Home Depot's upscale Expo takes off - newest version of its Expo Design Center - Brief Article

Discount Store News, Feb 7, 2000 by Debbie Howell

NORTH HIGHLAND HILL, TEXAS -- Home Depot's newest version of its Expo Design Center showed the retailer's tweaking of the format for the past nine years has paid off. Now Expo is ready to run with an expansion plan that will nearly double its store count this year.

Two Expo openings in late January in the Texas cities of North Richland Hills and Houston brought the division's store count to 15. By the end of the year, a total of 11 stores will be added in the new markets of Boston, San Francisco, New Jersey and Detroit.

The design center concept specializes in offering a broad range of upscale home remodeling projects for higher-income consumers whereas Home Depot warehouse stores target the DIYer.

Expo has continually evolved toward a more upscale interior design showroom format, offering such high-ticket items as $4,475 Shonbek chandeliers, $3,800 wicker patio sets and custom kitchen and bath renovation projects that range in price from $7,000 to $150,000. The high ceilings and warehouse look of the earlier Expos has been refined with better presentations featuring skylights, candelabras, room vignettes and elaborate themed displays of ready-to-buy decor items. The newest stores feature more than 20 complete kitchen and bath vignettes spotlighting the latest trends in home remodeling, such as gold accents in bathrooms and designer tiles in the kitchen.

"Some people describe our new footprint as a living magazine," said Melissa Watkins, public relations manager for the Expo division.

Although the latest Expo has not added any departments beyond the eight designer showrooms found in other stores, Watkins said one variation being tested in this Fort Worth suburb is a split in-stock shop, found on both sides of the store abutting the showrooms. One side features patio furniture and home accessories, while the other offers faucets, sinks, toilets, bath cabinets and related bath and cabinet hardware. Checkouts are available in both cash-and-carry areas.

In the center, the 99,000-sq.-ft store's various showrooms feature the gravy of Expo's business, which is special order and custom remodeling projects for the kitchen, bath and closet. Other showrooms sell appliances, window treatments, flooring, cabinet hardware, lighting, fans, carpeting and rugs.

Store manager Allison Hunt said the newest store shows improvement in adjacencies between showrooms and the in-stock shops, with more seamless transitions between like departments. As with other Expos, the North Richland Hills store features a small cafe, library and service desk.

One other new feature at the store is a pro sales office, which is discretely situated in a corner of the store near checkouts. It offers the same interior design products and services as those for the consumer, but caters to architects, builders, contractors and designers.

Jerry Thompson, Expo's district installation manager, said the majority of Expo's sales involve installation and special order jobs, although shoppers can also buy individual items and do their own work. Although merchandise is more upscale compared with Home Depot's warehouse centers, products are at prices that provide a value over other designer showrooms, he said.

A machine-made silk rug from Belgium, for example, retails for $798 at Expo but sells for up to $3,998 elsewhere, Thompson said.

Expo has created a unique niche for the customer who wants to remodel a room and buy all products and installation services in one place. Thompson said Expo goes to a customer's home to take measurements and supervises the project from start to finish. The installation work, which is carried out by subcontractors, carries a lifetime guarantee by Expo.

Watkins said Home Depot does not break out or release Expo's sales numbers, although she said the division is "very successful" and profitable..

Lowe's offers some installation services in its warehouse stores but so far hasn't spun off a separate showroom format like Expo. The closest competitor may be Sears' The Great Indoors.

Now that the Expo division has refined its format to a prototype it believes works--based on the footprint of an Expo store that opened four years ago in Miami--a full-scale expansion is on tap. By 2005, the division intends to have 200 Expo stores in operation. The store in North Richland Hills was the third Expo to open in the North Texas market, joining two in nearby Dallas and Plano.