News
Breaking news in Wholesale Distribution
USG Corp, Chicago, IL, announced its specialty distribution subsidiary, L & W Supply, will acquire California Wholesale Material Supply Inc. for $280 million.
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California Wholesale Material Supply is a distributor of building materials with annual sales of $600 million. It has 30 locations in seven Western states and Mexico and nearly 900 employees.
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The acquisition is expected to help USG enhance L & W’s reach on the West Coast and in the Southwest.
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L & W Supply contributes about $2.5 billion to USG’s annual sales.
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USG also announced it would build a new plant in northern California to manufacture about 1 billion square feet of SHEETROCK …
Higher electricity and energy prices, as well as metals prices, have led Airgas, Inc., Radnor, PA, to increase prices on packaged and bulk gases, and other products.
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We are facing rising costs, even though the escalation of the past year has moderated, said Airgas Chairman and CEO Peter McCausland.
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Prices will increase, on average:
10%-15% for packaged and bulk industrial gases, including oxygen, nitrogen, and argon; acetylene and other fuel gases; specialty gases; process chemicals and rare gases; medical gases; nitrous oxide, carbon dioxide, hydrogen, and dry ice;
15%-25% for helium
Effective immediately, Airgas also will raise rental rates for cylinders and bulk tanks …
Stockholm, Sweden-based AxIndustries has acquired AB Sverull, a distributor of bearings, transmissions and seals, also based in Sweden.
Sverull has annual sales of SEK 125 million with more than 45 employees  ; at offices in five cities.
After the acquisition, AxIndustries will have annual sales of more than SEK 600 million in bearings, transmissions and seals. It has mroe than SEK 1.1 billion in sales overall. AxIndustries is a part of Axel Johnson International.
Sverull will continue to be run as an independent company in AxIndustries.
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HD Supply reported sales of $12.07 billion in fiscal 2006, an increase of 161.6 percent over 2005. Most of that growth was driven by the almost $4 billion in acquisitions made in the past year when HD Supply bought diversified distributor Hughes Supply for $3.4 billion. In the fourth quarter 2006, sales for HD Supply grew by 64.4 percent to $2.9 billion. In 2006, the retail division had sales of $79 billion, up 2.6 percent. Overall, sales at The Home Depot were $90.8 billion, 11.4 percent over last year, with profit steady at $5.8 billion. Comparable store sales for the year were down 2.8 percent. Home Depot had a slow fourth quarter, with profit falling 28 percent to $925 million from $1.3 billion last year. Sales in the fourth quarter were $20.3 billion overall, …
Last week saw a feeding frenzy of rumors in distribution, with action on both sides of the Atlantic. The biggest hunters suddenly became the hunted.
The history of independent distribution channels has repeatedly provided pointed lessons that size, more often than not, is the real giant slayer. It is tough to institutionalize flexibility and strong service levels – the hallmark of local distribution – across states, much less international borders. The next few years may tell whether there is an opportunity to create a global platform that doesn’t self destruct on its own growth plans.
Some might say too much money is overheating valuations and expectations. The surprise is that the M & A market in distribution (and overall) remains hot in 2007, with most expecting …
December 2006 sales of merchant wholesalers, except manufacturers’ sales branches and offices, were $337.1 billion, up 1.8 percent from the revised November level and were up 8.6 percent from the December 2005 level. December sales of durable goods increased 1.1 percent from last month and were up 7.0 percent from a year ago. Compared to last month, sales of hardware and plumbing and heating equipment and supplies were up 4.2 percent and sales of motor vehicle and motor vehicle parts and supplies increased 2.9 percent. December sales of nondurable goods were up 2.5 percent from last month and were up 10.2 percent from last year.
Inventories . Total inventories of merchant wholesalers, except manufacturers’ sales …
Wholesaler-distributor revenues were $3.903 trillion last year, up 9.8% from 2005, unadjusted for seasonal variations. Wholesale revenues for durable goods were up 8.8%, and nondurable goods sales were up 11%. The increase in sales was slower than in years’ past, partly due to a slowdown in commodity inflation.
The MDM Inflation Index, which measures a cross-section of industrial supplies, rose 3.47 percent from December 2005 to December 2006. In comparison, the index rose 5.58% from December 2004 to December 2005. Here’s the breakdown in sales by sector for 2006.
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Company Snapshot:
- Number of branches: 45
- Number of employees: 450
- Key customer base: Food processing, manufacturing, industrial
Inventory management provides both a challenge and an opportunity for all distributors. Our stock is our lifeline. If we do not maintain adequate supplies of merchandise, we lose sales. On the other hand, inventory costs money. The ongoing struggle is to have just the proper amount on hand, but not too much.
In past years, we’ve fallen into the distributor habit of not thinking about surplus inventory until the end of the year. During an annual inventory taking, it was obvious that we had accumulated way too much stock on our shelves.
Recently, we’ve …
In the mid-1990s, Mayer Electric Supply, Birmingham, AL, prepared and mailed its invoices and statements in-house. The distributor had employees who printed the mailings on high-speed printers at night and used a machine to fold and stuff the mailings. It also maintained a Pitney-Bowes postal machine.
It was quite a cost factor to do all of that, says Mayer Electric CIO Barry Carden.
So Mayer started looking at outsourcing its paper billing. The electrical distributor, which serves mostly the Southeast U.S., found a provider in 2001. Despite a few issues – like some double mailings – the service worked well and saved Mayer time and money. But that company was sold to a larger corporation, which decided to cut smaller customers out of the mix, including …
