The area's five Stock Building Supply stores are slated to close June 30, leaving about 100 people without work, a local employee said Thursday.
Stock is in Chapter 11 bankruptcy and has announced that an affiliate of The Gores Group has bought 51 percent of its business. The stores are in Oneonta, Sidney, Richmondville, Roxbury and Walton.
The employee, who requested anonymity because he wasn't authorized to speak for the firm, said the companies involved hadn't given specific reasons for closing area stores.
However, the cause isn't underperformance by local stores, he said, because stores in rural areas are making money.
One possible reason, he said, is the locations don't ``fit the mold'' of the entity buying a majority share in Stock Building Supply.
``We're not closing because the economy is bad,'' he said. ``We've built up a tremendous customer base.''
The local stores would be available for sale, the employee said, but it isn't clear if any interest exists or is being developed.
In May 2004, Stock Building Supply bought Bellevue Builders Supply on state Route 7 in Oneonta, the same year The Home Depot came to Oneonta. Bellevue, which started in 1936, its website said previously, had stores in Walton, Sidney, Richmondville, Roxbury and Oneonta.
In 2005, Lowe's announced plans to open a building-supply store in Oneonta, and it has a location on state Route 23.
Stock Building Supply, of Raleigh, N.C., is a supplier of building materials to professional home builders and contractors. Stock operates about 200 stores in 27 states with reported sales of $3.5 billion for fiscal year 2008, according to media releases.
Katie Cralle, spokeswoman for Stock Building Supply, said the company isn't confirming plans for its stores.
In a prepared statement issued Thursday, she said: "The transaction with The Gores Group does not affect the fundamentals of our industry. Stock senior management has presented The Gores Group with a financial plan, which requires us to take the hard actions this housing downturn dictates.
``As part of this plan, we will be exiting or reducing capacity in some markets," the statement continued. "In the coming days and weeks, Stock will be determining the best way to exit these locations, which may involve either a sale or orderly wind down of the operations.
"As this is an ongoing process, we are not confirming the sites with which we are currently having discussions," the statement said.
On May 8, U.S. Bankruptcy Court of Delaware approved Stock's first-day Chapter 11 filings, according to a media release from the firm.
Bankruptcy Judge Mary F. Walrath granted approval for Stock to honor current and future customer obligations, continue employee wage and benefits programs and continue payment of all pre-petition claims in the ordinary course of business.
Two days earlier, Stock Building Supply Holdings, a Wolseley company, announced that 51 percent of the company had been acquired from Wolseley by an affiliate of The Gores Group, headquartered in Los Angeles.
As part of the transaction, Gores has committed to invest $75 million in the company and provide a $125 million revolving credit bridge facility, the release said.
Gores' investment was conditioned upon completion of a voluntary, prepackaged Chapter 11 process expected to last 45 to 60 days.
The bankruptcy provides Stock with the flexibility to shed the company's operations associated with its closed locations and underperforming markets, as well as inject fresh, needed capital, the May 6 release from Stock said.
The Gores Group, founded in 1987, is a private equity firm. Wolseley, listed on the London Stock Exchange, is a distributor of plumbing and heating products and a supplier of building materials.
"Executing a joint-venture agreement with Gores and completing this recapitalization will allow Stock to emerge financially stronger from this economic down cycle," said Chip Hornsby, group chief executive officer of Wolseley, said in the release.
