HBSD-1220 by ensembleiq

NOVEMBER/DECEMBER 2020 Vol. 46 No. 10

TOP WOMEN IN HARDWARE & THE 2020

CLASS OF

BUILDING SUPPLY PLUS!

Leadership lessons to break glass ceilings

HBSDEALER HARDWARE + BUILDING SUPPLY

MARKET INSIGHTS 30 From the ProDealer Industry

Summit, forecasts for growth

34 Operation: Military Influence

Veterans in the industry look back at their time in uniform.

SPECIAL FEATURES 40 Co-Op Report:

From Ace Hardware Corp.: big numbers in Oak Brook; an Emery Jensen merchandise initiative; and Westlake Ace store openings.

18 Cover Story: Top Women in Hardware & Building Supply Highlights from the first virtual Top Women ceremony, and a celebration of achievement and diversity.

36 PRODUCTS

FROM THE EDITOR 8

32 Fast-forward with fastener trends 34 Huge demand puts pressure

on treated lumber

Putting the “e” into eCommerce

NEWS & ANALYSIS

IN EVERY ISSUE

10 HD Supply comes home 12 Milestone for 84 Lumber 12 A recall knocks for Ring 14 Adversity lifts Spahn & Rose

10 Product Knowledge 45 People in the news 46 Quikrete Industry Dashboard

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 in the United States: $110 one year; $200 two year; $14 single issue copy; Canada and Mexico: $130 one year; $235 two year; $16 single issue copy; Foreign: $150 one year; $285 two year; $16 single issue copy; 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,8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631. Copyright © 2020 by EnsembleIQ. All rights reserved.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

HERE’S WHAT’S ONLINE

See more and share more when you follow us on Facebook.

Replay the Top Women in Hardware & Building Supply virtual event! Three days of enlightened discussion with industry leaders are digitally stored at HBSDealer.com/ webinars.

Watch ‘Ken’s New Jersey Garage’ for a variety of cool product demonstrations at HBSDealer.com.

The polls are open. Your voice is wanted. HBSDealer publishes weekly poll questions on pressing industry matters, and other topics. For instance:

48%

Does your company have military veterans in leadership positions?

52% Yes

Poll questions and results appear every week at HBSDealer.com. Source: HBSDealer Survey

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

Point of Sale and Retail Management Serving Todayâ&#x20AC;&#x2122;s Leading Hardware Retailers Drive growth, profitability, and customer loyalty with a fully integrated retail POS system

This material is for informational purposes only. Exceptions, conditions, and limitations apply to your rights to use and the duty of Epicor to provide products and services. Epicor and the Epicor logo are trademarks or registered trademarks of Epicor Software Corporation in the United States, in certain other countries and/or in the EU. Copyright ÂŠ 2020 Epicor Software Corporation. All rights reserved.

FROM THE EDITOR

HBSDEALER HARDWARE + BUILDING SUPPLY

Putting the ‘e’ into eCommerce

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

Back at the International Builders’ Show in 2014, coach Jon Gruden in his keynote speech joked about his locker room pep talk covering the “Four ‘E’s of success: Energy, Effort, Enthusiasm and Intensity. One of his players interrupted: “Coach, I get what you’re saying. But ‘enthusiasm’ doesn’t begin with an ‘e.’” Those were simpler times. Gruden’s pep talk looms large over this editorial page at the close of 2020 as another “e” word packs images of strategic play calling, team work and smash-mouth competition. That “e” word is “eCommerce.” In the past couple days (as I type), the world’s largest home improvement retailer described an 80% increase in “sales leveraging the Home Depot’s digital platforms.” At Lowe’s, CEO Marvin Ellison pointed to an increase in sales at Lowes.com of 106%. Also, Acehardware.com’s quarterly sales increased 221%. Now do we have your attention? Let’s leave Amazon aside for another day, and get to the meat of this limited, 400-word essay: eCommerce is a huge story. So, what are the rules of success for the independent hardware and building supply dealer in this environment. Based on a series of interviews with retailers and experts, HBSDealer has compiled the following approach. Coach Gruden would call it the “Three E’s.” Be Entrepreneurial. Off-the-rack solutions might lead to eCommerce success. Maybe. But successful e-tailers always seem to have a

Ken Clark Editor in Chief

trial-and-error approach in their background. They look at their business with an open mind, embrace new ideas and continue to try new approaches. Be Efficient. It’s safe to say that very few independents have the ability to hire away office rooms of engineers and programmers from Silicon Valley giants. They have to be smart in their approach. Dealers are well advised to lean on the work of their buying groups or co-ops, where eCommerce solutions have taken on elevated importance and urgency. Sharing best practices is the best path to efficient operations. Be (E)nspirational. Your business is unique. Your website should be unique. The advantage of independents in the brick and mortar world – friendly, local, knowledgeable – need to translate to the dealer’s digital platform, (e)nspiring loyalty and generating new customers. Jon Gruden probably received low five figures for telling his “Four Es” story at the International Builders Show. But we’re giving you our “Three Es” here for free. More importantly, HBSDealer is hammering on the topic of eCommerce on our website with a series of free webinars. You can check them out at HBSDealer.com/webinars. HBSD

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

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 AUDIENCE

LIST RENTAL MeritDirect Marie Briganti 914-309-3378 SUBSCRIBER SERVICES/CUSTOMER CARE TOLL-FREE: 1-877-687-7321 FAX: 1-888-520-3608 contact@hbsdealer.com PRODUCTION/ART

VICE PRESIDENT, PRODUCTION Derek Estey destey@ensembleiq.com, 877-687-7321 DIRECTOR OF PRODUCTION Michael Kimpton mkimpton@ensembleiq.com, 647-557-5075 CREATIVE DIRECTOR Colette Magliaro cmagliaro@ensembleiq.com ART DIRECTOR Bill Antkowiak bantkowiak@ensembleiq.com PRODEALER INDUSTRY SUMMIT OCT. 7TH TO 9TH, SAN ANTONIO, TX WWW.PRODEALER.COM IN PARTNERSHIP WITH THE NLBMDA, WWW.DEALER.ORG CONTACT: AMY PLATTER GRANT agrant@ensembleiq.com, PDIS DIRECTOR OF SPONSORSHIPS PERMISSIONS: NO PART OF THIS PUBLICATION MAY BE REPRODUCED OR TRANSMITTED IN ANY FORM OR BY ANY MEANS, ELECTRONIC OR MECHANICAL, INCLUDING PHOTOCOPY, RECORDING, OR INFORMATION STORAGE AND RETRIEVAL SYSTEM, WITHOUT PERMISSION IN WRITING FROM THE PUBLISHER. FOR REPRINTS, PERMISSIONS AND LICENSING, PLEASE CONTACT WRIGHT’S MEDIA AT ENSEMBLEIQ@WRIGHTSMEDIA.COM OR (877) 652-5295.

CORPORATE OFFICERS CHIEF EXECUTIVE OFFICER Jennifer Litterick CHIEF FINANCIAL OFFICER Jane Volland CHIEF INNOVATION OFFICER Tanner Van Dusen CHIEF HUMAN RESOURCES OFFICER Ann Jadown EXECUTIVE VICE PRESIDENT, EVENTS & CONFERENCES Ed Several SENIOR VICE PRESIDENT, CONTENT Joe Territo

connect with us

HBSDealer.com

Charlotte Pipe. The brand customers ask for by name.

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NEWS + ANALYSIS

HD Supply comes home In an $8 billion deal, HD Supply is coming back to The Home Depot. The world’s largest home improvement retailer is buying HD Supply Holdings, Inc., the national distributor of maintenance, repair and operations (MRO) products in the multifamily and hospitality end markets. HD Supply’s connection to The Home Depot goes well beyond the “H.D.” initials. It’s been 13 years since Home Depot, under then CEO Frank Blake, sold HD Supply to a group of private equity firms. The current CEO of HD Supply is Joe DeAngelo, who served as executive vice president and COO of the Home Depot from January through August of 2007. The news followed shortly after Home Depot’s home-center rival Lowe’s denied reports that it was in talks to acquire Atlanta-based HD Supply. The news also follows an announcement earlier this year of the sale of HD Supply’s heavy duty White Cap concrete and construction division for $2.9 billion. Under the terms of the agreement announced Monday, The Home Depot, will pay about $8 billion. A wholly-owned subsidiary will tender $56 per share in cash to acquire all of the outstanding shares of HD Supply common stock. For The Home Depot, the move bolsters its position in the MRO marketplace. “The MRO customer is highly valued by The Home Depot, and this acquisition will position the

Product Knowledge Product: STIHL GTA 26 garden pruner Manufacturer: STIHL USA, headquarters in Virginia Beach, Va.

