Hoping to build a strong foundation for tomorrow

Supply businesses adapt to survive the construction vacuum

BY MAT BOES of the VBJ

Aside from library buildings and federally-funded infrastructure projects, the once-common construction yard sounds - thumping jackhammers, whirring buzz-saws and roaring Bobcats - have largely fallen silent in Clark County.

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But developers, contractors and construction workers aren't the only ones taking a hit from the recession. Stores offering construction equipment for sale or rent, such as S & I Equipment in Battle Ground and Parkrose Hardware in Vancouver, have also been shaken in the recession's wake.

And while these two businesses were similarly impacted by the downturn, their paths out of the slump depended largely on decisions made months earlier.

S & I, founded by Irv Williams in 1979, had always performed well at their 4,000-square-foot location on 219th Street, according to business partner Rod Hackney. With 19 years of experience, Hackney has watched a shift in his business away from exclusively construction equipment purchases and rentals to a focus on homeowners.

Despite S & I's diversified client base, Hackney said the fallout in construction severely impacted their business by hitting not only their rental side, but also the typical items first-time homeowners would come in to buy Hackney said.

Hackney said he was shocked at the recession's impact, with his profit dropping 10 percent between 2008 and 2009. "I think about how far this thing has regressed; nobody saw that coming," he said.

General spending was cut, as was S & I's workforce, dropping from eight fulltime employees in Sep. 2009 to four. Hackney hopes business will improve, but expects 2010 to be more of the same.

However, there have been a few bright spots: for example, logging has picked up and a few Battle Ground companies have been awarded government contracts, which should be enough to keep S & I going in the months ahead, according to Hackney.

"It's nice to be small enough to take advantage of those little things, sometimes," he said.

Meanwhile in Vancouver, Parkrose Hardware CEO Michael Nelson has taken a different approach to handling the recession. "When the economy got down, we got more aggressive," he said.

Parkrose's proactive stance included a September 2009 remodel of their East Vancouver store and more local advertising. Though the measures have cut into the company's bottom-line, Nelson said, they have already netted results. According to Nelson, profit is only down 1 percent from 2008, with 2009 actually seeing more customers walk through the doors of the 2nd Street location over the previous year, albeit by a small six-tenths of a percent.

"We try not to be stupid, but I've read research that says people who invest in recessions grow exponentially over the next five years. And people who don't - their growth is miniscule," Nelson said.

Parkrose also has a location in Northeast Portland which was harder-hit by the downturn in construction, according to Nelson.

However, the Vancouver store, with more of a home and garden focus, has benefited from the "staycation" phenomenon, described by Nelson as a trend towards people staying home and spending more time renovating their property.

To gain more business, Nelson plans to focus more on home and garden sales rather than construction equipment sales and rentals to builders and new homeowners. "Changes like that make our margins small as far as profit, but it also ensures we don't become trendy and lose everything for times like this," he said.

Parkrose Hardware, Vancouver and Portland

Year founded: 1948

Number of employees: 10 fulltime

Revenue 2009: N/A

S & I Equipment, Battle Ground

Year founded: 1979

Number of employees: 4 fulltime

Revenue 2009: N/A

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