250 Biggest

Electrical Wholesaling ranks the largest U.S. electrical distributors.

Rather than build their networks branch by branch in the time-honored tradition, big distributors today favor another modus operandi: Acquire (or merge with) another big distributor, making a major impact in one move. This strategy becomes quickly apparent in a comparison of Electrical Wholesaling's list of the 250 Biggest electrical distributors from this year and last year. Sixteen companies on last year's roster were acquired in 1997 by other big firms on the list. All but one of the acquirers rank among the top 50 companies. Another four firms on this year's list have already been snatched up by acquisitive distributors in the top 10 on the 1998 list.

The number of acquisitions among the 250 Biggest (the largest ever in the 30-year history of the list) and the size of the acquired companies again make acquisition the "big news" coming out of the listing.

This buy-up activity changed the roster of the 250, but had only minor impact on the big picture of the structure of the electrical wholesaling industry. These 250 firms did around 44% of the industry's business, based on electrical wholesaling industry sales estimated at around $67.3 billion for the year 1997 and a total of $29.9 billion in sales in 1997 for the 250 firms listed here. That market share figure for these 250 firms appears to be up only a percentage point from 1996, in spite of the dramatic acquisition activity. If 1997 industry sales come in higher than $67.3 billion, as seems possible, then the percentage accounted for by the 250 could well remain unchanged from year to year.

The four national chains-Consolidated Electrical Distributors, Inc., Westlake Village, Calif.; GE Supply Co., Shelton, Conn.; Graybar Electric Co., St. Louis, Mo.; and WESCO Distribution, Inc., Pittsburgh, Pa.-probably approached $9.9 billion in combined sales volume, or around 15% of industry sales in 1997. The market share among this group appears to have risen 1% since 1996, helped along by WESCO's continued acquisition activity. In 1997, WESCO acquired three companies on the 1997 list, with combined sales of around $235 million. (This year it acquired Reily Electrical Supply, Metairie, La., No. 36 on the following list with 1997 sales of $136,000,000.)

To qualify for a spot on the 250 Biggest this year, a firm had to have $23 million or more in electrical product sales for 1997 at wholesale. That includes sales of products a typical electrical distributor handles, such as lighting fixtures sold at retail in a lighting showroom and voice/data communication products. It does, however, exclude revenues from motor repair, plumbing supplies, mill supplies and the like. This year's cutoff moved up over the previous year's $21.3 million.

The firms in the list are ranked by dollar sales volume insofar as possible. To place a firm on the list, we estimate its sales if the distributor did not provide it, using publicly available information and our own records of comparable company and geographic area data. Both full-line and specialized electrical distributors qualify for ranking, as well as companies that have multiple types of businesses.

Based on the 192 distributors who furnished both a sales volume and an employee count for the current list, the median sales per employee for this group moved to $392,000. That figure marks a new high, up from 1996's $371,000, 1995's $363,000 and 1994's $343,000.

In total, the 250 firms listed here employ 71,081 people in electrical wholesale operations. That figure includes data on several companies whose number of employees was estimated through internal or industry sources. Among them, they run 4,190 electrical supply locations.

The majority of firms on the list favor doing business as chains, whether national in scope or confined to a state or a region (three or more contiguous states). Multi-regional chains sprawl past one region's boundaries into several geographic areas. In all, 158 firms on the list (including specialists) operate as chains, running five or more houses. A handful of these chain distributors run far-flung operations.

After the chains in number come the multi-branch companies with two to four houses in a local market. We find 56 of them in this year's listing. Big single-house firms on the list number 14 this year, down three from last year.

Specialty distributors, such as wire and cable distributors and lighting specialists, tend to have multiple locations, but only one per state, a somewhat different pattern from traditional full-line electrical wholesalers. But some of them operate as only one house or confined to a region. Fifty-one specialists appear on this listing of the 250 Biggest. Specialists now make up 20% of the list.

The 250 Biggest gives an overview of activity at the top of the electrical distribution industry. It also serves as a guide to the entire industry's size and structure.