Southwest Wiring Installers: Life After High-Volume
Devastated by the housing collapse, these high-volume Southwest integrators are still standing due to these 13 adjustments.
It was the best of times, but now it’s the worst of times.
High-volume structured wiring installers enjoyed so much success during the housing boom of the late 1990s and early 2000s that it must have seemed too good to be true.
In fact, it was.
There were so many builders doing so much structured wiring work that many installation companies didn’t try hard enough to diversify the services they offered—either it didn’t seem necessary or they were just too busy pre-wiring houses to think about it.
The problem, however, is that the housing boom created a false reality. When the bottom fell out of the construction market, many installers found out too late that their businesses needed to be much stronger and more diverse.
Dennis Sage readily admits it. Phoenix-based Dennis Sage Home Entertainment was “almost totally reliant on new-construction, both in the residential market and the light commercial market,” he says.
“I would say that 95 percent of our business was new-construction.”
That approach simply doesn’t work anymore.
High-Volume Dealers Drop in Industry Rankings
Consider that in 2006 Sage ranked No. 18 on the CE Pro 100 list, reporting 1,628 structured wiring installations for the prior year.
In 2008, Sage fell to No. 35 on that list, reporting only 1,125 structured wiring installations.
Meanwhile, in 2004 Eagle Sentry, a Las Vegas-based high-volume integrator, ranked No. 8 on the CE Pro 100. It reported doing 2,500 total installs. In 2008, however, Eagle Sentry fell to No. 25, reporting 2,000 installs.
The Sage and Eagle Sentry situations are typical given their Southwest locations. Integrators in the Southwest of the United States especially benefited from the housing bubble, which grew bigger there than almost anywhere.
Southwest dealers occupy a disproportionate number of spots on CE Pro’s Top 30 Structured Wiring and CE Pro 100 lists from 2003 and 2004.
A third (33 percent) of ranked integrators from those years are from that area of the United States (which does not include Los Angeles or San Diego proper). Compare that presence to 2008 lists, where just 19 percent of the ranked integrators hail from the Southwest.
“We all knew in the back of our heads that the pace that homes were being built just could not go on,” Sage says.
“But we were too fat and happy to accept the reality of market shifts that have been going on for what, maybe 1,000 years?”
Then, the housing bubble burst, and it burst in the Southwest before it did in other places.
Shrinking in Southwest
When the housing bubble burst, many high-volume Southwest dealers were caught with their pants down.
“I’ll be honest,” says Greg Simmons, co-owner of Eagle Sentry. “There was a time when I was just looking at, ‘How am I going to finish these houses?’ That’s how it was. But we’ve become smarter and stronger.”
Tom has been covering consumer electronics for six years. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Now, as senior writer/technology editor of CE Pro magazine since 2003, he dabbles in all departments and offers expertise in marketing. Have a suggestion or a topic you want to read more about? Email Tom at email@example.com
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