Seigle’s Home and Building Centers, Inc.

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Seigle’s Home and Building Centers, Inc.

1331 Davis Road
Elgin, Illinois 60123
U.S.A.
Telephone: (847)742-2000
Fax: (847)697-6521
Web site: http://www.seigles.com

Private Company
Incorporated: 1952
Employees: 700
Sales: $196 million (2000 est.)
NAIC: 444190 Home Centers; 444190 Other Building Material Dealers

Seigle’s Home and Building Centers, Inc.—with six retail showrooms, four lumberyards, three manufacturing plants, and five distribution centers—is ranked among the top 50 building suppliers in the United States. The company is based in Elgin, Illinois, some 40 miles west of Chicago, where it was founded over 100 years ago as a lumberyard. Serving the Chicagoland area, Seigle’s attributes its success to working with homebuilders and remodelers to ensure their success as well as to the ongoing relationships the Seigle’s sales force develops with contractors.

19th Century Origins

Although not incorporated until 1952, the history of Seigle’s may be traced to 1881, when the Elgin Lumber Company started up as a supplier to the building and carpentry trades. The company was founded by an assortment of leading businessmen in the Elgin, Illinois, area, led by the Borden family of dairy renown. At the time, a lumber company in Elgin stood to prosper, as the city’s population boomed, property values escalated, and the building of brick structures to replace the wooden ones commenced.

During the depression era of the 1930s, Elgin Lumber suffered downturns along with many other businesses. As recovery began, at the onset of World War II, lifelong Elgin resident Harold T. Seigle and a partner pooled their money in order to purchase what was then known as the Elgin Lumber & Supply Company in 1942. The partnership incorporated as Seigle’s in 1952 in a postwar period favorable to building and home improvements.

As a supplier to the construction industry, the company prospered, and in 1961 Seigle’s opened its first retail center, Elgin Wholesale (later renamed Seigle’s McBride Street Center). The outlet was intended to serve the growing do-it-yourself market, and toward that end the company offered cabinets, fixtures, garage doors, and plumbing and electrical supplies, as well as lumber. The growing demand for such components as pre-hung doors led Seigle’s to open its own Millwork Center in 1967 for the manufacture of components.

Seigle family leadership at the company was bolstered in 1974, when Harry J. Seigle joined his father’s business. The younger Seigle had spent summers during his youth working for his father at the lumberyard, loading and unloading boxcars and doing other labor-intensive duties. After high school, he attended college, ultimately earning a degree in law and setting out to practice as an attorney in Chicago. Soon, however, he returned to Elgin, deciding he was better suited for a career in business, specifically in sales at Seigle’s. His arrival at Seigle’s would mark the beginning of a period of remarkable changes for the company.

Increased Competition in the 1970s–80s

In the early 1970s, though it had begun to offer a more diverse product line, Seigle’s was still best known as a traditional lumberyard, and competition was beginning to heat up from a new concept in the industry: the home center. Given the escalating costs of having professionals build or remodel a home, hardware stores had begun to target a do-it-yourself market more intent on larger construction projects. The resultant home center offered modern showroom facilities stocked with windows, doors, cabinetry, and other necessities for home-building, along with the tools with which to accomplish the job. Since profit margins on the sale of lumber and building materials alone were very low, Seigle’s future was seriously threatened. To remain a traditional lumberyard in the competitive climate might just be the ruin of the company. Thus, Seigle’s prepared to enter the home center market.

In 1975, Seigle’s moved outside of Elgin for the first time, opening a retail outlet in nearby St. Charles, Illinois. The new 30,000-square-foot facility was a building center and showroom serving contractors and do-it-yourselfers alike.

Throughout many sectors of the retail industry, the 1980s gave rise to the superstore; suddenly lumberyards and home centers began losing business as contractors and homeowners did their one-stop shopping at such national chains as Home Depot and Builders Square, companies that could realize large economies of scale.

At Seigle’s, the early 1980s were characterized by expansion and an aggressive attempt to be the region’s premier superstore, or “category killer” as the retail concept was known. In 1983, Seigle’s Millwork Center manufacturing operation moved into larger facilities in Elgin. Adjacent to the Millwork Center a new corporate headquarters was built, allowing Seigle’s to centralize its financial, advertising, human resources, and executive staff. Also that year the company made its first acquisition, purchasing the Globe Building Materials Company of Aurora, Illinois, and renaming it Seigle’s Aurora Center.

Harry Seigle’s younger brother Mark joined the business during this time. The company was now completely family-owned, as the Seigles revised the partnership agreement and acquired all Seigle’s stock. In 1984 the company was renamed Seigle’s Home & Building Centers to more accurately reflect its commitment to both contractors and homeowners, as well as its intentions of competing with the superstore chains. The company’s third retail store was opened two years later, serving the west side of Elgin, where land development was burgeoning. During this time, Harold Seigle retired, leaving the day-to-day operations of a growing chain to his sons.

