Download the 2010 Replacement 100 list (PDF).
It must have seemed to the Magdens that their timing was seriously off. In 2006 brothers Harley and Aaron Magden, marketing and sales managers, respectively, at Regency Windows, in Cleveland, left the company founded by their father, Mike, and for six months considered different business options, home improvement among them. "We felt," Harley says, "that the window business and the home improvement business would be stronger than other businesses." They had a non-compete agreement with Regency Windows keeping them out of Cleveland, so they chose a company name, Window Nation, and opened in Baltimore, reasoning that the Beltway had the right housing stock (older) and a surfeit of government jobs. Today the company has four locations.
Biggest of the Biggest
Window Nation is the new blood of recent additions to Replacement Contractor's list of the 100 largest companies in the home improvement industry, which includes roofing, siding, and window firms as well as those that do short-cycle jobs inside the house, such as kitchen cabinet refacing, bath liners, and basement waterproofing, as well as decks.
In 2009, the total revenue for residential remodeling for the 100 companies on the list was $2.2 billion, with the largest ? Window World, based in North Wilkesboro, N.C. ? posting 2009 revenue of $373 million. Two years ago, low-price marketer Window World clambered to the top of the Replacement 100 as the company steadily expanded both unit and dollar sales. It remains the largest home improvement company in the U.S., having held its own through the recession ? unlike some other companies, a few of which are gone altogether.
Window World CEO Blair Ingle acknowledges that his company's price-point strategy ? its famous "$189 window" ? hasn't hurt at a time when consumers are watching their pennies. "I think we have a natural advantage," Ingle says, "but that's no guarantee of success." What's suddenly become a nation of penny-pinchers obviously likes the idea of paying less for windows. For 2010, Ingle expects the company to be up at least 15% in units and dollars, depending on the outcome of the fall selling season.
A number of home improvement contractors, such as Brookhaven, Pa., company Power Windows & Siding ? which vaulted from No. 23 on the 2008 list to No. 4 this year ? have found the recessionary economy fertile ground for their marketing and selling efforts. And then, sometimes, nature intercedes. For instance, this June a hailstorm 80 miles long and 30 miles wide swept through southern Minnesota. As a result, says Dale Brenke, owner of Schmidt Siding & Window Co., in Mankato, "we are absolutely buried in work."
Stimulus to Sales
It wasn't long ago ? the fall of 2008 ? that Brenke was watching his business, along with the rest of the economy, slow to a crawl. The phone stopped ringing. Leads grew scarce. Schmidt Siding & Window Co. saw sales drop in 2009 over the prior year. That drop might have been bigger were it not for the American Recovery and Reinvestment Act (ARRA), which created tax rebates for energy-efficient home improvements. That boosted Schmidt Siding's sales of windows, doors, and steel roofing about 25% last year. Brenke's guess is that the recent hailstorm will likely push top-line sales this year to more than $8 million from $5.7 million in 2009.
Windows have been the product to benefit most from ARRA tax credits. In 2009, for instance, George J. Grove & Son, a company in Lancaster, Pa., carrying and installing a full range of home improvement items, had the biggest sales increase since it was founded 47 years ago, says second-generation owner George Grove. Sales of windows and doors, Grove says, gave his company a double-digit increase over 2008 and "really carried us through the whole recession." Grove's fondest wish is that Congress would extend the tax rebates until 2012.
He's not alone in that. The stimulus benefited Window Nation as well, and offers the lesson that government largesse ? intended to boost the economy, employment, and energy efficiency ? is most useful to those who know how to market it. "It gave us a lot of talking points that we didn't have," says Joe Percario, owner of Joe Percario General Contractors, a New Jersey company that mixes large-scale remodeling jobs such as kitchens and additions with the roofing, siding, and window projects that are its bread and butter.
For Percario's company, tax rebates became a theme at events and in the company's cable TV advertising. They remain a valuable marketing and closing tool.