Home Depot expects to close the deal in its fourth fiscal quarter.

company to accelerate sales growth by better serving both existing and new customers in a highly fragmented $55 billion marketplace,” said Craig Menear, chairman and CEO of The Home Depot. “HD Supply complements our existing MRO business with a robust product offering and value-added service capabilities, an experienced salesforce that enhances the strong team we have in place, as well as an extensive, MRO-specific distribution network throughout the U.S. and Canada.” The deal is expected to be completed in the retailer’s fourth quarter. “We’re thrilled that our associates are joining the Home Depot team and that our customers will be able to benefit from a broader product assortment, expanded delivery options and enhanced services nationally,” said HD Supply’s DeAngelo. “We are confident that this will position both The Home Depot and HD Supply for continued growth and success in the MRO distribution space.”

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

Knowledge: Coming in Spring 2021, and described as the first battery-powered garden pruner of its kind in the U.S. Market, the GTA 26 garden pruner looks like a small chain saw. In fact, it is a small chain saw, with a 4-inch guide bar and a chain speed of 26.3 feet per second. With a run time of up to 25 minutes, the handy, versatile 2.7-lb. tool is part on an expanding AS batterypowered garden tool line. Fun fact: STIHL supports the work of the International Society of Arboriculture. According to its website, the ISA fosters “a greater awareness of the benefits of trees.”

HBSDealer.com

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NEWS + ANALYSIS

At 84 Lumber, a milestone and momentum At 84 Lumber, the company reached a milestone that Chief Operating Officer Frank Cicero equates to winning the Super Bowl — crossing the $4 billion sales mark. “I think our associates really feel that way today,” Cicero told HBSDealer. “There is real pride in how everyone has worked toward that goal.” The Eighty-Four, Pa.-based pro dealer finished 2019 with sales of about $3.8 billion, and the privately held company expects to hit nearly $4.5 billion for the full year 2020. Cicero, who has been with the company for 37 years, describes the dealer’s success and new sales record

as being built upon company “momentum.” Following the Great Recession and darker days for home building between 2008 to 2011, 84 Lumber responded with a sales increase every year since 2012. “In 2017, we got back to normal and a growth spurt for store openings,” said Cicero. For instance, 84 Lumber grew its count of component plants from 4 in 2011 to 10 facilities. The company also continues to place an emphasis on greenfield openings. The company is currently in the middle of a three-year growth plan and opened manufacturing plants in the Cleveland/Columbus, Ohio

84 Lumber’s Winchester truss plant and lumber yard in Stephenson, Va.

markets; Greenville, S.C.; and Philadelphia this year. And the company is moving forward with plans to expand in Northern California; Boise, Idaho; Detroit, Michigan; and additional markets by early 2021. “We feel good about the housing industry, builder confidence is very high,” Cicero says. “If our customers are very positive, we are able to grow with them.”

Green light for Recall knocks for Ring super merger Builders FirstSource and BMC have cleared preliminary government approval for a proposed super merger. The pair of lumber and building material distributors announced the early termination of the waiting period under the HartScott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The two companies also shared analysis of combined sales for the past 12 months: $11.7 billion, with sales accelerating 14.5% in the third quarter. In the same memo, the BFS Integration Team added: “This merger is about growth – expanding our geographic reach in a highly fragmented industry, enhancing our value-added offerings, and allowing our people to grow their careers. If we do all that, the rest will take care of itself.”

The second generation Ring Video Doorbell is being recalled, a move affecting some 350,000 units. The smart home product allows home owners to see who’s at the door, and it features two-way talk. According to the Consumer Product Safety Commission, The video doorbell’s battery can overheat when the incorrect screws are used for installation, posing fire and burn hazards. CPSC posted the recall on Nov. 10. This recall involves Ring Video Doorbell (2nd Generation), model number 5UM5E5 smart doorbell cameras. Only Ring Video Doorbell (2nd Generation) models with certain serial numbers are included in the recall. In early 2018, Amazon spent a reported one billion dollars for Ring, the smart doorbell manufacturer from Santa Monica, Calif. The vast majority of the recalled doorbells were sold in the U.S. About 8,700 were sold in Canada.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

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Do it Best has four game-changing features to help you meet the needs and expectations of your customers, including same day in-store pickup, member-sourced inventory, enhanced curbside pickup, and the all new Pick N Pack app to help your associates manage online order notification, retrieval and fulfillment. Do it Best ecommerce gives you the tools you need to reach your customers wherever they are and bring them to exactly where you want them to be — your growing business.

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INDEPENDENT PROFILE

Spahn & Rose adjusts and overcomes Multiple challenges in 2020 provide the Iowa dealer with the opportunity to emerge stronger. By Andy Carlo

n August storm carrying winds in excess of 100 miles per hour destroyed 14 million acres of corn and soybean crops in Iowa while leaving nearly 600,000 without power. That major storm combined with the COVID-19 outbreak delivered a one-two punch to Spahn & Rose, but the dealer was ready to assist with the rebuilding effort as quickly as the storm passed. Dave Davis, president and CEO of the Dubuque, Iowa-based pro dealer and home center chain, says his takeaways from 2020 and the COVID-19 crisis are “pretty basic.” “If you don’t adjust, you won’t survive,” he says. “Learn, adapt, and implement.” At the same time, the pandemic provided Spahn & Rose with an opportunity to realize a deeper value in its associates. “If you don’t genuinely value your employees, you won’t survive,” Davis explains. “We’ve had to adjust on the fly. We’ve had to be flexible with our employees and understand as best we can, that this pandemic has complicated everyone’s life. In my opinion, we are a stronger, bettermanaged company today than we were in 2019.” In 2020, Spahn & Rose adjusted its work from home policy in light of closed schools and child care centers. At the same time, the company leveraged technology while

Spahn & Rose overcame obstacles in 2020 while improving its virtual capabilities.

updating video conferencing and virtual capabilities Despite the challenges of 2020, the high level of service provided by Spahn & Rose didn’t diminish. “We want to service our customers in the way they want to be served, and that increasingly includes offering them digital options all along the way,” Davis says. For instance, given the reluctance of people to attend in-person tours of homes, Spahn & Rose supported its contractor customers by hosting webbased tours of homes on Spahnandrose. com. This includes complete walkthrough tours of new homes. The dealer also allowed customers to schedule and interact with its designers virtually, which proved to be extremely successful. Additionally, the company’s website was relaunched this year to make it

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

more e-commerce friendly. “The voice of our customer is vitally important to us and we’re investing more heavily than we ever have before to find out exactly what is important to our customers, and how we can provide it,” Davis says. Spahn & Rose operates 24 locations in Iowa, Wisconsin, and Illinois. The company has been growing organically, as well as through the acquisition of profitable companies that support its strategic direction and share core values. Davis describes the company as financially conservative. That includes how the dealer handled unprecedented swings in commodity pricing. In regard to the scarcity of lumber and building materials, the company became more aggressive in looking for loads and finding suppliers with product. “Our purchasing team was aggressive this year, and it paid off,” Davis notes. Sales remain solid in 2020. The residential and light commercial building markets that Spahn & Rose services have been driven by low-interest rates and low unemployment. While the dealer doesn’t have a crystal ball, Davis said that Span & Rose is budgeting for continued growth through constant, continuous operational improvements, an aggressive sales team, and a strong Midwestern economy. “Our goal is to provide our customers with the products and services they need to be efficient and profitable,” Davis says. “Our sales remain strong. We’re investing heavily to increase market share and have become more deliberate about how we structure and prepare our sales organization.”

HBSDealer.com

EVERYONE WITH OR WITHOUT FUR IS SEEKING OUT THE BEST. 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.

YellaWood® brand pressure treated pine is sought after by all the best builders, especially those with leather tails, buck teeth and nature’s highest building standards. Our proven reputation for having high quality products drives demand for the Yella Tag. The ﬁve-star service and unrivaled support of the YellaWood® brand puts dealers in position to meet their customer’s speciﬁc needs. See how the YellaWood® brand delivers at YellaWood.com.

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

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.

