JAY-K Independent Lumber finds the right niche

Niche: The situation in which a business’s products or services can succeed by being sold to a particular kind or group of people — Merriam–Webster.

NEW HARTFORD — JAY-K Independent Lumber, Inc. has found its niche. Headquartered on Seneca Turnpike in New Hartford, JAY-K is a full-service, independent, retail lumber, and building-materials business with a single location.

Founded in 1937 by Joseph T. Kelly and Thomas Jones (ergo, the name JAY-K) as a traditional lumber yard, the company evolved into a full-service provider and established multiple locations in Sylvan Beach, Clinton, Mohawk, and Syracuse. Growth has been achieved organically, except for the purchase in 1996 of Utica Paint, which was integrated into the New Hartford site.

Going back to one location
The decision in the 1990s to close all stores except the flagship operation in New Hartford ran counter to the competition. “The big-box stores opened up in the mid-1990s,” says Dean Kelly, JAY-K’s president. “[Obviously] … with their huge buying power, they offered a wide selection of products at a very competitive price. (Lowe’s has 1,830 stores and Home Depot has 2,200 stores.) But, we also compete against chains like Little Falls Lumber [& Concrete] (four stores), 84 Lumber (257 stores, headquartered in southwest Pennsylvania), and Curtis Lumber (21 stores, headquartered in Ballston Spa). While our competitors’ strategy is to expand geographically, ours is to stay focused on our … [locality].”

Dean Kelly is a third-generation owner of JAY-K along with his first cousin, Jonas Kelly, who serves as the company’s vice president. Each has an equal share of the company stock. Both assumed their current positions in 2001, when their parents retired. They preside over an enterprise that employs 65 and, according to a Business Journalestimate, generates about $15 million to $17 million in annual revenue. 

The lumber and building-materials business operates in 85,000 to 90,000 square feet of covered space located on 23 acres. JAY-K is the name of the operating company, which is structured as a “Sub-S” corporation. In addition, the cousins own Mud Creek Ltd., which holds the land and some of the property. The operating company also owns part of the property. The Kellys have leased some of the 23 acres to other businesses.

“Our success is the result of focusing on our customers and understanding what they want,” says Dean Kelly. “Builders represent 65 percent of our business, and consumers the other 35 percent. They are looking for quality, service, and help in taking on projects … That’s why we carry brand-name products and employ people with experience. Our employees focus on helping the customer make the right decision. If the option is to fix a problem with a $2 part or to buy a more expensive replacement unit, we’ll recommend the $2 part. That’s why they keep coming back; we have their best interest at heart. This attitude of helping the customer make the right decision and being honest has attracted multiple generations of employees who feel comfortable working here … We think it’s important to educate our customers on new products and techniques. As an example, JAY-K has scheduled the “Katz Roadshow” on Sept. 8 to put on a demonstration for our customers here in the store.”

Jonas Kelly adds that the company’s size allows it to be more nimble than its competitors. “We’re also very flexible. We can respond quicker than the chain stores to changes. [In addition], … our prices are very competitive, and our customers like the fact that we have only one price for a product,” he says. “The consumer and the builder pay the same amount … Our customers also recognize that we are part of the community. Over the years, the company has donated product and funds to a number of local charities, including Habitat for Humanity, the St. Elizabeth Hospital Emergency Wing expansion, initiatives of Faxton St. Luke’s Healthcare, the United Way, and many more.”

Embracing change
The Kellys cite other reasons for their success. “We really adopted technology early,” asserts Dean Kelly. “[The second generation] … installed a point-of-sale system back in 1974. We have continued to invest in technology to run the business more efficiently. We rely on our website to help educate our customers and to attract them to the store. We send and receive orders by email. We’re always in touch by cell phone. It’s a very different world than when I started in this business.”

The company vice president points to JAY-K’s membership in professional associations to help the company be competitive. “We are long-time members of LMC (Lumberman’s Merchandising Corp.),” notes Jonas Kelly. “LMC brings together independent businesses like ours for purposes of establishing group buying power. With hundreds of members, we can offer products competitively priced with the chains and big-box stores. JAY-K also belongs to NRLA (the Northeastern Retail Lumber Association). The members are located in New York and in New England for purposes of advancing our knowledge of the business, staying abreast of legislative and regulatory reform, and networking with our peers.”

The management team
Dean Kelly, 54, grew up in New Hartford. He attended New Hartford High School, Mohawk Valley Community College for two years, and Northeastern University in Boston, where he majored in business administration. Kelly worked for Jordan Marsh as a retail manager and for AT&T selling telephone plans to mid-size and large corporations. He joined JAY-K in 1987 at the time the company was building a 50,000-square-foot, retail store at its present location. He resides with his wife Eva in New Hartford. 

Jonas Kelly, 47, grew up in Holland Patent, where he attended high school. He graduated from Hobart & William Smith College in 1989 and worked for a year at a lumberyard in Seekonk, Mass., before joining JAY-K. He and his wife Heidi live in Barneveld.

The Kellys head up the company’s management team, which also includes Karen Gerace, store manager; Tammy Dygert, manager of inventory control; and Cathy Jubis, staff accountant. The management team is augmented by local, outside professional staff. JAY-K works with NBT Bank for working capital and for construction funding. Dan Cohen, of Cohen & Cohen LLP in Utica, handles the company’s legal work.

“We like our niche,” asserts Dean Kelly. “The local economy is a challenge, with young people leaving and the graying of the population. But, in the mid- to long-term, the addition of nanotechnology will be a real boost. I’m optimistic. The Mohawk Valley is a great place to live, a place where Jason, I, and all the employees can create a real work/life balance.”       

Contact Poltenson at npoltenson@cnybj.com