Designing Builders

Here's more evidence that the residential real estate market has recovered.

Just three days after workers installed a heavy wrought-iron door inside the new Design Studio by Raymond, a customer walked in and paid $16,000 for it.

“We haven't even started advertising and it's going crazy,” says Duane Swanson Jr., president and chief financial officer of Raymond Building Supply.

Many people have never heard of Raymond Building Supply, but it's likely they're living in a house built with its trusses, doors, windows, lumber and millwork. The North Fort Myers-based, family-owned company was the second-largest residential-construction supplier in Florida during the boom, according to industry tracker ProSales.

Now, the company is expanding by targeting homebuilders' customers directly with a new 8,500-square-foot showroom in Naples called Design Studio by Raymond that opened to the public in early August.

The studio is a place where high-end builders can bring their clients to select items such as top-of-the-line appliances, custom cabinetry, windows and doors. The kitchen display areas show the latest in appliances with gee-whiz technology such as steam ovens and induction-cooking stovetops.

But the studio has also attracted retail customers who may not be working with a homebuilder; more than 80 people came through to browse in a recent week. “We wanted to create an environment that was inviting,” says Swanson, whose sister, Shelley Swanson, is the director of business development for the new center.

Although Raymond Building Supply doesn't disclose revenues, Swanson says retail sales have grown to 14% of total sales since 2007. “Historically, our customer was 99.5% general contractor,” Swanson says. The company's customers stretch from Bradenton to Marco Island on the west coast and Delray Beach to Miami on the east coast.

While it still provides building products to large builders such as Pulte, Lennar and D.R. Horton, Raymond Building Supply also has been expanding business with smaller custom-home builders and the public since it acquired custom cabinetry and appliance suppliers in 2007.

But the economic downturn forced all companies related to housing to re-examine their operations. “We had to look at all the segments of the market and rethink what we were doing,” Swanson says.
During the real estate boom, Raymond Building Supply had as many as 1,400 employees. In 2010, payroll shrank to 214 employees but it has since rebounded to nearly 400 people. Swanson says sales have been growing at a 35% annual rate as the economy has recovered.

Providing showroom space for builders and their customers has been a good way to boost sales. The studio also attracts architects, interior designers and Realtors who can also bring clients. “We wanted to bring value to our customers,” says Swanson.

It's no accident that the studio is in Naples, the strongest housing market on the west coast of Florida. “Collier is the strongest and the Sarasota market has been good for us,” Swanson says.

But Swanson says he's careful not to expand too quickly despite the strong recovery in South Florida. “In today's world, I'm a little more conservative,” he says. “It's about growing smarter.”

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