COVER FEATURE

TOP WOMEN

ADVANCING THE CAUSE OF

Speak up. Lead by example. Fight the unconscious bias. By Ken Clark

Those were among the calls to action emphasized during a three-day virtual event designed to celebrate Top Women in Hardware & Building Supply and explore ways to advance the careers of all women. Leaders from manufacturers, retailers, independents, distributors, lumberyards and hardware stores contributed to the cause during a series of panel discussions and presentations. Sarah Alter, the CEO of the Network for Executive Women set the tone with a call to arms in the crusade for diversity by pointing to statistics (a McKinsey & Co. study) showing that gains of women toward equity progress have been taken measurable steps backward during the pandemic. “Now more than ever, we need to do all that we can to celebrate and cherish and support female leaders in any of the industries,” she said. Our panelists rose to the challenge. No one is claiming mission accomplished, but the experience, passion and leadership brought to the forefront during those sessions represents a movement that has no signs of slowing. And it’s a movement designed to lift not just women professionals, but the entire industry. Here are some of the highlight comments (slightly edited) from our Top Women event:

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

On what it takes for women to succeed in LBM

Jean Fahy Division manager for building materials

Do it Best Corp.

The easy answer is that it would be the same traits for a successful man in this environment. But one thing I will say is that women need to trust their instinct and be really clear about what their strengths are. Just like probably everybody else on this panel, there are times when I’m the only woman in the room. And in those situations, I just really encourage women to trust themselves, and voice their opinion. Take on a project, raise your hand, get a mentor, and get an advocate. Find somebody to help you get to the next level and be coachable. And look for your leadership to welcome diversity of ideas — because those things will make us stronger and better.

On building a safe, fair working environment

On measuring and improving

Margi Vagell

Gina Schaefer

GMM and SVP Merchandising

Owner

When I think about diversity and inclusion, we are very, very much committed to fostering an environment where all individuals feel safe, they’re treated fairly, they feel highly valued, and upmost of respect. And I know that it can sound like everyone speaks this way, but I’ve been part of organizations where it just wasn’t that way. I can cite an example back in the fashion industry where I projected a thought or an opinion because it was my job to make sure that we made enough dollars per square inch of each catalog page, and I was told that my opinion didn’t matter. It was one of those reflective moments that you look back on your career and tell yourself that you’ll never be that person. No matter the level, no matter the pay grade, no matter even where they come from, you’ve got to be able to listen to everyone in the room. On another point: I have found that In my life, when I have a healthy life outside of work, then I’m actually far more productive and a better leader, and a better person, inside of work. We know that people want to be able to make it to their son’s school conference or their daughter’s soccer game. You want to be able to make it home for dinner with your husband, or with your wife, or with your significant other. Those types of things are very important. And I think that when it comes to being a leader, we play a really important role in not just leading by example, but also making sure that our teams are enabled to fell that way. And we shouldn’t feel bad about it.

Regardless of how our business grew organically with a woman as owner and CEO, we needed to make sure that we were being equitable across the board. We need to know if we are demonstrating unconscious bias tendencies when we hire, when we promote, when we provide raises and so on. So we started tracking what those metrics look like. That’s not a new concept: What’s measured gets monitored — and improved, if you’re doing it appropriately. Sometimes, though, a small business won’t give this type of audit as much weight as I think it should get. (And even at 13 stores, we’re a small business all things considered.) And so we started tracking who we’re hiring, how we’re paying, what the wage gap is. Do we have a wage gap? Surprisingly, the first year we did it, we actually found out that we were equitable across the board. I was grateful because I really didn’t know, and I was a little nervous. So, now we have a chance throughout the leadership team and the associate base to track how many males and females we have in various roles, how many folks of color we have, what our age gaps are. Now we can work with the management teams to make sure that we’re addressing any concerns that we might have. We see all of those things as opportunities, especially because our markets are so diverse. But just taking the steps to measure doesn’t get us anywhere if we don’t then transparently talk about it.

Lowe’s

HBSDealer.com

A Few Cool Hardware Stores

HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 2020

COVER FEATURE On recruiting and mentoring

Karen Meredith Director of LBM Sales

Orgill

I started in sales in LBM. I was actually the first woman in LBM here and the third person in LBM here overall. I agree with the idea of advocating for your team. When I’ve had openings for traders or building materials specialists, we get all kinds of applications. And one day I thought, ‘Wait a minute, I’m going to walk through this building because there are some pretty fantastic people in this building.’ And that’s how I hired several of our team. And they have included females. They weren’t originally lumber and building material people. Maybe they were in credit, maybe they were in customer service, whatever. But I knew their personality and their drive to work, and I just thought, “You know what? I ought to give this person a shot.” And it truly worked out. Also, I like to say: If you’re the only woman in the room, there’s a reason you’re there. You’re important. I mean, you weren’t invited to decorate the room. You weren’t. You’re important. And you should feel that way.

On career opportunities

Amy Smiley VP of Marketing

84 Lumber

“I would say there’s a lot of opportunity. I’m lucky to be part of a company and an industry that are growing and expanding. 84 Lumber’s opening new locations. This industry’s booming, it’s on fire right now. And as a woman, I think that we have an opportunity to help shape not only the future of 84 using our voices, but also the culture of the industry. I’ve also found that this job and this industry are never boring. Some of the people that I’ve met over the past few years are some of the best people I’ve ever met, and they’re also the most interesting people I’ve ever met. So it’s a good opportunity to expand your network, maybe get outside your comfort zone. When I came into this industry, I didn’t know very much about lumber and building material. And that’s OK. It’s an opportunity to learn and to grow, and I think it’s really exciting and full of opportunity.

Advice to women

On the meaning of ‘diversity’

Kim Scochin

Teesee Murray

GAF

Epicor Software

Channel Marketing Manager

VP of Retail

I would say always stay positive. I know sometimes, especially these days, it’s a little hard to stay positive, but always remember if we practice empathetic listening and have great habits of successful leaders, I feel we can accomplish it. We can showcase ourselves.

“It’s age, it’s gender, it’s race. Diversity inclusiveness is part of all of us to encourage and facilitate. And I think the hard lines industry is better for it.”

The presentations from the 2020 Top Women in Hardware & Building Supply event are available for replay at HBSDealer.com/webinars.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

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COVER FEATURE

Rising TOP WOMEN Stars THE 2020 CLASS OF

IN HARDWARE & BUILDING SUPPLY By Ken Clark

For months, HBSDealer solicited nominations from the industry for women who have demonstrated achievement, growth and success in the hardware and building supply industry. That effort culminated in a three-day virtual event with the voices of many of those leaders. “We truly believe that our 2020 Top Women in Hardware & Building Supply program serves this industry and brings people and companies together in a positive way,” said HBSDealer’s Amy Grant, who spearheaded the program. “Diversity is more than just an ideal. It’s good for business and it’s good for the industry.” One goal of the continuing program: to share ideas that could advance and promote women in the industry. Another to recognize achievement. In addition to the panelists highlighted on the previous pages, here are the honorees of the 2020 Class of Top Women in Hardware & Building Supply.

Lisa Anderson

Manager Handy Ace Hardware Tucker, Ga. From hiring to buying, sales to inventory control, marketing to advertising, trade shows to special events, if you need the right answer at Handy Ace Hardware, you “ask Lisa” She joined the company right out of high school, and has acquired a mastery of all phases of the hardware business. Operating out of the new 33,000 square foot flagship location in Tucker, Ga., her management duties bring her to all three company locations in the greater Atlanta market.

Angela Seaborn Director of HR Operations 84 Lumber Eighty-Four, Pa. As the Director of HR Operations, her primary responsibilities include developing and implementing 84 Lumber’s HR strategy in support of overall business objectives. This specifically includes executing and administering the company’s benefits, wellness, compensation and compliance, payroll functions, and managing the company’s HR Information Systems. Angela’s work directly impacts the business and touches each of the 5,700-plus associates across 250plus 84 Lumber locations.

Crystal Pieschel Director of Marketing Mid-Cape Home Centers South Dennis, Mass.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

Dakota Docheff-Cordle

Contractor Sales, Home Decor Northwest Ranch Supply, Inc. Kremmling, Colo. In 2014, at just 20 years old, Dakota started a career in hardware & building supply. A growing list of responsibilities began to show her strengths in leadership and team building, quickly rising through the ranks to Store Manager. She also manages key facets of the business including digital advertising, in-store promotions and inventory management. She is involved in a rapidly growing Contractor Sales/Home Décor department, and is excited to see the team grow in a positive direction and looks forward to future years in the building supply industry.

Lauren Arterburn Manager, Back Office/ Inventory, Advertising, Community Events, Training Pinnacle Peak Ace Hardware Scottsdale, Ariz. Growing up in the business, she worked in her parents Ace Hardware store since she was 10. “I always knew it would be my career path.” Lauren has worked in every position, from cashiering, to paint, to business to business, to accounts receivable/ payable, and more. “I love every aspect of helping my community during times of need, especially during the COVID-19 pandemic,” she said.

