Home Depot takes on Lowe's challenge
By Lorrie Grant
USA Today
ATLANTA — In his 18 months in the top post of Home Depot, Robert Nardelli has used skills from his industrial background — creating systems, boosting productivity, improving inventory turns — to raise the bar at the dominant home improvement retailer.
"This wasn't a fix-it problem," he says of the 22-year-old company with more than $40 billion in sales when he came on board. "This was about how do I build upon a solid base."
Today, Home Depot is a $53 billion company ranked 18th on the Fortune 500, the second-largest retailer after No. 1 Wal-Mart. Nardelli's growth strategy — his goal is a $100 billion company by 2005 — has been to move the company beyond selling just goods to selling home services. To do that, he has started or plans several new systems and is using new store formats, such as smaller stores for urban markets and high-end design centers. He wants to capture home improvement dollars wherever and however they're spent.
"What I brought to the equation was this unique training — in process, in people and accountability," says Nardelli, 54, a nonretailer recruited from a 30-year career at General Electric. He became Home Depot's chief executive on Dec. 4, 2000, replacing co-founder Arthur Blank. He replaced co-founder Bernie Marcus as chairman last year.
An increasingly important factor in Nardelli's equation, however, is the momentum built up by Lowe's, the No. 2 home improvement retailer with $22 billion in sales. Lowe's, based in Wilkesboro, N.C., has caught investors' fancy this year with steady sales growth even as it enters more markets dominated by Home Depot.
Nardelli's response is to tick off systems in place or coming that are aimed at improving his stores, expanding services, capturing new dollars and leaving Lowe's in the sawdust
"These were loyal customers who grew up in the do-it-yourself mode who now want to be in the do-it-for-me mode," says Nardelli.
"We want to make your shopping experience much more friendly, much more pleasant, much more reliable," Nardelli says. "Ultimately, we'd love to have that project management online so that the customer can also access and see the progress."
