A Growth Story

Imagine the jolt Bradenton, Fla.-based builder Lee Wetherington, president and CEO of Lee Wetherington Homes, got recently when he walked into his 2,500-square-foot design center and found all four of his design tables occupied and a fifth couple sitting on the floor, with a designer, selecting options on a wireless computer.

"It was an emergency situation, where the people were only in town for a day, and our designers tried to squeeze them in," Wetherington says. "But it certainly convinced me we need more design center space. Lots of times, you can't even find a parking space in our office lot anymore."

Wetherington had three design tables when he opened the design center in his headquarters building five years ago. Recently, he squeezed in a fourth table. Now, he plans to build a new building across the street to accommodate a 7,000-square-foot design center.

Lee Wetherington Cos. is a design leader in the Southwest Florida move-up market, where snowbird retirees and baby boomers looking for second homes in the sun flock every winter. The fast-growing company landed in Professional Builder's Giants rankings for the first time this year, near the middle of the chart at No. 203, on revenue of $99.3 million from 265 closings. This year, the firm is on pace to sell 356 houses and close 325. Wetherington sells a lot of options.

"We're averaging about $80,000 a house now in option sales," he says. "Our designers average about $35,000 a year in salary and $50,000 to $60,000 in commissions. It's a retail store, and that's how we manage it. The designers push stuff; that's their game. The key is marking up everything we sell by at least 50% over what we pay for it. We need that extra margin because we're pricing an installed item. We have to cover mistakes in the field, and those will happen regardless. And we're warranting the houses for two years."

Wetherington builds very few spec houses, and those he pre-sells must have all selections in the system before construction starts. "Everything is computerized," he says. "All our costs are in there. It's a constant battle to keep all the prices updated. You can imagine what that's been like this spring."

Today, his biggest worry (other than land) is how he'll cope until the new design center building is completed in 18 months - and whether it will be obsolete by the time it opens.