Leslie Bird

CFO, Secretary/ Treasurer George Kellett & Sons New Orleans, La. A 30-year veteran of the family lumber business. Bird started work right out of high school. “We pride ourselves with the most qualified, friendly and knowledgeable staff around. I have three boys — my oldest is already working in the family business alongside my dad, brother and myself. My journey has been one that I would not trade for anything!”

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COVER FEATURE

Linda Tait

GM Measuring Tools North America Robert Bosch Tool Corporation Mount Prospect, Ill. In 2015, she joined Robert Bosch Tool Corp and quickly began climbing the corporate ladder. Linda currently holds the position of Director of Measuring Tools, North America. Throughout her career, Linda has worked with several strong female leaders that have inspired her and she hopes she, too, can encourage and motivate other women in this industry.

Lynley Oakes

Inside Sales Decks & Docks Lumber Company Clearwater, Fla. Oakes worked in marine construction for three years as a dock builder, while doing woodwork and small furniture on the side. That was excellent preparation for her position as Decks & Docks Lumber Company. “For years, I worked in offices doing clerical work and never felt satisfied,” she said. “Growing up, I was told I could be a teacher, nurse, etc. Carpenter was never presented as an option. I finally found my passion in construction and I couldn’t be happier.” Her advice for how to be taken seriously in a male-dominated industry? “Keep up and show up.”

Robin Smith

Co-owner Petersburg Do it Best Hardware Petersburg, Ind. Like many children of store owners, Smith developed her retail hardware knowledge by working in the store after school and during breaks. Her core responsibilities include managing the financials, merchandising, marketing, and special events planning. Robin holds a BS in Accounting from Indiana State University and recently completed the NHPA Retail Management Certification Program.

Summer Labrado

Sales Support Ashby Lumber Berkely, Calif. This 24 year-old Californian was new to the building industry three years ago and today looks forward to continuing her career in the building industry. “I’m most passionate about helping my team create new business and servicing lasting relationships with contractors and home builders,” she said.

Minette Agnew General Manager PC Home Center New Albany, Ind.

Jeannie Douglas Warehouse and Display Manager Duncan Builders Supply Duncan, Okla.

Jackie Knight

Owner Hometown Hardware Gouldsboro, Pa.

Lauren Knight Rosensweet

Business Excellence Margaret Connelly CEO SI Windows Tucson, Ariz.

Angelia McGraw Residential Sales Specialist Hager Companies South Yarmouth, Mass.

Angie Sheehan President of North America WernerCo Itasca, Ill. As President or WernerCo since November 2018, Sheehan has led the transformation of the North America business with a focus on new product innovation and developing a high-performance, results-driven culture.

Bethany Doss Business Manager Capital Lumber Healdsburg, Calif.

Cally Fromme

Co-Owner Hometown Hardware Gouldsboro, Pa. Lauren Rosensweet is co-owner of Hometown Hardware alongside her mother, Jackie Knight. The favorite part of her day is spending time with customers and being able to hear their special stories that they share with her. At times it is difficult trying to assist customers who are apprehensive about dealing with a young businesswoman, especially in a male-dominated field. “Sometimes they are reluctant to hear my remedy on how to fix something, but are soon assured I am knowledgeable in my area of business,” she said.

Vice President Corporate Relations Kodiak Building Partners Highlands Ranch, Colo. Fromme took on a leadership post with Kodiak after it acquired Victoria, Texas-based Zarsky Lumber, of which she was president and CEO. Her many roles as a volunteer for the National Lumber and Building Material Dealers Association include serving as chair in 2011. She has also worked closely with Texas and national legislators to support the building products distribution industry.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

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COVER FEATURE Carolyn Thompson

Owner Win-Car Hardware Everglades City, Fla.

Chanda Leffler Director of Fasteners Metabo HPT Braselton, Ga.

Cindy Chatell

Sr. Channel Marketing Manager Teknor Apex Company Pawtucket, R.I.

Debbie Armbrust Controller Millard Lumber Inc. Omaha, Neb. A part of Millard Lumber since 1981 and controller at Millard Lumber for the past two decades, “I treasure the professional relationships I have made over the years and especially the ones I can call friends. Each of them has helped me be the person I am today.”

Debbie Zajac Director of Operations H2 Brands Group Freeport, Ill. In 2019, Debbie was promoted to the Director of Operations of H2 Brands Group’s Freeport, Ill. Distribution Center, where she brings a passion for coaching and mentoring staff and future leaders in the distribution group.

Debby Straight VP CFO Ward Lumber Jay, N.Y.

Donna Millison

Trader Lumbermens Merchandising Corporation Wayne, Pa.

Heidi McDonald

President & General ManagerDeering Lumber Biddeford, Maine McDonald has spent her entire career in the building supply industry “and I have enjoyed every step of the way,” she said. She began with Deering in 2003, overseeing a variety of business functions. She was named president in 2020. “I am hoping in my new role that I will have more opportunities to inspire other women to seek a career in this fun and exciting industry.”

Jeanine Gaffke Chief Marketing Officer AZEK Building Products Chicago, Ill. In her first year, Jeanine added staff to expand internal capabilities, led a rebrand program, led creation of a national omni-channel advertising campaign with a new advertising agency—including spots run during the 2018 Super Bowl—and orchestrated a new retail placement program. Also, she is an active supporter of improving prenatal and mental support leave for parents with children in a Neonatal Intensive Care Unit (NICU).

Kristen Baalmann

Lainie Sleppin

Strategic Sales Manager MoistureShield It’s rare to find a building products dealer or contractor who doesn’t know Lainie Sleppin in NY/NJ/PA metro markets. Sleppin has worked in every step of the channel—in manufacturer sales, lead generation, distribution and sales training. An active member of the North American Deck & Railing Association (NADRA), her achievements include advancing the composite deck market.

Laurie Luitgaarden

Owner Wexford Ace Hardware Wexford, Pa. In 2007, Laurie Luitgaarden and her husband knew exactly what their neighborhood needed: a community hardware store. As the owner of Wexford Ace Hardware, she has spent the last 13 years creating a space where you can not only get your everyday necessities, but feel a sense of home and community.

Linda S. Johnson President Village True Value Hardware Western Springs Ill.

Lou Ann Oberschlake Owner Village Hardware Bethel, Ohio

CFO, IT Specialist, HR B & B Lumber Wichita, Kan.

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COVER FEATURE

Maggy Schwab

National Account Director-Direct 2 Step SRS Distribution McKinney, Texas Maggy began her career selling fiberglass insulation to lumberyards and home centers. “I had no clue what the product was or how it was used,” she said. “However, I quickly learned the love of this industry.” Her 20-year career was bolstered by strong industry mentors who instilled in her “the value of strong relationships, doing what you say you are going to do, integrity, hustle, persistence, and of course a little sense of humor along the way.”

Margie Kaitz Seligman Co- CEO National Lumber Co. Mansfield, Mass. On behalf of her Massachusetts-based company, Seligman accepted the 2020 ProDealer of the Year Award during the ProDealer Industry Summit. “We, and all the employees of National Lumber, have a sense of responsibility and a lot of pride in continuing a 87-year legacy started by our immigrant grandfather, Morris.

Megan Mazur

Vice President of Sales, Marketing & Customer Care Kitchen Cabinet Distributors Raleigh, N.C. With 20 years of experience, Megan is a passionate and driven executive in building products. In four years, she has led strategic sales and marketing efforts, establishing Kitchen Cabinet Distributors one of the fastest-growing and most-respected cabinet companies in the industry.

Robbie Caudill

Senior Corporate Procurement Manager LP Building Solutions Nashville, Tenn. Her advice to other women: “Come to the table prepared. Don’t be afraid to ask a question or speak up. And if you believe in what you’re saying and you’re grounded in doing the right thing, don’t back down.”

Sherry Foster

Inside Sales Specialist Cedar Siding Inc. Rochelle, Ill. Foster began her career at Cedar Siding in order entry. Twenty-two years later, she now manages the inside sales team. “I have enjoyed learning all the various aspects of the building industry,” she said. “It always puts a smile on my face to hear that you’re so helpful and knowledgeable.”

Stefanie Couch

Regional Millwork Marketing Manager Boise Cascade Dallas, Texas Couch grew up in Georgia working for her father’s small independent lumber yard. Over the last nine years, Stefanie has worked to develop and grow the Millwork division of Boise Cascade’s distribution business. Today she works with eight millwork locations leading sales, marketing and development projects as well as training, vendor relations, growth strategy and innovation.

