Entrepreneurs of the year: 2018

Big family values drive Stine Lumber

Stine Lumber

LBM Journal Entrepreneur of the Year 2018

Sales Over $50 Million

Stine Owners
Left to right, Dennis Stine, Chief Executive Officer, Tim Stine, Chief Financial Officer, and David Stine, VP of Marketing and Merchandising
STINE PHOTOS BY: ROMERO & ROMERO PHOTOGRAPHY

Plenty of lumber dealers will tell you that they compete with the big boxes by doing what the big boxes don’t do— focusing on the pro builder and remodeler customer base. At Stine Lumber, the focus is indeed on the pro customer, but Stine is competing with the big box stores by tackling head on what the big boxes do best—serving DIY and retail customers.

The retail strategy has worked for the Sulphur, La.- based company that has grown from a single location in 1946 to its current lineup of 12 stores. Stine Lumber, this year’s LBM Journal Entrepreneur of the Year in the sales over $50 million category, is led by an ownership group of six brothers.

Dennis Stine is CEO, his brothers who remain involved in the day-to-day business operations include Tim, CFO, and David, VP of Marketing and Merchandising.

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An Entrepreneur of the Year award means a shared award for all involved. “I don’t assume for a moment that it’s possessive,” Dennis says. “It’s a team effort.”

The Stine brothers are second-generation owners of the company that was started by their father, JW Stine, and a boyhood friend right after World War II, where they were both combat pilots. JW bought out his partner in the early 1950s and began to serve retail customers. In the late 1960s, one of the older Stine brothers became involved with the business, and eventually Dennis and his twin brother, David, joined the ranks. Dennis is the fourth Stine son; his twin brother arrived nine minutes later. Then youngest brother, Tim, came along to round out the half-dozen boys in a family that also includes a sister.

“At one point, we had 10 employees and half of them were Stines,” Dennis Stine says.

Of course, with seven children, a good number of grandchildren are bound to get involved in the family business as well. Of the 30 grandkids, seven of them are now involved as third generation members of the business.

While that may seem like a large number of family members involved, Dennis Stine says the company has a perfect mix of family working among the total employees that range from 670 to 850, depending on the season.

“What we have is healthy,” he says. “We rely heavily on non-family and that’s a good thing.”

Stine Lumber
From left, Dowell Tate, Manager of Stine’s Sulphur, La. store, and David Bushnell, Pro Sales Director.
Stine appliance department
The appliance department at Stine in Sulphur.
Stine Home Builder & Pro Expo
Stine Home Builder and Pro Expo is an invitation-only event and full-scale product show for contractors and designers. Approximately 1,000 were in attendance at Stine’s first Expo held in 2015, and the event continues to be very successful.

GET TO KNOW STINE LUMBER

FOUNDED: 1946
OWNERSHIP: Family
LOCATIONS: 12
EMPLOYEES: 850 including seasonal
PURCHASING GROUPS:
Allied Building Stores
Ace Hardware
SOFTWARE SYSTEM: Epicor Falcon
TOP THREE VENDORS:
James Hardie
Owens Corning
YellaWood

Stine store location

One of those non-family members that the Stines rely on, especially when it comes to the LBM side of their business, is David Bushnell, the company’s Pro Sales Director. Since pro sales make up 40% of the company’s revenue mix, Bushnell’s role is pivotal. He manages a pro sales staff of 53 which includes 21 outside sales representatives. He also oversees the distribution side of the business.

Pro builder and remodeler customers have a separate entrance at each store, Stine says, which leads them to dedicated inside salespeople who can help them select items from the floor or direct them to the drive-through lumberyard. To make the shopping experience as simple and as quick as possible, pro customers can also drive through the yard, select their lumber and pay outside.

“We make it as easy as we can on the customer, whether they’re pro or consumer,” Stine says.

Even though Stine Lumber does a larger percentage of retail business than most lumberyards, at its core the company is a lumberyard with a showroom just like any other. Only at Stine, the showrooms are a lot bigger.

Dennis Stine says that because the company was early to expand into small towns in Louisiana, there weren’t big box stores to compete with. Without the competition, the Stine locations became a big box of sorts to the rural communities.

“We invested $55 million in building brand new large showrooms just a few years before the recession of 2007,” Stine says. The company made good use of advance depreciation on capital expenditures as part of the Gulf Opportunity Zone stimulus package after hurricanes Katrina and Rita in 2005. As a result, the Stines built two brand new stores and rebuilt three others.

Because of the investments prior to the Great Recession, Stine Lumber was able to fall back on retail and DIY revenue when the pro builder customers weren’t doing as much business.

“It’s a good strategy for us. I’m not convinced it would work everywhere, but it has worked for us. It gives us a balanced portfolio,” Stine says.

“After the recession, the fact that we were balanced meant we didn’t go through as difficult of a time as some of our friends in the industry.”

Of the company’s 12 locations, 10 are bigger box stores that are supported by advertising circulars ranging from six to 12 pages weekly. Some of the stores include 80,000 square-foot showrooms, 40,000 square-foot drive-through yards and 20,000 square-foot garden centers. The remaining two are smaller, one in a rural community and another that is a more conventional contractor-only lumberyard.

“We have a major asset in buildings and fixtures, not like most lumberyards,” Stine says. “On one hand, we committed to large amounts of capital and incurred debt to real estate projects. On the other hand, over time we have created large amounts of equity in real estate properties. That is a very strong distinction between us and other lumber dealers. We have a higher level of occupancy cost.”

With the distinct difference in retail and pro builder customers, Stine says the company’s success has been guided by the core values that have shaped the Stine family business over the years: Faith, family, community, integrity, passion, service, accountability and safety.

“The first three—faith, family and community—are formational. Our parents instilled these values in us, and they continue to be a guiding force in the company we are today. The last five are about who we strive to be every day.”

The company has learned, Stine says, that the difference between retail and pro is the difference between details and relationships.

“Retail is detail,” he says. “Pro is all about relationships.”

The company continually runs analysis of both operations. Stine predicts a steady increase in revenue on each side in the coming years. “It’s healthy to take on more retail after a crisis. It’s healthy to expand your showroom to include more than LBM products,” Stine says. “It strengthens margins and balances the portfolio. In another decline, you’ll still be doing business with repair, rental and DIY customers.”

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