Eagle store conversion headache begins to subside

Home Channel News, Dec 11, 2000

That the Eagle conversions have not gone exactly as planned was never more evident than during a teleconference Lowe's officials conducted for analysts last month, during which they disclosed that the Eagle stores alone had accounted for a two-percentage-point erosion in Lowe's overall comp-store sales through the first nine months of 2000.

There are signs, however, that this chaos may be subsiding. With the exception of two stores (in Alaska and Hawaii), all Eagle units, which span 10 states, were converted to the Lowe's format by Labor Day. In late September, analyst Danielle Fox of J.P. Morgan Securities visited three former Eagle stores in the Seattle area and found the stores both neat and adequately staffed. But she observed that foot traffic was slow.

"The stores are fine," Fox maintained. "Now they need to get the customers."

Lowe's intends to lure shoppers with a heavy dose of advertising, fresh products and superior service, according to Stone, who in early November toured 16 converted Eagle units. "The stores look good, and we've completed the heavy lifting," he said. "We added staff in a lot of the stores, and we're still running the payrolls heavy," he said. "I know we'll win customers back through service."

Of equal importance to Lowe's has been the fact that, according to Stone, Eagle's employees no longer see themselves as working for another company. "I kept hearing 'our company' when I spoke to our associates. A year ago, they were saying they still worked for Eagle."