Wendy Whiteash Chief Human Resources Officer and Executive VP of Culture US LBM

Sharon Moen

Purchasing and Inventory Tri State Building Center Sisseton, S.D.

Merrilee Slawson

Director of Sales Process and Improvement Empire Moulding and Millwork Grand Rapids, Mich.

Libby Zappala President Delaney Hardware Chico, Calif.

Linda Cottin

Owner Cottins True Value Hardware Lawrence, Kan.

Jenny Burroughs

General Manager, Great Lakes zone PPG Pittsburgh, Pa. Appointed to her new post in October 2020, Burroughs is responsible for the sales and operations of 120 PPG Paints stores throughout the Pittsburgh, Ohio, Indiana, Michigan, Louisville, Chicago, Minneapolis and Buffalo markets. She previously served as director, product management, paint.

Kellie S. Cambell

Vice President Communication & Analytics Masco Corp. Livonia, Mich.

Iva Due

District manager TH Rogers Lumber Co. Edmond, Okla.

Elise Houle

President Pepin Lumber Woonsocket, R.I.

Sarah McKee Technology Director The Home Depot Atlanta, Ga.

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MARKET INSIGHTS

Top economists shared their positive outlooks for 2021 From the ProDealer Industry Summit, forecasts for growth. By Andy Carlo

hat’s ahead for residential and construction in the COVID-19 era looks to be optimistic. National Association of Home Builders NAHB) Chief Economist Robert Dietz provided an uplifting outlook in regard to the near-term future of housing during the 2020 ProDealer Industry Summit. Dietz forecasts that single-family starts will rise 6% in 2020 and close to 950,000. This is a notable improvement

over previous expectations but still below the 1.1 million starts needed to keep up with demand, according to NAHB estimates. The projections are a big upswing from what the NAHB was predicting a few months ago. The NAHB/Wells Fargo Housing Market Index (HIM) reached 90 in November, which is a five-point increase over October and a data series high. In contrast, the HMI had a reading of 30 in April as the COVID-19 crisis

Single-Family Starts

Choppy conditions ahead but a growth trend continues 2,000 1,800 1,600

heightened. “Confidence now is almost off the charts,” Dietz said. High builder confidence is stemming from heavy buyer traffic, a lack of existing inventory, pent-up demand, and sales from homes that have yet to be started. In the meantime, the median new home will grow in size as more people use their homes for added purposes, including home office space. Citing Google Trends data,

Year

Units

Percent Change

2017

851,000

2018

872,000

2019

893,000

2020

947,000

2021

971,000

2022

993,000

1,400 1,200 80% Fall 1,000 800 600 400

Through to Current: Mar 09 = 353,000 Jul 20 = 940,000 +166%

200 0

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22

Source: U.S. Census Bureau (BOC) and NAHB forecast

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

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Dietz also noted that people want more room for pets as adoptions have increased during the pandemic. Dietz forecasts single-family housing growth of 3% in 2021 and 2% in 2022. Single-family rental, which is only about 4% to 5% of the overall market, is expected to see gains as well and presents another opportunity for growth. The economist forecasts 4% remodeling growth for 2020 followed by increases of 3% in 2021 and 2% in 2022. “Remodeling has clearly been a bright spot in housing,” Dietz said. The latest set of forecasts from the NAHB is far removed from where the U.S. economy toppled to in the spring. The second quarter of 2020 proved to be one of the worst periods of the economy since World War II due to government mandated shutdowns in response to the pandemic. The end result was a negative 30% growth rate for the quarter. Dietz has revised his GDP growth rate for the third quarter to a 25% increase, noting some estimates place it at 30%. Overall, Dietz said that it could take until 2022 to overcome “the Great Disruption.” “This was a real artificial downturn,” Dietz says. More positive news is the near $400 billion projected to be spent on building materials next year. This includes a big shift toward singlefamily home construction spending with total growth at about 10%. John Burns, CEO of John Burns Real Estate Consulting, delivered the forecast at the summit and said about 25% of next year’s growth will be spending on single-family home construction materials. This year took a big hit due to the cycle time of home construction being delayed by the pandemic. “And that cycle time is going to result in a big-time boom next year,” Burns says.

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Part of Burns’s overall spending forecast includes a surge in building materials spending due to the number of homes that were built in the early 2000s, soon approaching the age of 15 to 20 years old, and due for remodeling projects. About 46.4 million homes were ready for a remodel in 2015 with about 48.6 million due in 2020. But looking ahead to 2022, more than 51 million homes will require updates and upgrades. “All of that (building) boom from 20 years ago should result in strong repair and remodeling,” Burns says. Burns is projecting big project remodeling to fall 2% next year but rise 8% in 2022. Single-family homes under homeownership should rise 3% next year, however, with the falloff occurring in rental homes. Looking ahead, Burns said repair and remodeling spending should grow by about 6% in 2021. Multifamily spending will be a drag on spending, though. Pointing to August indicators, multifamily permits were down 14% as starts declined 3% on a month-over-month basis. In contrast, single-family permits rose 6% as starts increased by 4% in August. Custom home builder orders are strong, Burns said, as multifamily construction declines. Burns notes that his firm was already forecasting a multifamily decline due to previous overbuilding in past decades. Another bright spot for residential construction and remodeling is who is

unemployed and who is still working. “Generally, people who are well qualified and collegeeducated are doing better,” Burns said. According to Burns, the current unemployment rate is understated because 3.9 million people between the ages of 24 and 69 have dropped out of the labor force. Burns said he believes many are staying home due to homeschooling children during the pandemic and will return to the workforce eventually. And while most job losses have been temporary, from 1.4 million near the start of the year to 26 million in April, permanent job losses are about 2.5 million, according to Burns. Roughly 6.8 million workers lost their jobs during the Great Recession compared to about 3.8 million as a result of the pandemic. Permanent unemployment peaked at 10.5% during the Great Recession with that figure standing at 6.1% now. But job losses have been concentrated in lowerincome brackets, which have the least impact on home builders, Burns noted. In the meantime, money is flowing into single-family rental construction. “Rental (home) growth around the country isn’t falling anywhere, unlike apartments,” Burns said. American Homes For Rent is building at least 1,500 homes per year and is now the 40th largest home builder in the country. Burns said that the home rental market is “no longer an existing-home game, it’s a new home game.” Among current building materials categories, Burns said that “the decking industry is on fire” because consumers are spending money on quality composite decking as they remain in their homes longer. Other strong categories including lumber, HVAC, lawn and garden, and roofing products.

HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 2020

FASTENER TRENDS

Fast-forward with fastener trends Innovation fuels growth for a $15 billion plus category. By Ken Ryan

he U.S. fastener market, with applications across all segments of the hardware and building supply industry, is expected to grow 2.6% annually to $15.2 billion in 2020, according to the Industrial Fasteners Institute. While sustained growth has been tempered somewhat by the increasing cost of raw materials due to tariffs on steel and aluminum, the fastener segment continues to flourish despite an ongoing shortage of skilled workers, the coronavirus pandemic and global competition. Among the trends industry observers are seeing: a slight shift to American-made products; time-saving measures used in the composition of fasteners; and a rise in cordless pneumatic tools, which appeals to a younger generation

for one-handed installation rather than holding the screw in one hand and the drill in the other,” said Laramy Cooper, senior category manager of building products for Orgill. Multi-material screws. These screws provide versatile solutions for multiple materials including wood, concrete and masonry. Thread/serrated edges. “Everyone has a little different specialty element in their design, but the goal is to allow the fastener to bite into the wood, reduce the mushrooming at the insertion point and to pull the displaced material out from the hole for better hold,” said Cindy Hixson, merchandise manager — hardware, Do it Best Corp.

