5 minute read
Sears To Buy Orchard Supply Hardware
Sears, Roebuck & Co. has agreed to purchase 6l-unit Orchard Supply Hardware, San Jose, Ca., for about $415 million.
Orchard's board approved the agreement and its largest shareholder, Freeman Spogli & Co., agreed to tender its shares to the offer.
The deal enables Orchard, which will retain its name and senior management, to accelerate its expansion. Used to adding five to l0 stores a year, Orchard could double that pace under Sears and plans to add 60 to 90 stores in California, mostly in
Southern California.
Chicago-based Sears currently operates 115 Sears Hardware stores in the Midwest and on the East Coast and nationally forecasts 500 total hardware stores in four years.
The strategy is to use their popular Die Hard, Kenmore and Craftsman brand names and vast distribution network to create a stronger presence outside malls, where growth is more limited and space better allotted for more apparel. Sears also operates 800 department stores, 104 furniture stores and 1,600 auto-related stores.
Lumbermen's Buys Babbitt's Home Centers
Lanoga Corp., Redmond, Wa., has agreed to purchase the six-unit Arizona chain Babbitt Home Centers for its Lumbermen's division.
The sale, set to close Oct. 7, includes home centers in Flagstaff, Sedona, Cottonwood, Page, Lake Havasu and Prescott Valley, Az., and the door, cabinet and window portions of Babbitt's Finish Line business.
With 37 stores in Washington,
Oregon and Idaho, Olympia, Wa.based Lumbermen's is among Lanoga's three geographic divisions. They also operate 10 stores in Alaska under the Spenard Builders Supply name and 112 stores in the Midwest and Rocky Mountain states as Fish Building Supplies and United Building Centers.
Babbitt's had been a family-owned business for nearly I l0 years.
Ziggy's Closes 1, Opening 2
Ziggy's Building Materials, Spokane, Wa., will add two stores in the eastern Idaho market and has closed its Vancouver, Wa., store, citing the county's sales tax and anti-growth mentality.
"Clark County is in the dark ages, you can quote me on that," sudZieg- ler Lumber Co. president Reid Ziegler, who owns the Vancouver Ziggy's and eight others. Other family members own the other 15 stores. It took nearly two years for Ziggy's to receive the necessary permits and meet other county regulations for a move in 1993.
As well, across the Columbia River in Oregon retailers don't have to charge Clark County's 7.6Vo sales tax. "'We can make more money with our investments elsewhere than in Vancouver," Ziegler explained.
Ziggy's also opened a 30,000-sq. ft. store in Ontario, Or., just across the border from Boise, Id.; received permits to construct a 50,000-sq. ft. unit in Post Falls, Id., and received a permit extension for a possible $1.6 million replacement store in Lewiston, Id.
The Source
Bankrupt Ernst Gontinues Gut Backs
Less than a month after filing for Chapter l1 bankruptcy protection, Ernst Home Centers has released its chief financial officer and executive v.p. of operations.
Chief financial officer Michael Baumann, with Emst since 1986, and executive v.p. Thomas Stanton, who arrived in 1985, were the chain's highest ranking executives after c.e.o. Hal Smith.
"I don't know how you can file bankruptcy and then fire your c.f.o.," noted one analvst.
Searching for other ways to cut costs, Ernst is trying to free itself from its long-term lease on its 82,000sq. ft. corporate headquarters in downtown Seattle, Wa., and relocate to less spacious quarters.
Earlier in the year Ernst laid off 50 employees and after the bankruptcy filing estimated that as many as 1,250 more workers could be let go.
Meanwhile, Ernst hired liquidation specialist Gordon Brothers Partners Inc. to conduct going-out-of-business sales at 1'1 locations, incorporating inventory from 14 other closed facilities (see Aug., p.24).
Shareholders have also filed suit against the company, accusing Ernst officials of violating securities laws in a $45 million stock offering two years ago. The suit alleges the chain misled investors about its financial position and ability to compete successfully as a hardware superstore.
It was filed on behalf of investors who bought Ernst common stock from Sept. 27, 1994, when the stock was initially offered at $16 per share, through Jan.26, 1996. Recently, the shares have sold for about $1.50.
CSI Introduces Olympic Brand Treated Wood
Chemical Specialties Inc., Charlotte, N.C., has agreed with PPG Architectural Finishes Inc. to market CCA pressure treated wood with built-in Olympic waterproofing formula protection.
During the pressure treating process, CSI is combining its chemicals with Olympic's MP5 waterproofing formula to provide a brand name product said not to crack, split, warp, twist or rot.
The new Olympic standards include increased mold inhibitors, 37Vo more Ultrawood water repellent and a comprehensive quality control program.
"In the first phase, we're using our chemicals but their standards," says CSI's Tom Bailey. "Further down the road, we'll be looking at Olympic colorants and different stabilizers."
But the most salable new feature is the Olympic brand name. The wood will have enhanced, "heavily branded" packaging, including Olympic edge protectors and bundle placards.
Other pressure treating chemical producers are also striking deals with well known brands of consumer finishing products, such as Hickson Corp. with Thompson's, already on the market.
lnglis Joins Dixieline Board
James W. Inglis, former executive vice president of strategic development for Home Depot, has joined the advisory committee of Dixieline Lumber Co.'s board of directors. Inglis served as vice president of
"Cluote" vof .u. MOnth
"Our industry has been greatly disappointed in the way the Administration has implemented this law to date. And the new implementation guideline will only make a bad situation worse."
- W. HensonMoore, pres./ceo, Ameicqn Forest & Paper Assn., on the 1995 timber salvage law merchandising for San Diego, Ca.based Dixieline from 1978 to 1983. when he joined Depot. He left last year and is now chief operating officer of The Maxim Group, the largest floor covering retailer in North America, serving on its board and president of its Carpetmax division.
Hardwood Meeting In Boston
The National Hardwood Lumber Association will hold its annual convention Oct. 18-22 at the Marriott Copley Place, Boston, Ma.
The schedule includes committee meetings, exhibitor showcase, third annual Hardwood Forest Foundation golf benefit, and keynote address by W. Henson Moore, president and ceo, American Forest & Paper Association.
Seminars: "Turn Low Grade, Low Value Lumber into $s," "Business Planning: Why & How?," "Legislative Update: Candidates-Friend or Foe?," "Internet or Not-Is That the Question?" and NHLA's Bob Sabistina and Rich Hascher on "Lumber Claims Handling & Grading Rules."
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