Payless Cashways

Payless Cashways was a building materials retailer based in Kansas City, USA. The company primarily operated during the 1980s and 1990s originating from their beginnin, and is considered among the first national chains to implement the DIY strategy. The company experienced financial difficulties during the late 1980s.

Payless Cashways differed from modern home improvement retailers in that they utilized a fully functional outdoor lumber yard. Customers would purchase materials inside the store and upon payment, would drive their vehicle into the lumber yard area and give their order ticket to an attendant. Prior to filing for bankruptcy protection, Payless Cashways operated 194 stores across 22 states.^[1]

History

Sanford "Sam" Furrow founded his business in 1930 with the purchase of a lumberyard in Pocahontas, Iowa that was in default on its loans, along with his sons and business partner John Evans. He then bought two other lumberyards in the same financial position. The original yard was named Kiefer-Wolfe Lumber Company, which was soon renamed Pocahontas Lumber Store. The company grew, and Sam Furrow and John Evans split the company. Sam and his sons began operating on "cash-and-carry", able to offer lower prices than when taking on the risk of contractors buying on credit. The company eventually adopted the Payless Cahsways name, but new locations were added using Furrow's due to trademark issues in Texas, Oregon, Missouri, Kansas, Oklahoma, California, and Indiana. (For example, in Indiana, Payless was a grocery chain). By 1981, the company was the 5th largest in the industry. Payless Cashways was taken private in 1988, but didn't see any profits the five years it was private.^[2]

Payless Cashways faced their first major challenge in 1988, when they were the target of a leveraged buyout led by Asher Edleman and Sutherland Lumber.^[3] The company also received a takeover bid from The Ward White Group, a British company which operated a similarly named retailer in Britain.^[4][5] In response to the takeover attempts, Payless Cashways repurchased the company's 33.6 million outstanding shares at $27 per share, totaling $909 million.^[6] The Payless Cashways stock buyback left them saddled with massive debt that stopped their expansion.^[7] The retailer's stagnation caused them to be left behind by the big box home centers such as Builders Square, HomeBase, and later the emerging Home Depot and Lowe's chains.^[8] The company struggled through the nineties with moderate successes and recurrent failures and never regained the momentum of their first wave of expansion. In July 1997, Payless Cashways filed for Chapter 11 bankruptcy protection.^[1] The last straw for Payless Cashways was the burst of the dot com bubble that left many banks unwilling to help the company continue its operations. On September 10, 2001 the company was ordered to be liquidated.^[7]

Names Operated Under

Payless Cashways operated stores under a variety of banners, usually with one banner per given area. They were:^[9]

• Payless Cashways
• Furrow
• Lumberjack
• Hugh M. Woods
• Knox Lumber
• Contractor Supply
• PCI Builders Resource
• PCIBuildStreet.com

References