British parent to 'dispose of' Stock Building Supply by Aug. 1
Posted March 6, 2009 10:40 a.m. EST
Updated March 6, 2009 5:28 p.m. EST
Raleigh, N.C. — United Kingdom-based Wolseley Group will sell its Raleigh-based Stock Building Supply subsidiary, the chief executive officer of the firm said Friday in London.
“This time, we have made a decision,” CEO Chip Hornsby told The Times of London.
“We will exit the business. It will not just be a review,” he added. “Despite an aggressive cost-reduction program, the business is still loss-making. Housing starts fell below 500,000 in January, on an annualized basis, and are unlikely to get above 1 million in the next three years.”
In a statement, Stock said Wolseley would “pursue a sale or joint venture, or to dispose of or otherwise exit Stock Building Supply, by Aug. 1.”
The decision to sell Stock is part of a recapitalization plan by Wolseley.
Stock is already seeking a buyer, according to Denise Waters, manager of corporate communications.
“A number of third parties have recently expressed an interest in the possibility of acquiring all or part of the Stock business,” she told WRAL.com. “It is Wolseley’s preference to structure a deal that enables associates and shareholders to benefit in the long-term potential of the business, such as a joint venture. The decline in housing starts, coupled with a continued decline in lumber prices have expedited Wolseley’s decision to pursue a sale or joint venture, or to otherwise exit Stock. ..."
Stock employs some 1,400 people in North Carolina, including 930 in the Triangle, according to Waters. The company has been cutting jobs and closing operations in recent months as the U.S. economy slowed and the housing market crashed.
In Raleigh, Stock President Joe Appelmann said his management group would seek “potential partners.”
“We are working very closely with Wolseley to identify potential partners that can help Stock Building Supply grow when the market recovers,” Appelmann said in a statement. “Our business model has fundamental differences from the remainder of Wolseley’s portfolio, and in these economic times, it makes sense to explore other options.”