In shaky housing market, Stock regains footing

November 24, 2011 

When Jeff Rea took over as CEO of Stock Building Supply a year ago, you could make a fairly convincing case that the worst times were behind the Raleigh building supply company.

Stock, which was founded in 1922 as Carolina Builders, had already been through a gut-wrenching restructuring that included a brief stint in bankruptcy and the shedding of hundreds of jobs.

The restructuring, combined with a timely investment by the Los Angeles private equity firm, The Gores Group, meant Stock was in a much better position that some of its cash-strapped and bloated competitors.

"That aggressive move allowed Stock to fundamentally survive and positioned us to thrive," Rea, 46, said Wednesday in an interview.

That Stock, which today employs 2,194 people in 13 states, is still a long way from thriving has much to do with new home construction, which remains at historically depressed levels three years after the recession.

Stock sells windows, doors, roofing and other housing material to builders. With the number of new housing starts in the country down about 70 percent from the peak, the industry is a shadow of its former self.

"And we've been down at this level for an unprecedented period of time," Rea said.

Even the Triangle, a traditionally solid market where Stock employs 348, has seen housing starts decline in the mid-60 percent range.

"There's not any great market out there," Rea said. "It's just bad to terrible."

The challenge for Stock, and any other company operating in an industry where demand is flat or shrinking, is how to capture more of a shrinking pie.

In Stock's case, the answer has been customer service.

Over the last year the company has invested heavily in additional training for its employees to help them be more responsive to the changing needs of its customers. It has also installed proprietary, GPS-based, logistics software that enables the company to track delivery of its materials and keep its customers in the loop each step along the way.

The platform allows Stock, for the first time, to quantify the level of customer service it is providing.

"Most of our competition doesn't have this technology and clearly doesn't have the software and some of the firmware we've developed," Rea said. "We know today that we are at 92.5 percent in Raleigh, for instance."

That means the company is delivering everything it promises, on time, 92.5 percent of the time.

The company has also become more aggressive about marketing the repair and remodeling services it offers. Stock recently began running television advertisements in the Triangle touting a new repair and remodeling center at its Yonkers Road store in Raleigh.

Stock today operates in 21 markets from Los Angeles to Raleigh. The company's employee count has remained basically flat over the last year as it waits for signs that the market may be improving.

Rea said the company expects 2012 to look a lot like 2011.

"Until the consumer, and quite frankly the employers, can feel a little more comfort in what the business landscape's going to look like, I don't see the job growth situation changing significantly in the next 12 months," he said.

Last week, The Gores Group announced that it had acquired the remaining 49 percent of Stock that it didn't already own. Rea said Gores' investment is a vote of confidence in the company and its strategy.

"At some point in time we'll have new owners, but whether that's a public exit for Gores or a sale to someone else we're not too worried about it," he said. "We've got a board that's extremely supportive and is letting us run the business like we think it should be run."

Bracken: 919-829-4548

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service