Case Studies

F.S. VanHoose & Company Inc.

Serving the eastern Kentucky lumber market for over 100 years

Founded in 1910, F.S. VanHoose & Company Inc. (FSVH) is a storied lumber and building supply dealer serving customers throughout eastern Kentucky coal country from its headquarters in Paintsville and satellite office in Prestonburg.

FSVH carries a complete line of framing lumber, pressure-treated lumber, oriented strand board (OSB) and plywood, as well as exterior siding in vinyl, cement, wood vertical, cedar and log form.

The company’s stock of building supplies includes: interior and exterior doors, windows, roofing materials, insulation and drywall in addition to an array of plumbing and electrical supplies and hardware, making FSVH a one-stop shop for most any residential and commercial building needs.

“We are a complete building supply dealer that sells everything it takes to build a house,” says Joe VanHoose, owner of FSVH and the second president in the company’s 106-year history.

The company carries a variety of wood species from around North America, including Eastern white pine from the Northeast, yellow pine from the South and spruce, pine and fir from British Columbia. The Eastern white pine is especially well-suited for use as a board, according to VanHoose. “It’s a good product and a soft wood, so it stains good and is easy to work with,” he says.

Founded by Joe’s grandfather Frew S. VanHoose, FSVH was entrusted to Joe in 1964 when he was just 23 years old. The company started out as a grocer and steadily added to its slate of lumber and building supplies until, before they knew it, the VanHoose family had a lumber company.

After Joe’s father died in World War II, ownership of FSVH passed on to Joe, who has been at the helm of the company for 52 years. This long tenure gives VanHoose an unmatched reserve of institutional knowledge, allowing him to take the long view even during tough economic times.

Coal’s fall hits market

While VanHoose has overseen a period a major growth over the last 50 years — increasing sales thirtyfold from when he took over — the company has recently seen some of those tough economic times as sales volume drop in reaction to the region’s faltering coal market.

“Here in the coal fields of eastern Kentucky, over half of coalminers have lost their jobs, so the economy is not very good in the market we serve right now,” explains VanHoose. The 75-to-100-mile radius served by VanHoose is largely comprised of coal fields and coal-dependent communities, leaving the region’s economy inexorably linked to coal production.

“Here in the coal fields of Appalachia, it’s a whole different world really. We have our own economy and in the past it’s been good here when it was bad everywhere else, but right now, the economy is really suffering in this area,” he says. While the area also has considerable activity in the oil and natural gas sectors, low prices are putting a hurt on that industry as well. “They’re not drilling any wells right now and those wells don’t produce the jobs that coal mines do anyway,” adds VanHoose.

FSVH has seen revenues drop by some $500,000 in recent years and the employee base has shrunk from 50 to 38, but VanHoose is always on the hunt for money-saving solutions that will ensure the longevity and continued survival of the century-old company. “We’re trying to control our expenses and margins and survive less on volume because you can’t get that same volume when the economy is suffering,” he says.

While overall revenues at FSVH are down, VanHoose says the company is still profitable and has high liquidity. While some business owners might see the collapse of the region’s largest industry as a death knell for a company, VanHoose’s long tenure grants him a modicum of perspective on the current economic woes. “I’ve been running things here for 52 years and while our bottom line profits are down, we’re still profitable,” he says.

Strength in survival

While FSVH has been forced to make some staff cutbacks owing to the region’s slowing economy, the company still offers a complete benefit package to its roster of 38 fulltime employees. “We don’t use any part-time employees, and we’ve always had a benefit package for them,” VanHoose says.

One advantage of the Kentucky coal slowdown has been the glut of qualified employees, though FSVH does not currently have the volume to do any additional hiring. “There are plenty of qualified people, but it’s a little more difficult to keep CDL truck drivers in a retail business like this because if they want, they can get a cross-country job that will pay them a lot more,” he says.

With the local economy at a low point, survival is the name of the game right now at FSVH. “Normally you would define success by profitability, but right now survival is No. 1,” says VanHoose.

Given the seasonal nature of the construction business in the area, VanHoose knows the importance of moving as much product as possible during the warmer months. To that end, he has been running the same seasonal promotion for the past 52 years, taking ads out in local newspapers, television and radio stations twice a year. “I’ve been having the same promotions at the same time since the early ‘70s. Customers know that and will schedule some of their projects around them,” he says.

FSVH has faced increased competition from big-box home improvement retailers as of late, who have gone as far as running promotions parallel to FSVH and offering to match any advertised sale price. “My competition knows when I’m going to do it and they try to do things to intercept that business,” he says.

While the last few years have been a time of time of difficulty and chance at FSVH, VanHoose is confident that his vast industry knowledge and the relationships he has built over 52 years in the business will see F.S. VanHoose & Company Inc. continue to remain a market leader in the eastern Kentucky lumber and building supply market for years to come.

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Spring 2018



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