Trends in fasteners are being driven by technology and recent innovations in fastening tools, particularly nailers and structural screws. Some examples: Structural screws and lag screws. These screws are designed to bear more weight load in exterior or interior applications and are designed for an easier, more efficient install with no need for pre-drilling—unlike the traditional hex bolt installation. Star drive (Torx) heads. Star heads increase the contact between the bit and the head of the screw providing a better hold of the screw. “In many cases, the new star drive head allows

FastenMaster’s ThruLOK system brings time-saving efficiency to the job site.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

Stainless steel fasteners for exterior projects. It costs slightly more, experts say, but using a stainless-steel fastener solves several issues faced by contractors. Notably, stainless steel provides weatherability against the elements, guards against corrosion, and promotes corrosion resistance to the ACQ (alkaline copper quaternary) treating processes used in the lumber industry today. Threading designed to move material up and out of the hole while at the same time decreasing the drive time is also trending. Design elements in the head of the screw and in the tip of the bit allow for better grip and quicker, more accurate seating of the screw—the first time. Pricing Tariffs continue to influence pricing, experts say. Many fasteners are manufactured in other countries and while suppliers have some leeway in moving production, these impacts nevertheless forced companies to pass along two or three price increases through late 2019 and early 2020. The Section 301 tariff that was implemented in the fall of 2018 on several categories of imported fasteners made domestically manufactured products more attractive to contractors and retailers. “U.S. manufacturers have been reducing their prices for retailers and distributors for years in order to compete with cheaper imports,” Cooper said. “Now that tariffs are in place and the pandemic has forced capacity constraints along with longer than expected ship dates, many domestically produced fasteners are more favorable in price — as well as lead times in getting products to us quicker.” Merchandising/Displays Over the years merchandising strategies have been evolving for the nuts and bolts category. Given the fact fasteners

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are a huge SKU investment, stores need an option that best fits their clientele and location restraints. Bin systems, spinner racks, end caps, loop videos, fresh point of purchase (POP) materials and custom planograms are critical to the success of any fastener program, experts say. “Our customers who have experienced the most success are those who have dedicated the space in their store to create a fastener destination for their local communities,” Cooper said. “We have noticed that retailers are seeing benefits from nuts and bolts suppliers who provide sophisticated bin systems with complex POP options that allow customers to selfservice while shopping their stores.”

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Brand loyalty Brand loyalty and regionality are often deciding factors when choosing to purchase specific types of fasteners. Cooper explained that on a national level, hand drive nails, staples, nuts, bolts and drywall screws are less affected by brand preference than collated fasteners — the types of nails connected together in strips for use in a nail gun. Certain types of collation are preferred in different regions of the country. Cooper said customers typically make their buying decisions based on the manufacturer or brand known for being superior within the category. For example, the Orgill category manager described the Midwest as a market where paper tape collation is most popular. The West Coast, he said, is more of a plasticstrip collation market. Wire weld-collation is huge in the Northeast. The rest of the country has a blended approach, he said, adding: “In the decking-construction screw category, there is a desire to use premium fasteners.” In the competitive field, many brands say they build their reputation on the job site, one project at a time.

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MARKET INSIGHTS

Pressure from treated lumber Shortages and high price points cause disruption in pressure treated lumber dynamics. By Andy Carlo

ressure treated lumber was both a blessing and thorn in the side of pro dealers in 2020. COVID-19 regional lockdowns pushed DIYers to do more while stuck at home. The end result was a massive surge in demand for treated lumber. As home improvement projects took hold in the spring and summer months, including new decks, fencing and swing sets, the price of pressure treated lumber soared sky-high while overall supply became scarce at times.

But it appears that the cost of treated lumber is settling back down to lower price points in the fall season. Now it’s a question of what’s ahead for treated lumber in 2021 and how do dealers respond? In mid-April of 2020, pressure treated lumber began a ride that saw materials rise week after week until mid-September before reaching all-time-high price points. The overall cost increased by about 200% during that span.

For example, treated 2” boards reached a price level well over $1,000/ MBF (1,000 board feet) while decking hit levels as high as $2,000/MBF. Timbers also increased by as much as 175%, reaching over $1,000/MBF. Prices began to drop harder than anyone anticipated in September, however. According to Angie Maxwell, treated products manager at LBM Advantage forest products and building materials buying group, the price points prompted some dealers to allow their pressure treated supply to run out rather than being stuck with high-priced lumber as prices began to recede. “Right now, everyone has very thin inventory,” Maxwell told HBSDealer. Some of what triggered the price drop was a sizeable drop in demand. Many of the projects that might have taken place during the fall building season were already completed in summer and spring. Additionally, suppliers have been able to play catch up with inventory levels and now sit at a more comfortable position than where they were in the summer months. During the height of the price climb, suppliers weren’t in a solid position and in some cases found difficulty obtaining the chemicals needed to treat lumber. This caused dealers to not know when they would actually receive orders. And when orders were delivered, treated lumber was quickly out the door to job sites. “Multiple variables now have to be weighed by treaters and dealers alike,” said Steve Sallah, CEO of LBM Advantage. Sallah points out that existing home sales have been strong, however. That translates into repair and remodel projects including new decks. Remodelers were also impacted by lumber shortages in the third quarter 2020 saw sky-high price increases for pressure treated lumber.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

HBSDealer.com

of 2020. According to the National Association of Home Builders (NAHB) Q3 Remodeling Market Index, more than 70% of remodelers reported a lumber shortage with 25% saying there was a serious shortage. With treated lumber being problematic in 2020, composite decking manufacturers have stepped up their game while meeting market demand. “The demand for both wood and wood-alternative decking continues to increase as homeowners invest in outdoor living projects,” said Jase DeBoer, senior marketing manager at Deckorators. “As more homeowners take on DIY projects, the availability of wood has led to many considering entry-level, low-maintenance composite decking for their outdoor projects.” Deckorators embraced the opportunity by introducing Trailhead decking, an affordable entry-level decking solution that maintains many of the features builders and homeowners have come to expect from woodalternative decking, the company says. Toby Bostwick, vice president of product and brand at Fortress Building Products, said the company is seeing lumber shortages and rising prices on treated lumber drive decking and framing trends on a macro level. “For those participating at the lowend price point, traditional composite decking is getting significant play,” Bostwick says. “The boards are readily available, durable and beautiful. And with the price point between composites and wood narrowing, it’s becoming a much easier conversion for the channel.” Fortress is also seeing more contractors upsell high-end alternatives like capped PVC decking when they can’t get enough treated products. On the framing front, Fortress is seeing a growing demand for lightgauge steel. “Composite and PVC decking can now last 25 years or more, and homeowners want framing systems that can match the longevity of their

HBSDealer.com

Given the price of lumber, how likely is steel framing to emerge as an attractive alternative to wood framing in home construction?

19%

Very likely to happen

38%

It won’t happen

43%

It might happen

surface boards,” Bostwick explains. “Contractors are also tired of getting callbacks when traditional frames twist, rot or dry after just 10 years.” While steel’s price point was already starting to make sense against this backdrop, the lumber shortage has really changed the game. Pent-up project demand has brought a heightened awareness to the fact that builders don’t have to stall projects when pressure treated lumber is unavailable. Bostwick says that many builders took this opportunity to educate themselves and their customers about the merits of steel. “Now, homeowners are seeing just how beautiful the framing material can be. Contractors are also less intimidated handling the

“The demand for both wood and woodalternative decking continues to increase as homeowners invest in outdoor living projects” —Jase DeBoer, Senior Narketing Nanager, Deckorators

Source: HBSDealer Poll Question.

new material, finding steel installs similar to wood, with posts and joists.” Thanks to people’s design-oriented mindset, interest in higher-end alternative decking continues to climb with no signs of slowing down, especially considering it’s readily available. People are also spending more time outdoors and at home than ever before, so it’s no surprise that customization and durability continues to be a growing priority for homeowners renovating outdoor living spaces. “Whether customers want a curved deck, boards with variegation or the visual continuity of carrying hardwoods’ aesthetic from the indoors out, high-end alternatives like capped PVC allow for more seamless customization than pressure treated lumber,” Bostwick says. DeBoer said that Deckorators has been producing and shipping its decking products as quickly as possible due to high demand. And regarding whether the market remains hot, he says the company’s contractor customers are booked well in 2021. “If you want a new deck for next summer, you had better contact a contractor now,” DeBoer says.

HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 2020

SPECIAL REPORT

Operation: Military Influence By Ken Clark

cross the industry, the steady drumbeat of initiatives to support military service members and their families seems to sound louder each year. And each November, around Veterans Day, the drumbeat intensifies well beyond merely providing discounts at the point of sale to veterans. In Maine, there’s Hancock Lumber’s support for the Hire-a-Vet program. In Virginia, TW Perry contributes in many ways to the Yellow Ribbon Fund, assisting injured service men and women at the Walter Reed Army Medical Center. Home Depot recently announced a plan to cover mortgage payments for 500 veterans in need as part of its second annual Veterans Day Operation Surprise initiative. The list of industry programs that support the military goes on far too long for an adequate roll call of examples. But the power of these programs is partly based on the fact that companies support

Joe Hardy enlisted in the Army Air Forces in WWII. He left the service as a lieutenant, and went on to become the founder and driving force of 84 Lumber.

veterans not out of a desire for publicity, but out of a real connection to the military and a desire to do right by those who volunteer for their country. During an HBSDealer Webinar last month, 84 Lumber’s VP of Marketing Amy Smiley described its recruitment approach. ”At 84 Lumber, some of our recruiting efforts are focused around veterans because we’ve found that veterans make really great associates at our company,” she said “We have a lot of those same core values as the military.” At 84 Lumber, the company’s success most certainly leaned on values brought to business from the military by founder Joe Hardy. Similarly, Stine Lumber of Sulphur, La. — also founded by a WWII vet and a successful privately held company — owes some of its

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

J.W. Stine, backrow center, served as a B-26 pilot in WWII. After the war, he created an LBM business that eventually became Stine Lumber Co.

success to the core values of its founder J.W. Stine, and many of the core values of military service. What are those core values? HBSDealer reached out across the industry for veterans who would volunteer to describe in their words just how their military experience has influenced their business career.

