Planning to Take Advantage of Branch Closings

We’re hearing from a number of sources that a number of the national chains, specifically Graybar, WESCO and Rexel (and possibly more) are selectively closing branches, primarily in what one manufacturer calls the “sand states” (Southwest / West Coast). This is an effort to prune unprofitable locations. In some of these instances these companies are also selectively reducing headcount and / or consolidating inventory (in RDCs) well as “rationalizing” their supplier base (which also means they want to return more product (reduce inventory) and see what else they can get from manufacturers. Interestingly, haven’t heard much regarding Crescent and Gexpro.

What does it mean? Sounds like independents in these areas are either 1) suffering very badly or 2) some are taking share from the nationals. This could also represent an opportunity for distributors who have cash to stockpile good talent, enabling them to profitably sell their way to a recovery.

Word in multiple construction industries we work in is that the business is “stabilizing”, or, in some cases, there is a “smidgen” of an uptick in some local markets. At least we’re not in freefall. The electrical industry historically lags the economy, so prepare for slow improvement.

If financially you can afford it, now is the time to plan your recovery strategy (presuming you had already streamlined your organization). For those looking to take profitable share, now could be the time. Planning for 2010 is critical and should be started shortly after Labor Day (next week!) First step? Obtaining the voice of your customer.