Doors and Windows - Andersen Window's acquisition of Morgan Products - Brief Article - Industry Overview - Statistical Data Included

Home Channel News, May 21, 2001

Reverberations from one of the bigger deals to hit the millwork market -- Andersen Windows' 1999 acquisition of distributor Morgan Products -- are still being felt and are influencing industry events.

Andersen's move to consolidate control of its product distribution won the supplier an expanded deal with Carolina Holdings, the industry's top pro-oriented dealer. In March 2001, Carolina announced plans to introduce Andersen products to its southeast U.S. operations. In the process, the pro dealer made Andersen windows the dominant wood window brand sold at 115 of its 200 nationwide locations.

On the flip side, Andersen and millwork wholesaler Huttig Building Products severed ties last September. The breakup was a direct result of Bayport, Minn.-based Andersen's development of a company-owned distribution arm -- called Andersen Logistics -- via the Morgan acquisition.

Sales of Andersen Windows accounted for about 6 percent to 7 percent of Huttig's annual business, which for year-end 2000 totaled $1.1 billion. To help make up for that loss, Huttig strengthened its relationship with Jeld-Wen, an Andersen rival. Huttig added Jeld-Wen brands Caradco and Norco to several of its branches.

For its part, Jeld-Wen in early 2001 announced plans to begin taking its DoorWise training and merchandising support program direct to home centers and lumber dealers. Previously, the Klamath Falls, Ore.-based millwork and building products manufacturer made the year-old program available only to its wholesaler-distributor customers.

Jeld-Wen made the decision to expand the program -- which consists of sales- and product-training sessions called DoorWise University, sales incentives and in-store (or in-yard) merchandising sets -- to warehouse home centers and lumberyards after introducing it to 90 wholesalers in 2000.

On the product front, several window and door manufacturers used 2000 and early 2001 to enter new markets. Pella, for instance, introduced a carbon entry door that retails for $650 and fills the market niche between steel and high-end wood.

Vetter Windows & Patio Doors began offering fiberglass and steel entry doors for the first time this spring. And Andersen, at the 2001 Builders Show, announced plans to roll out a mid-priced line of wood windows called the 200 Series, which is being marketed as 25 percent less expensive than its traditional 400 Series but with a similar level of quality.

Diversification seems to be one way that suppliers are addressing a residential window market that declined in 2000. Ducker Research reported that 2000 window sales fell to an estimated 54.1 million units from 57 million units the previous year. The group forecasts sales to be flat in 2001 and increase only a bit in 2002 to 55 million units.

Doors and Windows: 6.97%

% of total Top 500 sales

Top 500 sales: $8.36 billion