No longer a low-profile company, Lowe's Companies has evolved from a regional hardware store operator into a nationwide chain of home improvement superstores bent on international expansion. The #2 US home improvement chain (after The Home Depot), Lowe's has more than 1,745 superstores in 50 states and more than 30 locations in Canada and Mexico, as well as an e-commerce site. Its stores sell some 40,000 products for do-it-yourselfers and professionals for home improvement and repair projects, such as lumber, paint, plumbing and electrical supplies, tools, and gardening products, as well as appliances, lighting, and furniture. Lowe's is the second-largest US home appliance retailer after Sears.
Since entering Canada in 2007 Lowe's has grown to number 31 stores there. Seeking to get bigger faster in Canada, Lowe's in July 2012 bid C$1.8 billion (or roughly $1.8 billion) to acquire its Canadian rival RONA. (Based in Quebec, RONA operates about 800 hardware stores across Canada, including about 40 in Quebec, where Lowe's has no retail presence.) However, RONA rejected the offer and Lowe's formally withdrew its bid in September.
Sales topped $50 billion in fiscal 2012 (ends January), up nearly 3% vs. the prior year. Sales at stores open longer than 13 months were flat however, and net income however declined more than 8% over the same period. Still, fiscal 2012 marked the second consecutive year of sales growth for Lowe's, after two years of falling sales during the recession and housing crisis. Despite the sales reversal, Lowe's has kept its expansion plans conservative, opening only about 25 new outlets in fiscal 2011. Going forward, the company revised its new store opening schedule to only 10 to 15 locations per year beginning in 2012, down from a previous target of 30.
The slower pace of store openings reverses the trend at Lowe's, which grew its store base by more than 50% since 2005. The company typically concentrates on small and midsized markets, but it also targets large metropolitan areas (with populations of 500,000 or more). Lowe's, which entered Canada five years ago, sees potential in the North American market for up to 2,500 locations, but the economic downturn slowed its progress on making that a reality. Indeed, in October 2011 Lowe's announced plans to shutter 20 of its underperforming US locations and eliminate nearly 2,000 jobs. Beyond North America, Lowe's has set its sights on the land down under. Through a joint venture formed in 2009 with Australia's top retailer, Woolworths Ltd., Lowe's owns a one-third share in seven DIY stores under the Master banner there. The partnership expects to open as many as 20 Masters stores in the coming year. To drive sales, Lowe's is trying to differentiate itself from its rivals by forming strategic partnerships with select suppliers, including GE (appliances), Stainmaster (carpets), and Pella (windows), to offer brand-name merchandise in its stores. It's also trying to attract more female customers, who, the company claims, call the shots on about 80% of home improvement decisions. To make its big-box stores appealing, the company makes effective use of lighting and signage and caters to women and baby boomers with an attractive store layout. The retailer has also increased the number of sales representatives working the floor on weekends, its peak shopping period. – less