84 Lumber inks financing deal to weather housing downturn

Industrial Distribution staff -- Industrial Distribution, 4/23/2008 8:52:00 AM

84 Lumber inked a pair of financing deals with Sun Trust Bank and Wachovia for a total of $590 million, in an attempt to weather the housing downturn that’s forced it to shutter a number of branches, the Home Channel News Web site reported.

“This deal allows us to move forward with our business plan without earnings covenants,” president and owner Maggie Hardy Magerko told the site. “Our plan is to emerge from the housing slump debt-free by eliminating unprofitable stores, reducing slow-moving inventory, increasing vendor terms, reducing overhead and improving our accounts receivable aging while focusing on increasing market share in our core markets nationwide.”

The Eighty Four, Pa.-based building materials distributor has closed 52 stores since January, many of which were consolidated into larger operations nearby. Sales slid 24 percent last year, slightly ahead of the 27 percent decline in 2007 housing starts.

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