Ply Mart to close
Ply Mart, the Norcross, Ga.-based pro dealer, is closing down its operations after struggling with declining housing starts in the Atlanta market. Randy Mahaffey, Ply Mart’s chairman, told Home Channel News that the company is in negotiations to sell its installed sales and stair manufacturing divisions. Its four remaining lumberyards will be closed, Mahaffey said. “We’re selling off our inventory,” he added.
Ply Mart was one of the Southeast’s largest LBM players before the downturn, pulling in $335 million in revenues in 2006, when it operated 14 units in Georgia, North Carolina and South Carolina.
The housing market slowdown hit Atlanta and the Carolinas late, but unfortunately, it still arrived. Housing permits have declined 25 percent in Atlanta, Ply Mart’s primary market, since August of 2007, according to Mahaffey.
“It fell off a cliff in September,” he said. “It was an absolute free fall.”
During the last 18 months, the company’s accounts receivables ballooned to $20 million. Ply Mart began reducing staff and mothballing lumberyards, and members of the Mahaffey family began pumping their own money into the company to keep it afloat. But it wasn’t enough.
“Every time we made a cut, we thought we were where we needed to be,” Mahaffey said. “But we were still bleeding. We just couldn’t cut expenses as fast as our revenues were dropping.”
Mahaffey said he did not consider selling the business to one of the national LBM chains; nor were there any real offers forthcoming. “The market is so bad in Atlanta, everybody is taking a whipping,” he observed. “It is not the time to buy in this segment.”
Earlier this year, Wheeler’s Building Materials, another privately owned pro dealer based in Atlanta, filed for Chapter 11 bankruptcy protection. The company’s owners bought three of the chain’s original 17 lumberyards at auction in April. Last February, ProBuild bought Jasper Lumber, a small independent with three locations in the Atlanta area.