84 Lumber Company Announces Aggressive Three Year Strategic Plan
Building Materials Supplier Aims for $10 Billion in Sales
EIGHTY FOUR, Pa., April 4 /PRNewswire/ -- 84 Lumber Company, the nation's largest privately held supplier of building materials to professional contractors, today unveiled a strategic plan that will catapult the company to $10 billion in sales by the end of calendar year 2009. The company posted nearly $4 billion in sales in 2005. Among the key initiatives of the three year plan; opening 125 new locations, adding 1,000 outside sales representatives, expanding the company's Installed Sales Services program, increasing manufacturing through 84 Components, and increasing sales to large, national production builders. "Over the past three years, our sales have increased from $2 billion to nearly $4 billion. The fuel for this has been adding outside sales representatives and stores in high growth markets which allowed us to quickly gain greater sales and market share," said 84 Lumber Company President Maggie Hardy Magerko. "However, as we continue to grow and move to increase sales by an average of $2 billion a year for the next three years, we need to ensure that we are managing our stores and investment in them to maximize our return on assets (ROA)." With more than 95 percent of sales coming from professional builders, the company can service customers in a much greater geographic area than a traditional consumer retailer. A key component of the strategic plan is to redeploy company assets to focus on high growth markets by closing underperforming stores. "As we analyzed our ROA over 521 stores, we determined that we needed to make some tough decisions regarding underperforming stores and to close them so that we can better utilize our assets on a national basis," said Hardy Magerko. "The stores we are closing are not performing to consistent levels required by our business model and are located in no-growth or rural markets that have either matured or never reached their projected potential from a housing start perspective. Today, as we open new stores, our benchmark is a minimum of 3,000 housing starts annually. The stores we are closing are located in markets that do not come close to reaching this bottom line housing start benchmark." As a result of this analysis, 84 Lumber will close 67 stores and redeploy those assets into markets where housing starts are high and the company is aggressively expanding so that each new and existing store can produce a much higher level of sales and ROA. In markets with multiple stores, sales staff and customers will be transferred from closed stores into other existing stores. "As we close and consolidate these stores, we are in the process of opening 50 new stores in 2006, and already have 42 new store locations slated for 2007," added Hardy Magerko. "Looking ahead to 2008, we are actively reviewing more than 20 new store sites at this time." In addition to the new stores opening over the next three years, the company will expand its outside sales force by a minimum of 1,000 professionals and will hire hundreds more to staff the new stores. In addition, expansion of the Installed Sales Services, which includes products such as framing, doors and trim, windows and insulation, and the expansion of manufacturing through 84 Components will create thousands of additional jobs. "Our goal is to continue to grow, and grow responsibly, so that we are providing long term and stable career paths for our associates today and tomorrow," said Hardy Magerko. "The implementation of this strategic plan will provide such an environment for continued growth for both the company and our associates." 84 Lumber Company Celebrating its 50th anniversary, 84 Lumber Company was founded by Joe Hardy in 1956 in the town of Eighty Four, Pennsylvania, where the original store continues to operate today. 84 Lumber Company has risen to become the largest privately-held building materials supplier to professional contractors in the country posting 2005 sales of nearly $4 billion with 95 percent of sales to the professional market. 84 Lumber Company operates more than 450 locations; plus 19 84 Components manufacturing facilities from coast to coast. With more than 10,000 associates nationwide, 84 Lumber Company provides professional, residential and commercial contractors and remodelers with quality building materials, supplies, expertise and services such as lending and insurance. Please visit our web site: www.84lumber.com 84 Components Founded in 1985, 84 Components is a subsidiary of the 84 Lumber Company. Based at the 84 Lumber corporate offices in Eighty Four, PA, 84 Components has offered unparalleled service, quality, technology and value to professional builders for over 20 years. 84 Components, which operates 19 plants nationwide, is designed to cater to the specific needs of professional builders. Each 84 Component plant utilizes the latest technology to design, layout, and produce building components such as floor and roof trusses and wall panels. 84 Installed Sales At 84 Lumber we pride ourselves on our ability to adapt to our customers needs. An example of this commitment is the continued expansion of our Installed Sales Services which relieves professional contractors from the everyday problems associated with the coordination of materials and reliable skilled labor. 84 Lumber Installed Sales Services handles installation of a variety of building materials including; framing, roofing, insulation, windows, siding, doors and trim. 84 Lumber Company Store Closing Locations April 4, 2006 Pennsylvania West Virginia Mississippi Ephrata Gallipolis Ferry Pontotoc Bethel Park New Martinsville Kane Wellsburg Michigan Hermitage Logan Benton Harbor Woodland Houghton Lake Northeast Jackson Imperial Kentucky Homer City Alexandria Wyoming Johnstown Campbellsville Rock Springs Moon Township Morehead Gillette Wexford Washington Arkansas Malvern North Carolina Clarksville Ohio Clinton South Columbus Oxford Virginia Lima Blairs Mansfield South Carolina Bucyrus Camden Findlay Hillsboro Tennessee Newbury Kingsport North Lima Oak Ridge Akron Clinton Highway North Canton Union City Ashtabula Shelbyville Alliance Lawrenceburg Brunswick Decherd Georgia Calhoun New York Commerce Ontario Olean Illinois Oswego Springfield Oneonta Alton Batavia Maryland New Jersey Woodlawn Berlin Missouri Indiana Neosho Centerville Camdenton Kokomo Merrillville 84 Lumber Company New Store Openings 2006 47 Locations as of 4/4/06 Alabama Minnesota Tennessee Mobile Hugo Chattanooga Northport Lakeville Hendersonville Piperton Arizona Mississippi Texas Florence Moss Point Yuma Burleson North Carolina Georgetown California Houston West High Point Killeen Rialto Huntersville McKinney Visalia San Antonio South Nevada San Benito Florida Reno Utah Sarasota Ft. Lauderdale Oklahoma Spanish Fork Fort Pierce West Jordan Haines City Oklahoma City North Medley Virginia Jensen Beach Oregon Miami Dade Fredricksburg Riviera Beach Forest Grove Winchester Redmond Idaho Wisconsin Pennsylvania Meridian Wrightstown Exton Illinois South Carolina Crystal Lake Minooka Lexington Louisiana Ascension Parish Hammond Lafayette Slidell
SOURCE 84 Lumber Company
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