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Grainger to add six outlets in NYC area

W.W. Grainger Inc., one of the nation’s biggest sellers of industrial supplies, plans to open six new locations in the New York area by the end of 2008 as part of an ongoing effort to expand its reach into local markets, according to Crain’s New York.

“New York has been a focus for us,” Mike Hade, regional branch services vice president at Grainger, told Crain’s. “It’s a strong market for commercial property and hospitality.”

In addition to the new branches, the Lake Forest, Ill.-based company moved all of its West 31st Street operations in April to a space that is five times as big. The new 25,000-square-foot site on West 54th Street will allow it to triple its showroom size and increase its warehouse capacity.

The company is also shifting its existing Bronx outlet on Eastchester Road to a Longwood Avenue site in the Hunts Point section to be closer to its industrial and commercial customers.

Grainger currently has 23 locations in the New York area, including two in Manhattan, and one each in the Bronx, Brooklyn and Queens. Company officials said they are actively scouting Harlem and Long Island City for new sites, according to Crain’s.

In July, Grainger will open a brand new 30,000-square-foot branch in Happauge, L.I., adding to its existing Long Island locations in Melville, Bohemia and New Hyde Park.

By the end of 2008, Grainger will have 29 local outlets and a 20 percent larger workforce in the New York area, boosting its local warehouse space by 40 percent and bringing the total number of local employees to nearly 500, reports Crain’s.

The company launched a national, $200-million expansion plan about three years ago, targeting major cities like Baltimore, Atlanta and Philadelphia. Grainger, which supplies plumbing parts, heating and cooling supplies and electrical equipment, has faced heightened competition from big-box home improvement chains like Home Depot Inc. and Lowe’s Cos., according to Crain’s.

Analysts say the expansion program is beginning to show dividends.

“Having spent several years retooling its business, Grainger is at a point where the benefits in sales growth and realized leverage should outpace the costs,” wrote BT&T Capital Markets analyst Holden Lewis, in a research report.

Grainger earned a record $383 million on record sales of $5.9 billion last year, and, in February, it reported a 10 percent surge in monthly same-store sales, which track sales at stores open at least a year.

The company operates nearly 600 branches and 18 distribution centers throughout North America and Mexico. The company opened its first China outlet in suburban Shanghai last year.
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