Building a Future: 1990s and Beyond

By 1990, Seigle’s was reporting record growth. In Mundelein, northwest of Chicago, the company opened a new Seigle’s Center. In Chicago proper, Seigle’s made another acquisition, purchasing the Anzalone Building Center and converting it into a Seigle’s Center. Sales at Seigle’s continued to meet or exceed expectations.

The age difference between Harry and Mark Seigle (11 years) allowed both brothers a turn at running the company. In 1995, Mark stepped up from his roles as vice-president and secretary to take over as president, while brother Harry became the company’s chairman. Mark focused on the overall operation of Seigle’s, while Harry concentrated on contractor relationships and developing new business. The management team was rounded out by a vice-president of operations and directors for the manufacturing and sales arms. The family business in 1994 realized about $151 million in annual sales, an increase of ten percent over 1993 figures.

Expansion continued apace. In order to liquidate damaged items and obsolete product lines, Seigle’s opened an Outlet Center in Aurora. Soon thereafter another retail center was opened in Chicago. This Seigle’s Building Center, well placed in a popular north side shopping district, offered the successful lines of Aristokraft cabinetry and Seigle’s own millwork. The company also built a new component manufacturing facility in Hampshire during this time.

Having successfully widened its scope to include the do-it-yourselfer (even reportedly remodeling some stores to appeal more to women), but facing the very real market dominance of Home Depot and Lowe’s in the mid- and late 1990s, Seigle’s began to shift its focus to its original core customer, the professional builder. With the shift, however, the company left itself more vulnerable to the building boom/bust cycle. To counteract that challenge, Seigle’s continued to expand its territory in Illinois and also enhanced the value of services it offered professionals.

Toward that end, Seigle’s initiated several programs and traditions. In addition to annual holiday parties and golf outings for customers, Seigle’s developed the Level Express program, aimed at helping builders save time and money. Specifically, Level Express allowed builders use of in-store phones, faxes, and copiers, to facilitate their business; moreover builders could pre-order materials, receive special discounts, and attend seminars at which they could learn more about products and industry innovations.

In order to attract and retain remodelers’ business, Seigle’s began the Level Express II program, which offered many of the same services to remodelers that were offered to homebuilders. For these smaller contractors, Seigle’s offered general educational seminars on such topics as business management, to help them with sales, finances, marketing, and legal issues. Finally, Seigle’s provided smaller contractors easy credit terms of 30 days with no interest, an offer unique in the industry.

Seigle’s continued expanding through acquisitions in the late 1990s, its growth driven by a good economy and the subsequent increase in demands for new housing and remodeling. The company purchased another millworks, DuPage Millwork, in 1999, and by the year 2000 had opened another showroom Naperville/Aurora, while also doubling the size of both its Hampshire manufacturing plant and its Millwork Distribution center.

Company Perspectives:

Our corporate purpose is to serve professional contractors and homeowners as Chicagoland’s preeminent quality source for a broad variety of building products and services provided by specialists.

The company also began pioneering efforts to bring greater numbers from the building industry into the computer age. Through software designed by its Enterprise Computer Systems company, Seigle’s offered vendors and builders the opportunity to process their transactions electronically. Confidant that the industry would more fully embrace technology and e-commerce, Seigle’s worked toward offering vendors and builders the opportunity to send blueprints and specs electronically and thereby help the company meet the customers’ needs more quickly.

In the late 1990s, Seigle’s reorganized its growing enterprise. Under the new plan, the company maintained five retail home centers, three manufacturing plants, and five distribution facilities. The manufacturing and distribution plants—for Seigle’s pre-hung doors, trusses, windows, and cabinets—hired and trained their own sales forces. While this involved considerable time and work, it also allowed Seigle’s to send specially-trained, knowledgeable salespeople to work directly with contractors and homebuilders. Selling directly to builders from the centers, instead of through the retail centers, gained market share in the Chicago area for Seigle’s.

In 1998, company founder Harold Seigle died at the age of 89 after suffering a stroke. According to his obituary in the Chicago Daily Herald, Harry Seigle regarded his father’s major business strength as his emphasis on customer service as well as his having created a corporate culture based on professionalism and respect. Indeed, Seigle’s had invested heavily in developing a sales force that maintained excellent customer relations via expertise in Seigle products as well as building design in general. Seigle’s Chicago Sales Group, for example, focused on the unique problems and challenges of building and rehabbing in an urban environment. Knowledge of building codes, tastes of city dwellers, and what was selling well in which neighborhoods marked the group’s success.

In 2000, Seigle’s purchased EVCO Windows, the largest supplier of wood windows in the Chicago area. In February of the following year, the company opened it’s sixth kitchen and millwork showroom store, in Morton Grove, Illinois. The company felt that with that opening it had gained complete coverage of Chicago and the surrounding suburbs. Sales in 2000 reached $196 million, an increase of 3 percent over the previous year and an impressive figure given intensifying competition for market share in the Chicago area.

Looking to the future, Seigle’s management acknowledged that remaining privately-held did limit the company’s financial resources somewhat. However, it maintained, by staying small, the company could better connect with the customers and thereby develop more valuable long-term relationships. In 2001 Seigle’s celebrated its 120th year in business, and its plans to grow through acquisition lived on.