A $12 billion company’s controversial relocation was simply an $11.6 billion company’s fuel for expansion within the New Jersey market.
At least that’s how District Manager James Golini sees it.
Ferguson Enterprises — the country’s largest wholesale distributor of commercial and residential plumbing supplies, based in Newport News, Virginia — celebrated on Wednesday its grand opening of the “first mega (shipping) hub of its kind” at the former Panasonic Corp. of North America headquarters site in the Harmon Cove section of Secaucus.
“When the building became available, we didn’t think it was an option at first,” Golini said. “But through negotiation with the landlord and Panasonic’s relocation, it made perfect sense for us to take the facility.”
Ferguson Enterprises has occupied the 460,000-square-foot space since March, about two years after Panasonic moved to Newark with the help of a $102.4 million state tax credit.
“We realized that, in order for us to grow in the marketplace, we had to have a centralized point of distribution so that we could service all of the businesses (we’ve acquired),” Golini said.
You might call it a happy ending for a controversy sparked in 2011, when Panasonic was awarded the tax credit under the state’s Urban Transit Hub program. Critics blasted the outsized incentive, saying it allowed Panasonic to move some 10 miles to Newark and was helping the city at the expense of a suburb.
That led to a lawsuit by Harmon Cove landlord Hartz Mountain Industries against the state Economic Development Authority, spurring an overhaul of the agency’s incentives programs that resulted in new offerings to New Jersey’s suburbs. Hartz, meantime, used a speculative $20 million renovation of one of the former Panasonic warehouses to lure Ferguson to Secaucus.
In the end, it paved the way for a new opportunity for the plumbing supplier.
“This model (in Secaucus) is the genesis of how we are going to consolidate our markets — locations that can handle around 30,000 SKUs and about $25 million in sold inventory at any given time.”
Founded in 1953, Ferguson Enterprises has grown to 1,400 locations worldwide, with more than 20,000 associates and 12 distribution centers throughout the U.S. In addition to plumbing, the company also provides products for HVAC, refrigeration, industrial, fire, fabrication, waterworks, kitchen and bath appliances, lighting, fans, safety and security items.
“This location met our requirements of the size and scope needed to support our extremely diverse customer basis,” Golini said.
It also solidified the company’s presence in the metro New York area, a move that required no state incentives. A company representative said Ferguson considered applying for incentives, but ultimately decided not to “based on the structure and requirements” of the programs.
After opening a location in Edison in 1989, Ferguson Enterprises continued to make strategic acquisitions over the past 20 years in this marketplace, including L&H Supply Co. in Lakewood, Davis & Warshow in New York City and, just last year, Karl’s Appliance in Fairfield.
“We’re very proud of the fact that we buy great companies and integrate them into our business,” Golini said.
With $5.6 billion in market opportunity in New York City alone, Ferguson Enterprises’ Secaucus-based shipping hub is key to managing them all.
“Our objective was to consolidate distribution models to provide better service,” Golini said. “For example, L&H Supply Co., Davis & Warshow and Karl’s Appliance may all have serviced the same customer — we may have been sending three trucks to service one customer.”
Now, Golini said, multiple types of deliveries get loaded onto a single truck to go to the same area — and shipping speeds are dramatically increased.
“If a customer placed an order with us today at 5 o’clock that we didn’t have in this building but had in one of our distribution centers, our overnight trucks could drop that order tonight and have it on our loading dock by 4 a.m.,” Golini said.
“I don’t know of anyone else having that capability in this marketplace.”
Ferguson Enterprises is also now able to provide same-day or next-day service within a 100-mile radius of the metro New York area, from Monmouth County to north of Albany, New York.
“It’s a good jumping-off point into New York City with great service opportunities via the major highways and marketplaces in the area,” Golini said. “Quite frankly, we can get to anywhere from here.”
Their business is just as easily accessible. In addition to the more than 40 Ferguson locations throughout New Jersey, the Secaucus location will serve as a Ferguson “Counter,” a one-stop shop for professional contractors to purchase tools, plumbing products, parts and accessories.
And with more than 145 employees in Secaucus and 840 total within the metro New York/New Jersey marketplace, someone will always be available for the customer.
“We want to be the best national wholesaler with local flair,” Golini said. “When we come into a marketplace — despite being owned by a parent company in the U.K. (Wolseley) — we want to make sure that we provide service that feels local.
“While our headquarters is based in Virginia, we are very much a New Jersey and New York company.”
Ferguson Enterprises’ major expansion in this area is evident of its main corporate objective — to strategize on how the company can provide better customer service than it did a year ago.
“The customer wants three things: on time, accurate and complete,” Golini said. “We know that as a customer, whether you’re a homeowner or a trade contractor, you have choices. We want that choice to be Ferguson every single time.”
The company believes its new regional shipping center will help make that happen.
“This model here in Secaucus is consistent with what we are doing across the country — this mega hub is designed to provide products for all the types of customers Ferguson sells to, from plumbing contractors to Mr. and Mrs. Homeowner,” Golini said.
“It couldn’t be much better for us than where we are right now.”
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Moving on up
Nearly 30 years ago, James Golini — a former Marine — was going to school at nights and driving trucks for L&H Supply in Lakewood.
Today, Golini — now a district manager for Ferguson Enterprises — just celebrated his 27th anniversary with the company, which bought L&H.
“I started my career as a truck driver back in 1988,” Golini said. “Ferguson has given me tremendous opportunity since the acquisition to do a lot more for the organization.”