After A Round of Closings, Carter Lumber Enters a New State
Last month our CSG Insight reported on a somewhat startling announcement by Carter Lumber. It stated that the company was embarking on a round of locations closures which totaled 26 of its almost 170 yards.
As noted in the Insight, the twist in this story was that the company was implementing the bold round of closings in order to foster its plans to grow in potentially more lucrative and underserved markets. The company was clear as to its reasoning behind the closings and the background of its expectations to quickly refocus and grow its course.
Now less than three weeks later, Carter has acquired Athens Building Supply, an independent dealer in Georgia. This move marks a clear indication of the company’s eager eye, looking toward aggressive expansion. As previously indicated after its round of closings the company was looking ahead to new markets. The Athens acquisition not only gives the company a presence in a new market, the move marks Carter’s entry into a new state, one with a great deal of potential for growth.
Not only did Carter quickly follow its mass closings with entry into a promising new territory, the company coupled the disclosure of its acquisition with an announcement that it had hired a veteran team to facilitate its inauguration into a new state. Included in this group was a 22 year industry veteran who will serve as district manager for the entire Atlanta market.
This alone implies that the company views the acquisition as a first step in establishing a foothold in a new and robust market. Georgia, the company believes, is rife with the potential for additional attractive locations and considerable profitability, even beyond Atlanta.
As the announcement of the acquisition was made, Athens Building Supply quickly was reintroduced as Carter Lumber. This rapid implementation serves as a bold introduction to the Carter brand and its stated intention to be viewed as ‘being the best lumberyard in the state of Georgia’.
In published statements, company president Jeff Donley has announced that Carter’s intention is not simply to follow trends but to develop markets. Here it is expected that the company’s current, successful platform should need few tweaks to succeed in these new markets. It is likely that any adaptations that seem appropriate, especially in terms meeting the needs and expectations of new customers, are likely to be entertained and tested. After all, the company only seeks to be the best of the bunch to its new cadres of clientele.
About four and a half years ago, as I contacted executives from top companies in our industry to review their company data for our CGS database, I noticed a trend. Several executives discussed their then recently plunging annual financials with a tremendous degree of pragmatism. They held their heads high as they universally described almost endless rounds of planning meetings. These generally resulted in decisions to cut locations where absolutely necessary and to consolidate resources where possible in order to adapt to the harsh conditions brought on as a result of the subprime crisis and the recession. Most of these companies were pro dealers and their clientele was mostly made up of contractors and builders who were struggling far more than most companies in that horrible economic climate.
In subsequent years, most of these companies had pretty much stemmed the financial bleeding and were actually carrying out carefully planned, well thought out new openings. This effort and success, while much of their competition continued to suffer.
Though hopefully the most dire aspects of this economy have passed or are passing, pragmatic companies such as Carter Lumber are thriving by seeing the obvious and looking beyond. Some might call their round of closings in order to promote expansion, addition by subtraction. Others see this as thinking imaginatively outside a not so big box.