To increase sales and profits in order to survive the high interest rates of the early 1980s, Richard expanded the business’ focus to include installed sales and performed many small remodeling services for its existing customer base.  The projects ranged from installing doors and windows, to complete kitchen and bath remodels as well as and addition projects.  Kitzman’s also completely rehabilitated single-family houses for the City of Rockford under various government programs.  During this period, Kitzman’s employed a staff of carpenters and utilized sub-contracted labor to complete the jobs.

The remodeling aspect of the business grew throughout the rest of the 1980’s.  Richard relied on his wholesale building material supply contacts from his previous lumberyard positions to buy the materials at wholesale that were needed for these remodeling jobs.    Through these contacts, Kitzman’s was able to purchase everything from windows and millwork to lumber and carpet on a wholesale basis.  Because of the vast array of building material products that were available, a section of the Hardware store was converted into a showroom.  Products like kitchen cabinets, carpet, windows and drapery were displayed.  This showroom helped to bolster the growth of the remodeling business.  Remodeling customers came to Kitzman’s because of the fact that we had an office and a showroom.  This showroom set us apart from other remodeling contractors in the area and helped that aspect of the business grow.

Kitzman’s also utilized these wholesale contacts to open up yet another branch of the business.  This new branch was building material supply.  As aforementioned, Kitzman’s utilized sub-contracted labor to complete the remodeling jobs.  These sub-contractors knew from their own experience working on Kitzman’s jobs that Richard supplied his own remodeling jobs with quality building materials in a timely fashion.  These same sub-contractors soon came to Kitzman’s to order material for the jobs where they were acting as the general contractor.  These same sub-contractors also came to Richard to help them estimate and figure their own jobs for them.

Scott Kitzman joined Kitzman’s in May of 1992 after graduating from Columbia University with a Bachelor of Arts in Political Science.  Steve Kitzman also joined the business in 1992 and attended Rockford College part time.  After a one-year stint in Europe, Steve received his Bachelor of Arts in Business Administration in 1995.

After Scott and Steve joined the business, a strategic business change was made.  The remodeling aspect of the business was phased out in favor of developing and focusing on the building material supply business.  Some of the reasons for discontinuing remodeling services included increasing workman’s compensation insurance and unreliable sub-contract labor.  Additionally, callbacks became increasingly more time consuming and therefore unprofitable.

Kitzman’s continued to grow the building supply business and opened another showroom in Dixon, Illinois in the spring of 1996.  Kitzman’s opened the showroom in Dixon because the warehouse of one of our largest suppliers is located there.  Kitzman’s sent empty trucks down to the Dixon warehouse to pick material up and return to Rockford.  The idea behind the showroom was to get orders for building material in Dixon, deliver the material on trucks out of Rockford to customers in Dixon, pickup material at the Dixon warehouse and return to Rockford, therefore getting more use out of our trucks.  The Dixon showroom helped Kitzman’s establish a presence not only in the Dixon market, but also in Byron and Oregon as well.  These two towns were not served aggressively by other building material suppliers and were easy to establish a presence despite the fact that we did not have a location in either of the towns.

The Dixon showroom was unique to the retail building material supply industry because it was a showroom only.  No inventory was stocked in Dixon at all.  All material was delivered directly to jobsites out of the Rockford facility.  Prompt delivery service was not sacrificed because Rockford is located only 45-60 minutes away from Dixon.  Also, by keeping the inventory in one location, inventory investment was reduced, inventory turns increased, and overall overhead was kept to a bare minimum.

Kitzman’s closed down its original facility in New Milford in January of 1997 and relocated to its current headquarters at 1319 Kilburn Avenue in Rockford, Illinois.  Home Lumber and Supply occupied the Kilburn facility until the time that bankruptcy forced them to sell the property to Kitzman’s.  The Kilburn location gave Kitzman’s approximately 10 times more storage space than the old New Milford location offered.  Additionally, Kitzman’s owns the property, whereas the New Milford location was leased.

The Kilburn location offered many challenges.  First, the property sat vacant for almost two years.  So, there was a significant amount of remodeling and upgrading that was needed to bring the facility up to speed.  Family, friends and customers performed all of this work.  The first day of this work was January 1, 1997, the first day that we had occupancy.  For the next four months, nights and weekends were spent throwing out old junk from the warehouse other buildings.  Inventory was moved from New Milford and re-stocked in the new facility.  It was an exciting time for all involved.  The grand opening for the facility was held in April of 1997.

Secondly, an EPA issue needed to be resolved.  This proved to be the most the difficult challenge to overcome.  A final mortgage closing could not proceed without obtaining a 4Y letter of no further remediation from the Illinois State EPA.  As part of the purchase agreement, Home Lumber and Supply was responsible for all of the environmental work.  Kitzman’s was able to take possession of the property until final closing under a lease agreement.  Part of the lease agreement stipulated that if the environmental issue was not resolved by June 1^st 1997, a certain amount of the lease to be applied to the purchase price.  Kitzman’s originally expected the environmental issue to be a six to nine month process to reach conclusion.  This issue wound up taking more than one year to resolve.  During that time, Home Lumber’s creditors sued the bankruptcy court trustee and contested our purchase price for the property.  Therefore, to stay out of court, Kitzman’s called on the Illinois Lumber and Building Material Association to lobby the Illinois State EPA to act more quickly on our behalf.  EPA visits were made to Kilburn Avenue and more test wells were drilled.  Within three weeks of the ILMDA’s phone call to the State EPA, Kitzman’s had a 4Y Letter of No Further Remediation in hand.  With acceptance of that letter, the loan was quickly closed, and the creditors suit to dismiss our purchase contract never became an issue.