HBSDealer.com

SPECIAL REPORT

Dan Berry

President Paradise Home Center Union, S.C. “Serving in the US Army as a West Point infantry officer instilled three things: attention to detail, training, and perseverance. All three translate well in serving our community as president of a family-owned home center. You have to be committed for the long haul and strive for excellence and professionalism in every area.”

John Colley

Director of purchasing Zeeland Lumber Zeeland, Mich. “I served as a United States Marine from 1988 to 1992. All the military leadership traits and principles have certainly helped me, but I was assigned to a Fleet Service Support Group at the end of Operation Desert Storm that opened my eyes to logistics. The experience really helped instill the mindsight of getting people what they need, when they need it, at a price they are willing to pay. It is not much different with building materials… except the need may be more often a want sometimes!”

Gina Workman

Employee relations manager/training and development Ace, The Helpful Hardware Company Alpharetta, Ga. “My service in the United States Navy has influenced our business and my business career, for these reasons, the passion to serve my country, the leadership experience I acquired, and the desire fueled to stand on the principles of Honor, Integrity, and Service has given me the tools to effectively lead, influence, and motivate our team and our business to achieve success and to serve our customer’s and community.”

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

Sean Norem

Manager sales and operations planning LP Building Solutions Nashville, Tenn. “I served in the United States Marine Corps in the infantry. My time as a Marine taught me many leadership lessons and principles that I will use the rest of my life. Most importantly, putting your people first and leading with your actions, not just your words. Another daily requirement was the ned to adapt to your environment and situation. No plan ever goes exactly how it is drawn up. You must be able to make swift, educated decisions depending on what is happening around you.”

Chris Yenrick

President and COO Smith Philips Building Supply Winston-Salem, N.C. “My military experience gave great opportunities and lessons in resilience, leadership, responsibility, and teamwork. I was both enlisted and an officer, the training both Basic Training and Officer Candidate School, were tough mentally and physically but developed great team environments and sense of responsibility to the team. In addition to learning people skills, my specialty as a Medical Service Corp Logistics Officer, taught me a great deal of skills in warehousing, customer service, planning, transportation, contracting, and information technology, all highly applicable to success in the building material world.”

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CO-OP REPORT

At Ace, unusual times lead to big numbers By Ken Clark These are not your normal retail and distribution conditions. And for Ace Hardware Corp., the most recent three months produced some unusual numbers. For instance:

A 221% increase in revenue at Acehardware.com;

A 28.9% increase in U.S. retail same-store sales, at the 3,300 or so Ace dealers who share data with corporate on daily retail sales;

A record high revenue figure of $2.0 billion — up 30.7% from the same quarter of 2020.

In its most recent earnings release, the company tipped its hat to the unusual environment that has given birth to these numbers across much of home improvement industry – and specifically for Ace dealers. The heightened importance of both convenience and safety, coupled with the shift in consumer discretionary spending from sectors such as travel and entertainment into home preservation, have distorted demand and driven much of the growth within Ace stores in the U.S.” the co-op said. CEO John Venhuizen described the retail environment as “very difficult and demanding for both our customers and our associates.”

the end of the third quarter, picking up a combined 11 stores compared to the same time a year ago. The Lenexa, Kan.-based Westlake Ace Hardware chain (see sidebar) experienced a 28.3% increase in same-store-sales while the Farmington Hills, Mich.-based Great Lakes Ace Hardware, Inc. chain grew same-store-sales by 40.5 percent in the quarter. For Westlake, eleven new California stores (formerly operated as Orchard Supply Hardware Stores) opened by Westlake in 2019 contributed $19.7 million of the increase in sales. Ace added 43 new Source: Ace Hardware Corp. domestic stores in the Ace Hardware Corp. also third quarter of 2020 and cancelled 22 provided insights into the stores. The Company’s total domestic performance of its two major retail store count was 4,585 at the end of holdings — Westlake Ace Hardware the third quarter of 2020 which was and Great Lakes Ace. Combined, an increase of 57 stores from the third the retailers operated 194 stores at quarter of 2019. On a worldwide basis, Ace added 46 stores in the “A 221 percent increase in our third quarter of 2020 and digital business and same-store cancelled 29, bringing the worldwide store count to sales growth of 28.9% fueled 5,403 at the end of the third record revenue and earnings quarter of 2020. in an environment that The bottom line also continues to be very difficult produced big numbers for the Oak Brook, Ill.and demanding for both our customers and our associates.” based co-op. Net income of $98.7 million was up — John Venhuizen, president and CEO 63.1% and marked a new record for Ace. The co-op also announced accrued patronage dividend to shareholders of $263.8 million, an increase of 66.9% from the first nine months of 2019. “I want to genuinely thank the Ace team for their gutsy performance,” said Venhuizen.

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

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Westlake Ace shows growth in Missouri Westlake Ace Hardware operates 115 stores around the country.

With three other St. Louis locations, Westlake Ace Hardware plans to open a fourth in the St. Peters community early next year. “We look forward to becoming part of the St. Peters community and continuing to provide a local retail hardware option for its residents,” said Joe Jeffries, president and CEO of Westlake Ace Hardware. “Most of all, we are excited

to show our new neighbors there how we live the Ace Helpful Promise every day by delivering reliable service, helpful advice, and products to help them get their projects done right.” A soft opening of the new Ace store is planned for late March 2021 at 915 Jungerman Road. The space is currently (at presstime) home to Brewer’s True Value Hardware, which is expected to close on Nov. 30. Brewer’s is currently engaged in a going out of business sale. A statement on the True Value store’s Facebook page

Emery Jensen’s XPRESS plan Making hardware assortments easier. Emery Jensen, a division of Ace Hardware Corp., has launched a new merchandising program called XPRESS Hardware to help specialty retailers grow their business. XPRESS Hardware is a turnkey, storewithin-a-store merchandising program that gives non-hardware retailers the assortments and marketing support they need to introduce top-performing, essential hardware SKUs into their

HBSDealer.com

product mix. Three XPRESS Hardware floor plans are available in 800, 1,200 and 1,800 square feet. “This year has presented many of our customers with new retail challenges,” said Georgia Eaton, manager, sales

Spring convention goes virtual Oak Brook, Ill.-based Ace Hardware Corp. changed the format of its 2021 Spring Convention, which had been originally scheduled as a live, in-person event in Dallas, Texas, in March. The event has been recast as a digital even and moved to March 9-12. A separate digital Holiday Trim Show will take place – also in a virtual environment – Jan. 25-Feb. 1. “The decision to move to a digital format was made due to the ongoing Covid-19 pandemic and with the health and well-being of Ace retailers, employees and vendor partners in mind,” the company said.

reads: “We are so proud to have served our local community with goods and services; and proud to have provided jobs for our great associates. It pains us to let you all down, but please join us for our store closing sale going on now!” In and around St. Louis, Westlake already operates a store in Brentwood, in Maryland Heights and in St. Louis proper. Westlake Ace Hardware operates 115 stores around the country. The retailer, owned by the Ace Hardware cooperative, is based in the Kansas City area.

support for Emery Jensen. “One of those challenges for specialty retailers is helping customers get everything they need for their projects in one store visit. XPRESS Hardware is a timely, revenue-generating solution for retailers who want to be a one-stop-shop for their customers.” XPRESS Hardware assortments are AB movers in their product categories, with high-turn rates and the best ROI across the Emery Jensen enterprise. Emery Jensen Distribution is a national distributor serving independent retailers in the pro lumber, paint, hardware, and eCommerce channels.

HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 2020

MARKET INSIGHTS

Bought and sold: more moves from US LBM US LBM has churned out a steady stream of headlines and acquisitions over the past decade. Last month, the building materials distribution giant found itself on the other side of the table as it signed a definitive agreement for Bain Capital Private Equity to acquire a majority stake in the company. US LBM will continue to operate under the leadership of President and CEO L.T. Gibson and the current management team. Financial terms of the private

“We have grown tremendously over the past 11 years, and with Kelso’s support we were able to accelerate our acquisition strategy that has positioned us for continued growth.” — L.T. Gibson, president and CEO

transaction were not disclosed. But the move could set the stage for larger expansion by US LBM through acquisitions and

greenfield openings. Founded in 2009 with 16 locations in 3 states, US LBM has grown to be a national distributor of specialty building materials operating more than 250 locations and 37 operating divisions. US LBM had sales of $3.5 billion in 2019. Kelso & Co. has been US LBM’s investment partner since August 2015. “We have grown tremendously over the past 11 years, and with Kelso’s support we were able to accelerate

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NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

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our acquisition strategy that has positioned us for continued growth,” said Gibson. “US LBM’s national platform, local go-to-market strategy, relationships with top suppliers, and record of successful integrations continues to make us an acquirer of choice in the building materials industry. We look forward to working with Bain Capital Private Equity and leveraging their experience of helping industrial companies scale and attract additional partners.” Since the company’s founding, US LBM has opened more than 30 greenfield locations, including six in 2020. The dealer is no stranger to making acquisitions either. In fact, just prior to the Bain Capital announcement, US LBM acquired Zeeland Lumber, a six-unit. Midwest

HBSDealer.com

Zeeland Lumber & Supply of Zeeland, Mich., operates in Michigan and Indiana.

dealer based in Zeeland, Mich. Zeeland Lumber & Supply, an HBSDealer Independent ProDealer of the Year from 2006, operates three truss and wall panel component manufacturing plants along with three full-service building material yards that

distribute lumber and an expansive range of specialty products, such as windows, doors, roofing, cabinets, decking and interior and exterior trim. The entire Zeeland leadership team will remain with the company, including Mark Miller, who will serve as president, and Mike Dykstra and Rob Groothuis in key leadership roles, according to the announcement of the merger. “We’re proud to be joining US LBM, an industry leader that shares our commitment to delivering innovation and building trust,” Miller said. “Joining US LBM, with its national platform, expert team and relationships with the industry’s top suppliers, creates new and exciting opportunities for both our employees and customers.” In August, US LBM purchased Maner Builders Supply.

HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 2020

MARKET INSIGHTS

Another state for Nation’s Best Nation’s Best, the rapidly growing Dallas, Texas-based hardware and building materials dealer, has acquired Connolly’s Do it Best Hardware & Rental, with five locations in the Fort Wayne, Ind. market. The move puts Nation’s Best in its fourth state, including Texas, Oklahoma, and Florida. Terms of the deal were not disclosed. “We are thrilled to welcome Connolly’s Do it Best Hardware & Rental into the Nation’s Best family and are committed to continuing to provide the best level of service and support to Connolly’s customers and staff,” said Chris Miller, president and CEO of Nation’s Best. “Since 1981, the Connolly’s team has built an exceptional reputation among DIYers and contractors throughout

Northeast Indiana and they are a great strategic fit for our expanding company.” As part of Nation’s Best’s acquisition strategy, Connolly’s Do it Best Hardware & Rental will operate under its existing brand name with its key leadership team continuing to oversee company operations. Nation’s Best said that it will provide the strategic and financial support necessary “to achieve optimal growth

UNCERTAIN TIMES CALL

and profitability” at Connolly’s. “My brother John and I have dedicated our 40-year careers to serving our customers and growing our family business,” said Michael Connolly. “Becoming a part of Nation’s Best ensures that Connolly’s Do it Best Hardware & Rental and all of our associates will remain a relevant and vital resource for hardware, paint, and rental products and services for many years to come. This move also ensures that our customers will continue to be greeted and helped by the same valued associates they’ve come to trust.” Nation’s Best is a member-owner of Do it Best Corp. Founded just last year, Nation’s Best has rapidly expanded to six divisions and 17 locations in four states with over 350 associates. Nation’s Best also recently acquired Simms Lumber with two locations in the Dallas-Fort Worth market.

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NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

R395-064966-0 HBS Dealer Ant Bait Half Pg Ad

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PEOPLE IN THE NEWS Paint and coatings giant PPG has appointed Scott Bartlett as vice president, operations, global architectural coatings. Bartlett joined PPG in 2015 as head of supply chain, architectural coatings for the United States. and Canada (USCA). Prior to joining PPG, Bartlett held roles of increasing Bartlett responsibility at ConAgra Foods, McCain Foods, Merisant Worldwide, Monsanto and DuPont, MaterialsXchange (MX), the Chicagobased B2B eCommerce platform for lumber and wood products, has added Steve Sladoje to their executive team as its chief operating officer. Sladoje has more than 30 years of experience in exchange commodity trading platforms. He began his career as a trader and Sladoje comes to MX after 10 years at NASDAQ where he was the COO of Nasdaq OMX Commodities Clearing Company, a startup he had co-founded that was then purchased by Nasdaq. He most recently served as COO of Nasdaq Futures Inc (NFX).

Tony Jones has been promoted to vice president of finance and controller for Westlake Ace Hardware. He replaces the retiring Pam Samulcek, who has held the post since 2006. In his new role, Jones leads all finance and accounting functions for Westlake Ace, including budgeting, acquisitions, and Jones financial planning and reporting. He also manages the company’s accounts payable, accounts receivable, payroll, and banking teams. Prior to joining Westlake Ace, Jones was director of financial planning and analysis for DineEquity — parent company of Applebee’s Neighborhood Grill & Bar and International House of Pancakes (IHOP).

PRODUCT SPOTLIGHT

Weyerhaeuser announced the appointment of Deidra Merriwether, senior vice president of North American sales and services for W.W. Grainger, Inc., to the company’s board of directors. Merriwether leads the North American sales organization, which represents the largest portion of the overall Grainger Merriwether business, and has full profit and loss responsibility for the company’s Latin American and Canadian businesses. The executive joined Grainger in 2013 after more than a decade in various leadership positions with the Sears Holdings Corporation. Emery Jensen Distribution promoted Jason Hanegan, current VP of sales, to the role of senior VP of national sales. In his new role, Hanegan will continue to develop and implement sales strategies to grow Emery Jensen’s wholesale business. Hanegan joined Emery Waterhouse in 2004 as a Hanegan business development manager. Over the years, he worked his way up through the ranks as a regional sales manager, sales director, senior. director of sales and VP of sales.

HBSDealer.com

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HARDWARE + BUILDING SUPPLY DEALER NOVEMBER/DECEMBER 2020

Residential Construction/Sales

Monthly Retail Sales, not adjusted

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.: 1,530,000

NAICS 44413

(sales in $ billions)

1600

(sales in $ billions)

3 2.80

1500

2.67

1400 1300

33.4

39.4

38.1

37.8

2.35

2.55

2.34 2.14

30.9

1200

1100

1000

900

800

AUGUST

O N D J F M A M J J A S O

2019

SOURCE: COMMERCE DEPARTMENT

Single-family starts

SEPTEMBER

OCTOBER

JULY 2019

2020

AUGUST

SEPTEMBER

2020

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

(in thousands, SAAR) Oct.: 1,179,000 1200

HBSDealer Stock Roundup

1150 1100

the percent-change performance of stocks based on Nov. 19 prices

1050

1000 950 900

850 800

ANNUAL CHANGE

700 650

BMC

750

O N D J F M A M J J A S O SOURCE: COMMERCE DEPARTMENT

Existing-home sales (in millions, SAAR) Oct.: 6,850,000 7

DE TSCO

BLDR

30 LOW

SHW HD

6.5 6

SWK BECN

10 DJI WY 0 -15 -12 -9 -6 -3 0 3 6 9 12 15

5.5 5 4.5

MONTHLY CHANGE

4 3.5

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

O N D J F M A M J J A S O

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)

8.0

10.0

4.0

Current Prior month

120

Prior year

16.0

6.9%

18.0

October 0.0

$2.50 $2.00

14.0

6.0

2.0

100

12.0

20.0

100.3

$2.12

October

Nov. 19

140

$1.50

NOVEMBER/DECEMBER 2020 HARDWARE + BUILDING SUPPLY DEALER

$3.00

SOURCES: LABOR DEPARTMENT, THE CONFERENCE BOARD, AAA

HBSDealer.com

HBSD-1220

Articles inside

Co-Op Report

Huge demand puts pressure on treated lumber

People in the news

From the ProDealer Industry Summit, forecasts for growth

Putting the “e” into eCommerce

Fast-forward with fastener trends