The NHCN Top 20: A five-year perspective

Home Channel News, May 24, 1999

Highlights of 1998

* Home Depot opens its first stores in Chile and in Puerto Rico, and its 100th in California, in Sacramento. Total store count includes 707 Home Depot stores, eight Expo Design Centers and 43 Home Depot stores in Canada.

* Comp-store sales rise 7 percent and net earnings climb 32 percent to $1.6 billion.

* Opens 88,000-square-foot store in Colma, Calif., geared primarily toward professional remodelers. Company officials say they have no plans to roll out this test.

* Begins testing e-commerce when its subsidiary, Maintenance Warehouse, put its 10,000-sku catalog of building repair and maintenance products online. Tests first interactive services on its Web site by offering its shares for sale online, as well as a free service that provides home and gardening tips.

* Tests use of National Blind and Wallpaper subsidiary's call center as a national call center to handle special orders for all of Depot's stores. The company increases telephone sales reps to 700 from 250.

* Expands test of its rental centers, which average 2,000 square feet and carry 200 tools, to 50 stores in 1998.

* Wins Points of Light Foundation's 1998 Award for Excellence in community service.

* In December, introduces gift cards that can be used at any Home Depot or Expo store. The cards are available in $10, $25, $50 and $100 denominations.

* Building on the success of its "Kids' Workshops," launches a children's television show hosted by the company mascot, Homer.

Hurdles of 1998:

* Pays the state of Michigan a $250,000 fine, plus $25,000 to cover costs related to investigation that found the dealer in violation of state's pricing laws for the second time in three years.

* Environmentalists protest in front of Home Depot's headquarters, and at 70 of its stores, calling for the retailer to stop selling products made from old-growth timber.

* A group of socially conscious investors pressures Home Depot to make public its efforts to increase diversity in the wake of a gender discrimination lawsuit the company settled in 1997 for $104 million. The proposal is defeated at Home Depot's annual meeting.

* Closes its Chesterfield, Va., store indefinitely in December because of concerns about buckling floors. The store is the first that Home Depot has closed because of structural problems.

Major changes:

* Names four group presidents and appears to narrow the field of candidates to assume leadership after current management retires. Bill Hamlin, executive vp-merchandising, is named group president overseeing the Northeast, West and Southeast divisions. Larry Mercer, executive vp-operations, is named group president in charge of the Midwest, Southwest and Canadian divisions. David Suliteanu, former vice chairman and director of stores for Macy's East, is hired as group president-diversified business, responsible for Depot's Expo Design Centers. Jeffrey Cohen, formerly with Harte Hank Direct Marketing, is hired to oversee its direct marketing activities.

* Mike Tracy is named to the new position of senior vp and general manager of proprietary brands. As part of the company's branding effort, Home Depot strikes deals for exclusive lines of mid-price tractors made by John Deere and sold under the Scott's name, as well as with GE for an exclusive line of water heaters.

Plans for 1999

* Open 167 stores, including 13 in Canada, three in Chile, and its first in Argentina.

* Open 10 Expo Design Centers by year-end. The first of four Villager's Hardware stores in New Jersey is scheduled to open in June in East Brunswick.

* Spend an estimated $13 million to bring internal computer systems to Y2K compliance. The retailer plans to make all security and energy systems compliant by second quarter end, and also conduct tests throughout the year with its merchandise suppliers using EDI and its transportation carriers.

* Launch a new Web site in May with more interactive elements and start selling online by mid-1999.

* Expand its At Home Services installation program -- which contracts the installation of roofing, siding and replacement windows to two companies -- beyond the 100 stores it offers the service in during its test phase.

* Expand rental centers to 200 stores in the United States and Canada.

Highlights of 1998:

* Bets on three programs to boost existing store sales: installation services for about 20 product categories; user-friendly special-order systems in seven departments; and an aggressive push for commercial business by carrying more professional brands and in-stock quantities for bigger jobs.

* Sales rise 20.8 percent for the year; profits rise 35 percent to $482.4 million.

* Launches Kobalt, a private-label mechanic tool line made by Snap-On, available in Lowe's stores and through the Internet in one of Lowe's first ventures into online selling, www.kobalttools.com. It also sells ceiling fans through www.harborbreeze.com.

* Swoops into the Western United States with acquisition (finalized April 1999) of Renton, Wash.-based Eagle Hardware & Garden for about $1 ,billion worth of stock