The Home Depot

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The Home Depot

Introduction

Retailing building supply stores have become a popular retail industry sector due to increased public awareness and the need of many homeowners for the home improvement products. Back in the 1970s, long before warehouse stores ruled home improvement land, do-it-yourselfers shopped at “home centers.” These 30,000 square foot stores offered cheaper prices and wider selection of products, about 25,000 more than local hardware stores and eliminated the extra trip to the lumberyard. The dependence of many of these retailers upon the homebuilding industry for much of their business has also been reduced and the warehouse superstores, such as Home Depot, have become more important. The smaller companies in the retail building supply industry are facing economic difficulties as the industry leaders continue to dominate and warehouse super centers are becoming more evident.

Company Overview

Founded in 1978, The Home Depot is the world largest home improvement retailer and the third largest retailer in the United States followed by Lowe’s Companies, Inc. At the end of fiscal year 1999, the company was operating 930 stores, including 854 Home Depot stores, 15 Expo Design Center stores and 2 Villager’s Hardware stores in the United States; 53 Homes Depot in Canada; 4 Home Depot stores in Chile; and 2 Home Depot stores in Puerto Rico. In addition, they operated wholly owned subsidiaries Apex Supply Company, Georgia Lighting, Maintenance Warehouse and National Blinds and Wallpaper. They approximately employed 201,000 associates at the end of the year. The company has been publicly held since 1981. In 1978 when Bernard Marcus and Arthur Blank, executives with Handy Dan Home Improvement Centers, found themselves out of work after a corporate takeover at Handy Dan. Joined by Ronald Brill another Handy Dan employee; and Pat Farrah, former owner of Homeco, the world’s first home improvement warehouse, they mapped out plan for a bigger and better store catering to the needs of do-it-yourselfers.

These Warehouse type stores, each averaging about 130,000 square feet, stock 40,000 to 50,000 home improvement products and are aimed mainly at the do-it-yourself trade. The stores however also attract many professional-building contractors. Products include lumber, floor and wall covering, hardware, paint, plumbing supplies, and tools. Home...

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...eferences

Lowe’s Companies, Inc. Declares Cash Dividend, PR Newswire, June 12, 2000

In an Expansion Mode, Lowe’s Sharpens its Customer Focus, The Weekly Newspaper for the Home Furnishing Network, June 5, 2000 p19

Lowe’s Companies Inc., The wall Street Journal, June 1, 2000

Lowe’s Outlines Focus on Customers at Annual Meeting, Pr Newswire, May 26, 2000

Lowe’s Eyes Markets for Growth, Corporate Financing Week, April 17, 2000, p3

Retailing building supply industry, The value Line Investment Survey, April 14,2000, p881

Lowe’s Annual Report, Fiscal Year 1999, Available at: http://www.Lowes.com/

Home Depot Annual Report, Fiscal Year 1999, Available at: http://homedepot.com/

Customer Service that is above and beyond, Philadelphia Business Journal, April 7, 2000 p42

We’re No.1 The Market Loves Top Dogs. Should you?, Fortune, March 6,2000 p446

The Home Depot reports 29% Increase in First Quarter Net Earning; Comparable Store Sales up 7%, PR Newswire, May 16, 2000

The Home Depot Looks to Floor Industry; Test Store Opens in Dallas this Summer, The weekly Newspaper for the Home Furnishing Network, March 27, 2000 p1

Carving a New Niche, Do It Yourself Retailing, September 1999, p49

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