Hardware Distribution Warehouses Inc., the Marshall, Texas-based distributor of hardware and building material products that services more than 2,000 retailers in the Mid-South, is closing down both of its distribution centers.
The company’s Marshall distribution center is currently undergoing a liquidation sale. A liquidation of the company’s Greenwood, Miss., distribution center will follow.
A statement on the company’s website reads: “As most of you are aware HDW has been in negotiations in an attempt to sell either of our warehouse locations and continue to service your needs. Unfortunately, no deal has been made and we are forced to close both facilities as of today (Jan. 4).”
The moves come less than two months after HDW replaced its president. Billy Stapleton, a veteran merchandising executive for the company, took over from Kenneth R. Beauvais in early November.
At the time, the company announced that it was hopeful HDW “will continue to move forward.”
In 2016 under CEO Beauvais, HDW acquired the Houston-based distributor formerly known as Handy Hardware. It later combined the operations of its distribution centers in Shreveport, La., and Houston, Texas into a single facility in Marshall, Texas, where it set up its headquarters. It was during this stretch that company fell victim to mismanagement and over-extension, according to HDW VP of corporate communications Jimmy Horne.
Horne, who continues to work with a skeleton crew in the HDW Marshall facility, said fulfillment rates fell from about 95% to about 55% after the company moved to consolidate some of its operations in Marshall. “In February, we thought we were in a lot of trouble,” he told HBSDealer. Consultants were called in, as was the trustee of the company’s Employee Stock Ownership Plan. And eventually, Beauvais was forced to resign, Horne said.
Beauvais could not be reached for comment.
After Beauvais’s departure, Horne said there was about a 50-50 shot of digging the company out from its financial troubles. “We were trying to save as many jobs as we could,” Horne said.
The company tried to sell its operations. It was in talks with House-Hasson Hardware, but those didn’t get far. Florida Hardware also showed interest, but that deal fell through when HDW ran out of time and money to pay its sales reps. “Our sales force was the key to anyone wanting to buy us, because of their knowledge and their relationships,” Horne said. “When they were let go, everything kind of fell apart.”
Since then, according to Horne, many of the HDW sales force have been picked up by competing distributors, including Orgill, House Hasson Hardware and Southern Hardware.
HDW distribution center workers received some good news over the weekend. According to an article in the Greenwood Commonwealth newspaper, Milwaukee Tool stepped in and announced it would hire 54 workers out of the HDW distribution center in Greenwood, where Milwaukee Tool has a growing presence.
Many others in the company, including Horne, face uncertain employment.
HDW is a product of multiple mergers in the hardware distribution industry. It was formed in 1994 with the combination of three companies: South States, Inc. of Shreveport, La.; Henderson & Baird Company, Greenwood, Miss.; and Higginbotham-Pearlstone Hardware Company, Dallas, Texas. That combined entity took on the name of “South States,” and later changed to HDW.