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While Pacific’s biggest competition is larger in total sales volume, largely due to national consolidation, the company dominates the western Washington markets in terms of the number of branches located in high growth areas, and competes effectively in Alaska and Hawaii as well. The company also belongs to a well-known plumbing industry buying group, “Embassy Group Ltd.” This group consists of approximately 60 of the top independent wholesale distributors across the U.S, whose purchasing volume is combined for rebate incentives. In addition, the company has been a partner with industry-leading American Standard for decades and is the primary distributor in this region with exclusive rights to sell their products.
An affiliated company, Penguin Plumbing & Electric Supply Co., Inc. operates a small chain of retail stores which sell to consumer do-it-your-selfer’s as well as contractors. The company, which is under common ownership with Pacific, began operations in 1964 and currently operates through 4 locations in eastern Washington and 1 location in central Nevada. Stores have generally been located in smaller communities that were poorly served, until recent years, by traditional retailers. Penguin inventories approximately 20,000 SKU’s, including plumbing, electrical, lighting and irrigation materials. About 80% of Penguin’s business is cash, with the balance on credit. Primary competition is from the Home Depot and Lowe’s warehouse chains, as well as Ace and True Value Hardware stores.
Another company affiliated with Pacific through common ownership is S&S Partners LLC. This company owns the land and buildings for several warehouse locations leased to and operated by Pacific and Penguin. The company also conducts other real estate and investment activities on behalf of the owners.
The Pacific, Hawaii, and S&S businesses were converted from partnerships to LLC’s in December 2002. Since its inception, Penguin has operated as a Washington corporation. |