Robust Industry Feeds Merger Mania

Home Channel News, May 24, 1999

The booming home improvement field, a pace setter for retailing in America, continued to consolidate around major dealers and suppliers in 1998. The mergers and acquisitions that drove this consolidation were often beep funded by outside investors that are attracted by the sustained health of an industry which completed its second consecutive year of double-digit sales growth; and especially by the future prospects of the industry's two largest dealers that were responsible for the bulk of its new-store and sales expansion.

Over the past live years, the Top 500 home improvement retailers enjoyed a 47 percent increase in sales. These companies in 1998 accounted for more than half of the $171.6 billion in total sales of these products at all retail outlets, including specialty stores, hardware stores and discounters.

               % Growth % Share [*]
1994 $60.9 bil  18.0%     46.3%
1995 $65.2 bil   7.1%     47.8%
1996 $71.7 bil   9.9%     49.0%
1997 $79.3 bil  10.7%     50.6%
1998 $89.2 bil  12.5%     52.0%


(*.)Top 500 sales as a percent share of total industry sales.
Source: NHCN research, Commerce Dept