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Lanoga's decentralized market-dictated growth just may make it the industry's nimblest pro chain
This past June was a busy month for Lanoga Corp.
Its Midwestern division, United Building Centers, was closing its acquisition of Madison, Wis.-based Priority One Millwork, an assembly plant that would strengthen its southern Wisconsin presence.
Another division, Home Lumber, was developing a 15-acre property in Colorado Springs, Colo., to serve as its main lumberyard in that bustling city.
Lumbermen's had just finished reducing its Redmond, Wash., store to 14,000 square feet from 19,000 in an effort to better reflect the location's 70 pro/30 DIY customer split.
Alaska-based Spenard Builders Supply was sporting a new wall-panel plant created specifically for its component-hungry builder customers.
And Michael Morehouse, Lanoga's executive vp-director of business development, hosted the first meeting of the Lanoga Purchasing Council, a buyers committee organized to develop better buying practices for all four divisions.
Captured as a snapshot, the month's activities signify how, in ways large and small, Lanoga is advancing its steady shift to pro customers. In 1996, less than two-thirds of Lanoga's sales came from pros. In 2000, three-quarters of Lanoga's $1.3 billion in revenue were generated from professional and commercial accounts.
"Our long-term vision is the pro business,"Morehouse explains. "Retailers specializing in DIY will be in many, if not all, of our markets." That expansion may reach even the remote locations where a UBC or Spenard yard might, by virtue of a lack of competitors, snare half its sales from consumers. But more interesting is the manner in which Lanoga is accomplishing this shift.
In an era when the concepts of synergies and leveraging strengths are highly influential business philosophies - and especially so in the consolidating lumber and building materials supply industry - Lanoga may be positioning itself as the most nimble of the multi-regional pro dealers. In its stable lie high-volume lumberyards that serve production builders, small yards for...