Carter Lumber Consolidates to Grow
A rare news item based in our industry came across communications channels the other day. The powerful, regional lumberyard chain, Carter Lumber announced it was closing 26 of its nearly 170 yards. What made this item particularly noteworthy was that these grouped closings were enacted to promote the company’s growth through expansion.
While this might seem contradictory, the move was actually based on careful calculations as to how the company might continue its recently aggressive makeover with a strategic eye toward growing its market share. Here the stores slated for closure were either seen as serving markets (generally smaller ones) with little potential for significant financial growth or as residing in a market which the company saw as saturated, with over-coverage by its own almost competing locations. Essentially, being free of these yards and their potentially relatively meager returns would free the company to seek new markets for considerable investments.
In fact, the company opened ten new locations over the past year and a half and has seen encouraging financial results from those openings. This has served to spur the thirst for additional prudent openings and even to explore somewhat promising though distant markets.
During recent years, as many chains and independents struggled to remain afloat during a market economy that was considerably rougher than most, Carter transformed itself from its traditional lumberyards to a chain focused on the professional market. Most of our industry is still far from out of the woods as monthly industry indicators continue to waver and fluctuate. Yet Carter has impressively, successfully expanded lately as it systematically seeks new, healthy markets.
Not surprisingly, despite the simultaneous closing of so many locations at one time, the company has stated clearly that it expects to lose only about 30 full-time positions due to the closures. Of course, this goes in hand with a company long noted for careful planning. It also reflects the nature of our industry.
Ours is an industry based on essentially familial values and relationships. While Carter Lumber’s Chairman and CEO, Neil Sackett, is the grandson of one of the two company founders, many companies populating our market without such a family-based heritage attempt to cultivate corporate cultures which encourage employee loyalty with a view toward the long haul. Thus when times are tough, every effort is made to maintain the employment of workers, the majority of whom are generally seen as family members. When closures have been necessary, as a general rule in this industry company managements seek to place threatened personnel in other company stores, at its warehouses or even with distant ‘friendly’ competitors or other types of retailers.
In this case, for this company, times aren’t particularly difficult, as company management envisions a bright future with significant growth. Still the loss of 30 jobs as the result of 26 closures is nothing short of a most enviable achievement.