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Triangle

Stock drops into bankruptcy 

For more than two years, Stock Building Supply LLC offices occupied one of three floors in Colony Corporate Center in north Raleigh. It moved out halfway through its lease but kept paying rent. In early May, its landlord figured that was about to change. “After we read that they were filing for Chapter 11, we expected the lease to be rejected,” says William Barnett, CEO of Henderson-based Center XXXIII LLC.

Within a week, it was, making him one of many affected by recent woes of a company that started in Raleigh 87 years ago, came under British ownership and grew into one of the nation’s largest suppliers of building products. Reading, U.K.-based Wolseley PLC bought and renamed Carolina Builders Corp. in 1985, keeping headquarters in Raleigh. Stock began buying lumberyards and other supply businesses. During the next 20 years, it averaged more than three acquisitions a year.

But the U.S. housing market peaked in 2005, and the company began feeling the effects the following year. That October, it began cutting jobs and closing stores. In its latest fiscal year, which ended in July 2008, Stock lost $744 million on revenue of $3.5 billion. Last October, it began another restructuring. It has cut its work force 42%, leaving about 7,000 — fewer than half of what it had in 2006 — and shed more than 90 outlets. In May, down to about 200 stores in 27 states, it filed for bankruptcy protection as part of a deal in which Wolseley sold 51% to a Los Angeles private-equity firm.

With single-family housing starts in the U.S. down 64% since 2005, lots of construction-related businesses are hurting, but not all have gone into bankruptcy. Why Stock? For one, it focused on the 100 companies that account for about 40% of homes built in the U.S., says Craig Webb, editor of ProSales, a trade magazine. “Because Stock relied on the production builders — and the production builders fell even farther than the remodeling market, the do-it-yourself market, the small builders — it suffered even more.”

Though Stock declined to comment, The News & Observer reported it still employs 850 in the Triangle, down from more than 1,000 earlier this year. More cuts are likely as the company works its way through Chapter 11. Barnett is one of seven landlords in North Carolina — three in the Triangle — left holding leases rejected by Stock. It was a tough financial hit, but there’s not much he can do about it. “We will look for tenants to replace them.”

Blue’s streak

Raleigh politician Dan Blue is gaining high-profile positions even faster than Bob Steel is losing them. In May, Wake County Democrats picked Blue, then a member of the state House of Representatives, to finish the term of state Sen. Vernon Malone, who died in April. Two days later, Duke University’s board of trustees elected him to succeed Steel as its chairman, the first black to hold the post. In December, Steel ended a five-month stint as CEO of Wachovia Corp. after San Francisco-based Wells Fargo & Co. bought the Charlotte-based bank.

 

RESEARCH TRIANGLE PARKST-Ericsson plans to close its local operation by the end of the year, idling 180. The Geneva-based company, a joint venture of ST-NXP Wireless and Ericsson Mobile Platforms, makes semiconductors used in mobile phones.

MORRISVILLEBayer CropScience plans to open a research-and-development center that will employ 128 within five years. Starting this fall, the German biotechnology company will conduct plant research here and support commercialization of biotechnology products.

SANFORDParkdale Mills planned to close its plant here by the beginning of this month, idling 81. That will leave the Gastonia-based textile maker with 24 mills and about 2,200 employees in the U.S. and Central and South America.

RALEIGH — Redmond, Wash.-based Microsoft shed about 55 of its 100 jobs here. The layoffs were among about 5,000 by the software giant this year.

RESEARCH TRIANGLE PARKWavecom will close its research center by October, idling 50. The French modem maker was bought by Canada-based Sierra Wireless in March.

DURHAM — In a move to cut costs, CDG Management closed its call center, putting 41 out of work. The Edison, N.J.-based telemarketer ran fundraising campaigns for charitable organizations, including police and veterans groups.

CHAPEL HILLCempra Pharmaceuticals raised $46 million to test an antibiotic aimed at treating drug-resistant infections. Philadelphia-based Quaker BioVentures led the round, which included Durham-based InterSouth Partners.

CARY — Italian drug maker Chiesi Farmaceutici agreed to buy a majority stake in Cornerstone Therapeutics for $70 million. Cornerstone employs more than 100 developing and selling respiratory drugs.

MORRISVILLE — Merge Healthcare agreed to buy etrials Worldwide for nearly $18.4 million in stock and cash. The deal is scheduled to close in the third quarter. Milwaukee-based Merge makes software to automate medical data. E-trials’ software helps drug companies conduct clinical tests. It wasn’t clear how etrials’ 100 employees would be affected.

ROXBORO — Durham-based Carolina Solar Energy is building a $4 million, 650-kilowatt solar-energy farm that will begin production by the end of the year. It will sell the power, enough to meet annual energy needs of about 60 homes, to Raleigh-based Progress Energy.

RALEIGHShaw University is cutting its ties to Clarence Newsome, who had been president since 2003. Shaw, $20 million in debt, says Newsome, 58, is on a yearlong sabbatical but will not return to the job.

MORRISVILLE — Dallas-based Southwest Airlines will cancel four daily flights from Raleigh-Durham International Airport in August. Other cities affected are Philadelphia, Chicago, Orlando, Fla., and Nashville, Tenn.