SEPTEMBER

JULY 2017

2018

AUGUST

SEPTEMBER

2018

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

Single-family starts (in thousands, SAAR) Oct.: 865,000 1000

HBSDealer Stock Roundup the percent-change performance of stocks based on Nov.15 prices

950

80 900

60 850

TSCO

800

O

N

D

J

F

M

A

M

J

J

A

S

ANNUAL CHANGE

40 O

SOURCE: COMMERCE DEPARTMENT

Existing-home sales (in millions, SAAR) Sept.: 5.15 million 6

20

LOW

DJI

DE

HD

0 -20

SWK

WY

5.8

BMC

-40

SHW

BLDR

5.6

-60 -15

5.4

BECN -10

-5

5.2

5

0

5

10

MONTHLY CHANGE BECN (BEACON); BLDR (BUILDERS FIRSTSOURCE); BMCH (BMC STOCK HOLDINGS); DE (DEERE & CO.);

A

S

O

N

D

J

F

M

A

M

J

J

A

S

HD (HOME DEPOT); LOW (LOWE’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

3.7% 3.5

30

October

6.5 60

137.9

$2.61

October

Nov. 19

140

$1.50

NOVEMBER/DECEMBER 2018 HARDWARE + BUILDING SUPPLY DEALER

$3.00

SOURCES: LABOR DEPARTMENT, THE CONFERENCE BOARD, AAA

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