84 Lumber: Two years later

I've only once before posted anything about 84 Lumber, and it was almost exactly two years ago -- on April 4, 2006 I posted this:

84 Lumber closing/opening stores

84 Lumber announced that they're closing 67 stores, but planning to open 125 others.

Stores in “no-growth” and rural markets will be closed, as the company tries to boost its annual sales to $10 billion by the end of 2009, 84 Lumber said in a statement.

The company had 521 stores and reported sales of nearly $4 billion in 2005.

“We determined that we needed to make some tough decisions regarding underperforming store and close them,” said company president Maggie Hardy Magerko.

84 markets exclusively to contractors and professionals, a segment that Home Depot has been targeting lately, including making significant acquisitions.

It's not much of an anniversary present, but now we have this item:

84 Lumber Co. said Monday it is closing another 30 stores across the country, citing the slumping housing market. [ ... ]

Last month, 84 Lumber consolidated nine stores into other facilities.

84 Lumber has 368 stores and 13 manufacturing facilities in 37 states. Several stores and plants are "mothballed" and will reopen when conditions allow, the company said.

I don't doubt that the poor housing market is having an effect, but let's do the math: Two years ago, when the housing market was still strong, they had 521 stores and said they were closing 67, but opening 125, which would bring them to 579. But now they have 368 and are closing 30. Most of those missing 150-200 stores must have been lost before the housing market went bad.

It's no mystery, of course: the problem isn't the housing market, the problem is Home Depot and Lowe's, and the two-per-channel theory.