Stock Building Supply, America's second-biggest LBM operation, confirmed to ProSales today that it will close its Phoenix operations, effectively exiting the Arizona market.
A total of 123 workers will be affected, Stock said in a filing with Arizona's Department of Economic Security. According to Stock's Web site, there are five facilities in Phoenix--a lumberyard, a framing shop, a door and trim operation, a concrete facility, and a commercial and custom division--all within a block of each other.
Stock, a Raleigh, N.C.-based unit of Britain's Wolseley Plc, announced Oct. 23 that it will close 86 branches, lay off 3,000 workers and exit 16 markets, leaving it at little more than half the size it was at the market's peak. To date, it has only released a partial list of where it would close; many other closings came to light via press reports later confirmed by Stock.
On Nov. 18, Wolseley reported that Stock incurred an operating loss of around $60 million in its fiscal first quarter ended Oct. 31. That operating loss came on a 20% decline in sales and was 10 times worse than it posted in the year-earlier quarter.
Stock gets two-thirds (last year it was three-quarters) of its revenue from new home sales, so over the years it has invested in markets like Phoenix, which according to a Builder magazine study ranked fourth among all U.S. metro areas last year in the number of building permits issued. Meanwhile, the Tucson, Ariz., market ranked 50th in the same study.
But Arizona also has one of the weakest markets in the country today. According to RealtyTrac, Arizona in November had the nation's third-highest rate of foreclosure filings, at one filing per 198 housing units. The number of foreclosure filings in November was 128% higher than the same month last year, RealtryTrac said.
Stock ranks No. 2 on the 2008 ProSales 100 list of America's largest LBM operations, with sales of $4.71 billion in 2007, 94% of them to pros.