Stock Building Supply's parent weighs sale

Sep 24, 2008 (The News & Observer - McClatchy-Tribune News Service via COMTEX) -- WOSLY | Quote | Chart | News | PowerRating -- Sep. 24--Hammered by the U.S. housing slump, the British parent of Raleigh-based Stock Building Supply is considering whether to sell the struggling division.

Wolseley Plc announced Monday that it is conducting a "fundamental review" of its Stock business. Options could include slashing more jobs, closing additional branches or finding a buyer, officials said. The company expects to provide an update of its review at an annual investor meeting Nov. 18.

During the past two years, Stock has cut thousands of jobs to reduce costs as sales declined. The company now has about 12,000 employees, including 1,100 in the Triangle.

"The U.S. housing market will continue to be challenging" in 2009, Stock President Joe Appelmann said in a statement. "We will position ourselves to not only survive the downturn but to take advantage of the upturn when conditions improve."

Founded as Carolina Builders in 1922, Stock was acquired by Wolseley in 1986. The company sells and installs housing products such as roofs, windows, wall panels, decks, cabinets and insulation.

Stock had 285 branches as of July 31, the end of its fiscal year. At the beginning of 2007, after an acquisition spree that gobbled up a number of smaller building-supply companies across the country, Stock had 314 branches. The company now has 62 in North Carolina, according to its Web site.

During the most recent fiscal year, Stock's revenue fell 24.5 percent to $3.47 billion. It lost $246 million during the period.

Given the drag Stock is causing on Wolseley's financial results, selling the division would help boost the parent company's stock price, Kevin Lapwood, an analyst with Seymour Pierce in London, told Bloomberg News.

"Stock faces an uphill battle," Wolseley CEO Chip Hornsby said during a conference call with investors and analysts. "We cannot continue with the loss we're experiencing today. The losses at Stock mask strong performances elsewhere in the business."

Wolseley gets about half its sales from the United States. The company traces its roots to 1887 when Frederick Wolseley founded the Wolseley Sheep Shearing Machine Co. in Australia.

The company also is reviewing the future of its Ferguson plumbing division, which has its headquarters in Virginia.

"We will continue to review all North American operating companies and will adjust to market conditions where appropriate," said Wolseley spokeswoman Amanda Wroten.

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