One of the biggest LBM acquisitions last year also involved one of the biggest sets of closures. Six weeks after Jim Drexinger’s American Construction Source bought the Meek’s chain, he shut down a half dozen of the company’s 30 stores in Missouri. Why? Basically, because times had changed.
When I asked Drexinger about the move, he said a chain does best when its yards are about 50 miles apart. One store had five sister locations within 13 miles of its front door.
Placing stores a couple dozen miles apart might have made sense back when deliveries were made over muddy roads with trucks that were close cousins to the Model T, but times have changed. As a new owner, this was clear to Drexinger. But to too many other dealers, I fear, such things are not so obvious.
Historical precedents and practices can ossify a company, particularly if a loved one is involved. I remember years ago when a dealer told me he had finally shut down the lumberyard’s side business of making windows. “It was the best move I made last year,” he said. “I should have done it years before. But every time I contemplated it, I felt I was killing my grandfather.”
Trying new stuff is essential to a company’s long-term success, but humans prefer to forget failure and remember success. After a generation passes, it’s easy to think that every choice granddad made was correct and that it’s best not to stray far from his path.
As a journalist, I’ve worked at many places that have been around at least 100 years. One, the Journal of Commerce, was created in 1827 by Samuel Morse, a decade before he perfected the telegraph. In the 1930s, it was bigger than The Wall Street Journal, and its owners, the Ridder family, were half of what became the giant Knight-Ridder newspaper chain. But the rise of the internet demolished its core financial underpinning: “Ship cards,” which were printed notices of the ports where and dates when a cargo ship intended to dock. Today, Knight-Ridder is gone, and the Journal of Commerce has morphed into an online service that supplements its new owner’s data reports. If it had stuck with print, the Journal of Commerce would be dead.
You exist to do what you can do for customers today, in the ways and means that they want to be served and in a manner that enables you to survive and thrive. This might mean you no longer need to have stores so close together. It might mean a once-flourishing service that was the apple of your ancestor’s eye no longer makes sense. It might mean you should look at what’s coming in LBM and make the same, big, scary bet that your great-grandparents did when they first opened for business. And it might mean it’s time to leave town.
I once met a dealer who had a string of small stores in rural Kansas towns. One was so small that it had just two employees. “Why don’t you close it?” I asked. “Because one of those two employees is the mayor,” the dealer replied. “If we close, the town will go away.”
Well, maybe that’s true. But the American landscape is full of ghost towns near where the mine gave out, or the topsoil blew away, or the Interstate was routed somewhere else. If that happens in your market, take pride in how your company helped the town prosper during the years it needed you. But don’t let that heritage—and the family memories attached to it—stop you from doing what’s best for your company’s future.
