Wolseley is taking further drastic action in its US building materials supply business to stem big losses caused by the decline in housebuilding.
The group will reduce branch numbers in its Stock US merchant business by 86 to 209, exiting 16 markets in six states, leading to 3,000 job losses. Stock recorded a trading loss of US$246m in the year ended July 31 2008 on sales of US$3.4bn.
Some 10,600 Stock employees (55% of total) have now been made redundant since 2006. Seventy branches had been closed in earlier cuts.
Wolseley had considered selling Stock, forming a joint venture with another party, or closing the business. But it decided further restructuring was the best choice to benefit from a future market recovery.
The group believes that significant overcapacity will continue to affect the building materials distribution industry for the forseeable future.
“The measures we are taking will move us back towards profitability, while still keeping a presence in key districts for when the market recovers,” said group chief executive Chip Hornsby.
