Home improvement stores to shut down

The ranks of existing home improvement stores are thinning as the big boxes continue their onslaught on the Indianapolis market.

A pair of chains have decided to close local outlets. Furrow's Building Materials is liquidating two of its five Indianapolis-area stores-one in the Nora area on the

Jeld-Wen Inc., an Oregon-based manufacturer of doors, windows and specialty wood products, owns Contractors' Warehouse. In addition to the Indianapolis location, the company is closing its store in Lexington, Ky. That will leave it 14 stores, including locations in Fort Wayne, Cincinnati and Columbus, Ohio.

Contractors' Warehouse serves remodelers, independent contractors, homebuilders and other building professionals. It is also open to the general public.

Jeld-Wen officials did not return phone calls before IBJ deadline seeking comment on the store's closing.

The Furrow decision came in midOctober, when parent company Payless Cashways Inc. announced it was closing a total of 22 retail locations in nine states. The Kansas City-based company said it wants to focus its growth on professional builders, remodel and repair contractors, institutional, buyers and what it calls "project-oriented" consumers.

That means it will no longer chase the "do-it-yourselfers" who have become a staple for the two largest chainsHome Depot Inc. and Lowe's Cos. Inc.

"Basically, what Payless is doing is moving aggressively toward a format that will be primarily aimed at [professional] builders and remodelers, and any of their stores that don't fit that format are going to close:' said John Caulfield, executive editor of National Home Center News, an industry publication.

At the same time it announced the store closings, Payless Cashways said it was opening five PCI Builders Resource stores in Ohio, Texas, Colorado and Missouri. Those non-retail facilities are geared toward homebuilders and are expected to be less expensive to operate.

For now, Payless Cashways has no plans to open any PCI Builders Resource stores in the Indianapolis area, spokeswoman Betty Hilliard said.

Times have been tough at Furrow's parent, which emerged from bankruptcy reorganization three years ago. The company--which also operates stores under the Lumberjack, Knox Lumber, Hugh M. Woods and Contractor Supply nameshas seen year-to-date sales dip to $1.2 billion, down from $1.4 billion in the first nine months of 1999. Payless Cashways had a per-share loss of 89 cents in 1998 and 47 cents in 1999.

Hilliard said competitive pressures from the likes of Lowe's and Home Depot had nothing to do with the decision to close stores. But with the way the one-two punch of home improvement chains is steamrolling across the country, it's difficult to see how smaller entities aren't getting swallowed up.

"Obviously, the move by Payless has been a competitive response," Caulfield said.

Atlanta-based Home Depot, with annual sales of $38 billion, is opening stores at a blistering pace and now has more than 1,000. Lowe's, headquartered in North Carolina, is a distant second with about 600 stores and $16 billion in annual sales.

Of the two industry juggernauts, Lowe's is the only one with stores up and running in Indianapolis. Home Depot is in the process of making its grand entrance, having secured sites on all sides of town.

Survivability by the independents depends on a few factors, according to Caulfield. He said those stores that belong to buying groups, such as Ace Hardware and Do it Best, stand the best chance.

"It's absolutely provable that those retailers that are most involved in programs that their buying groups offer are the ones that are the most successful," he said. "Ace has 5,100 dealers. They're able to get pretty much the same type of pricing that Home Depot can get in certain product categories."