American Standard Brands CEO Don Devine pointed to positive longer-terms trends as good signs among an otherwise down housing market.

Don Devine, CEO of American Standard Brands, answers a question from an SWA member.

American Standard BrandsCEODon Devinepointed to positive longer-terms trends as good signs among an otherwise down housing market when he addressed the Southern Wholesalers Association convention June 29 in Hilton Head, SC.

These include an aging housing stock that will drive remodeling and maintenance purchases. People also are viewing home improvements as a way to make their lifestyles more comfortable instead of as an investment to increase the value of their property.

Population growth is another positive indicator, he said. Immigration and the echo boom generation, which is larger than the baby boom generation, will lead to 12.5 million new households between 2010 and 2020.

Plumbing wholesalers must position themselves to take advantage of these positive trends. While supply houses remain plumbing contractors’ top spot to purchase products, their market share is declining, Devine said.

His advice to SWA members included:
  • Capture the maximum value of each transaction by knowing what the end users need and giving them products that meet those needs.

  • Take the time to sell up in this economy; sales won’t change demand.

  • Upgrade and train employees because knowledge is a competitive advantage.

  • Right-size the company for profitability by lowering fixed costs when sales volume is down.
“You have to get in front of the downturn in terms of cost,” Devine said. “You can always add capacity. You can never recover lost margin dollars. They never come back.”