Investing in their employees and local communities translates into success for Lumber Traders
Timber Central. That’s a simple definition of the Pacific Northwest, and an accurate one, too. Comprising Oregon and Washington, it encompasses two of the country’s largest timber-producing regions. On the northern edge of Washington’s Olympic Peninsula sits Port Angeles, a city of about 20,000 residents, and the home base of Lumber Traders, Inc.
A destination for the most discerning builders and DIYers in the state, Lumber Traders is a standard bearer with a mission to shape the communities they serve. Composed of Angeles Millwork & Lumber Co., Inc. and Hartnagel Building Supply, Inc. the firm has been a presence in the area since 1906, providing premium grade lumber and building materials,
Being a hyperlocal enterprise with a 116-year legacy and an unassailable reputation for excellence, means its profits are funneled back to the people who live and work in the area. “Our success stays in our community much more so than a big box store or something that's sending all their corporate profits out of the area would,” said company president and CEO, Danny Steiger.
A 20-year veteran of the building industry, Steiger joined the company in 2017 and was tapped to lead Lumber Traders when the company’s former CEO departed just two years later. “We really needed a major shift, and in many ways, it was a forced transition period,” he said.
“We had to take some time and reflect on and assess the areas where we were succeeding and the challenges that we were facing,” he continued. “In many ways, we shifted our decision-making process from financially-driven decisions to people-driven decisions.” One such decision, to become a 100 percent employee-owned company, had been made by the company’s previous owners.
The fully-funded ESOP was in place when Steiger took the reins in 2019, but most employees were unclear on how the model worked and how it would benefit them over time. By changing the structure of the valuation process to be more transparent and straightforward, he engaged the staff and rekindled their excitement. The move was followed by the development of training curriculums for new and existing staff.
Understanding the program further engaged employees in the business, leading to higher levels of efficiency, which leads to better share valuation. The employee-ownership builds stronger teams, and workers know that they are instrumental to the company’s success. “It's incredibly rewarding to be able to show them that profits aren't going to a single owner or CEO, but to every single one of them and their coworkers,” he said. “(the momentum) keeps building and it's contagious.” As a result, the company’s share price has increased 66% from 2019 to the present.
Taking the long view is often one of the challenges of the ESOP model; financial results aren’t evident on paychecks, so participants may find it difficult to recognize the program’s value. Steiger estimated that returns are often close to 20% of workers’ annual salaries, which compared to 401K and other retirement programs, with matches in the 2% to 5% range, is quite substantial.
Regarding a trend in the building supply industry of bigger players snapping up local shops from retiring owners, Steiger reflected, “We realize we’re just one voice in a consolidation frenzy but we feel we have one of the strongest stories to tell, and opportunities for other owners struggling with succession plans. We want to carry on the powerful legacy that our former owners have left and pay that forward to other owners looking to exit; to honor their legacy and take care of their employees through our ESOP.” Lumber Traders is actively looking to grow their business with acquisitions and sees this as an opportuniy for a win-win scenario, something Steiger is passionate about, “It’s really a win for owners, a win for their employees, and a win for our company.”
Getting Better All the Time
Their desire for continuous improvement runs as deep as their neighborhood roots. “While we have a rich history, we are very forward-thinking,” Steiger stressed. “We keep modernizing and pushing our operation forward through innovative systems and talented employees, working to meet customers where they are at in this time of incredible change in demographics and customer expectations.”
As part of that initiative, Lumber Traders streamlined their marketing and promotional efforts to reflect current and changing demographics and societal changes. They hired an IT manager and developer, investing in the technical skills and systems needed to keep them on a forward trajectory.
When they encountered difficulty in finding the ideal eCommerce solution, they began to develop their own proprietary software. They use multiple software platforms to track and service customer needs and maintain a flexible mindset when it comes to using platforms to meet the ever-changing needs of the business. Building supply technology from Epicor provides accurate reporting and forecasting that improves decision making and gives early visibility to any potential challenges and opportunities that arise.
“Overall, we found that we were only using a fraction of the functionality of our existing systems,” he said. “We’re investing in training to get the most out of the tools we already have.” One example of that approach can be found in their rental department. Recently they purged all of the old and overused machinery and replaced them with new ones, then purchased a new piece of property for a standalone rental building to be built in the coming months.
As a member of Do-it Best, member-owned hardware, lumber, and building materials cooperative based in Fort Wayne, Ind., Lumber Traders participated in a store refresh at each of their locations, adding $200,000 in additional inventory at each store over the past two years.
With revenues rising steadily – expected to increase 28 percent this year – they are also actively looking to grow not only through acquisitions but also adding synergistic departments such as Hartnagel Glassworks, which specializes in glass, window, skylight, door, glass shower enclosure, and railing installations and repair for residential and commercial customers.
Lumber Traders supports a plethora of non-profit organizations, including Habitat for Humanity and 4PA, an organization dedicated to addressing the needs of Port Angeles and its most vulnerable occupants. Lumber Traders is also active in local government, lobbying on behalf of builders and developers.
“When we succeed our community succeeds, and vice versa,” he concluded. “I'm a huge advocate for win-win situations because that's how you have long standing success. It's not one party taking advantage of the other or fighting between the two. It's a cooperative effort to build and that's really in our DNA.”
Lumber Traders Inc. is an employee-owned parent company that operates retail building material stores on the North Olympic Peninsula in Washington State. Our stores, Angeles Millwork & Lumber Co., Inc., and Hartnagel Building Supply, Inc., specialize in supplying quality building materials, hardware products, and home goods to homeowners, DIYers, and professional contractors. Separate and devoted internal departments cater easily to many different needs for our varied clients, while our employees are continuously trained to be courteous, knowledgeable, and problem solvers.
Our employee-owners are proud members of Clallam County and the larger communities of the Olympic Peninsula. We are regularly involved in efforts to fund, support, and participate in community endeavors with direct donations, sponsorships, and grassroots fundraising efforts..
Angeles Millwork & Lumber Co., Inc and Hartnagel Building Supply, Inc. serves its employees with a high level of benefits no local company can match. We provide employees with medical, dental and vision insurance, paid vacation, sick leave, bonus incentives, employee discounts, and an employee-owner retirement package. Our Employee Stock Ownership Plan (ESOP) is a superior retirement benefit rarely seen in companies. Its value can be assessed to be equal to a $2 - $4 an hour benefit with NO contribution by the employee ever required.
From the modest home to the large commercial project and everything in between, Angeles Millwork & Lumber Co., Inc and Hartnagel Building Supply, Inc. are the source for quality materials, project management and logistics, and the employees who partner with you to make it all happen smoothly.
3111 E Hwy 101
Port Angeles, WA 98362
Phone Number: 360.452.8933
Fax Number: 360.457.8896
Homepage Link: https://angelesmillwork.com/