ProBuild invades 84 Lumber's home territory
ProBuild Inc., the nation's biggest full-service lumber yard, appears to have decided to take on 84 Lumber Co. in its home territory by opening a store in Western Pennsylvania and other areas near the Eighty-Four, Washington County, company's headquarters.
ProBuild, led by former 84 Lumber executive Bill Myrick, is opening a store in the former John Naretto automobile dealership in White Oak.
ProBuild, which operates 470 building material stores for contractors and do-it-yourselfers, is opening another store in Morgantown, W.Va., according to ProSales Online, a Washington, D.C.-based trade publication. Yet another ProBuild site is scheduled to open in Altoona, said a spokesman for Washco Real Estate in Hagerstown, Md.
A ProBuild spokeswoman said, "We are expanding into the Pittsburgh area because of the market's dynamics."
"We knew they (ProBuild) were moving into our region when they announced their Morgantown location, and knew they also were looking for locations closer to Pittsburgh," said 84 Lumber spokesman Jeff Nobers. "This is a stable housing market, which did not experience the housing bust following the boom years."
Competing with ProBuild is nothing new, Nobers said. "84 Lumber competes with ProBuild and other national and regional lumber yards in other areas of the nation."
84 Lumber operates in 34 states, has about 280 stores and manufacturing plants and employs 3,700, including about 300 at its headquarters in Eighty Four.
In the past three years, as the home building industry has slumped, 84 Lumber was forced to close about 110 stores and component plants and eliminate 6,230 jobs.
84 Lumber had $1.45 billion in revenue last year, up from $1.35 billion in 2009, according to Nobers. ProSales reported Denver-based ProBuild had $3.2 billion in sales.
In 2006, prior to the recession and the collapse of the housing market bubble, a confident 84 Lumber President Maggie Hardy Magerko, daughter of founder Joe Hardy, predicted that the company would increase sales to $10 billion by the end of 2009, from $3.9 billion in 2005.
ProBuild's Morgantown store is scheduled to be completed this month, with 45,000 square feet of space, employing between 15 and 20 workers, according to ProSales.
Washco Real Estate purchased the Naretto property for $1.3 million and leased the site to ProBuild under a 10-year agreement, a spokesman said. It also owns the Altoona property.
"None of the three sites -- White Oak, Altoona and Morgantown -- are yet open to the public for business and an announcement will be made when that occurs," the ProBuild spokeswoman said.
ProBuild expects the White Oak store, at 2900 Jacks Run Road, to employ up to 30.
In February, 84 Lumber completed a financial restructuring that the company said was critical to its survival. It repaid a $40 million high-interest loan from Cerberus Capital Management, using a combined $20 million from the Housing and Urban Development's loan guarantee program and $20 million in private financing.
The HUD loan guarantee was sponsored by Washington and Fayette counties and backed by $10 million in real estate owned by 84 Lumber, including the company's headquarters and office buildings in Eighty Four, as well as all of the chain's retail stores in Washington County.
Myrick, president and CEO of ProBuild, was chief operating officer at 84 Lumber until 2007. He resigned after 25 years with the company to "pursue other opportunities," joining ProBuild. He could not be reached for comment.
Other ProBuild locations in Pennsylvania are in Harrisburg, Lancaster and Philadelphia. There are three ProBuild sites in Maryland -- in Hagerstown, Frederick and Catonsville.