Lowe’s Companies, Inc.

Post Office Box 1111
North Wilkesboro, North Carolina 28656
U.S.A.
(910) 658-4000
Fax: (910) 658-4766
Web site: http://www.lowes.com

Public Company
Incorporated: 1952 as Lowe’s North Wilkesboro Hardware, Inc.
Employees: 53,492
Sales: $8.6 billion (1996)
Stock Exchanges: New York Pacific London
SICs: 5211 Lumber & Other Building Materials Dealers; 5251 Hardware Stores; 5261 Retail Nurseries, Lawn & Garden Supply Stores; 5719 Miscellaneous Homefurnishing Stores; 5722 Household Appliance Stores; 5731 Radio, Television & Consumer Electronic Stores

Lowe’s Companies, Inc., is the second-largest home improvement retailer in the United States (trailing Home Depot Inc.), holding about six percent of the $140 billion home improvement market. More than 400 Lowe’s stores in 24 states—mainly in the Midwest and Southeast—serve the do-it-yourself home improvement, home decor, home repair, and home construction markets. Primarily located in small and medium-sized markets, Lowe’s stores average more than 75,000 square feet; this average is growing, however, as the company now typically builds 100,000-square-foot units in smaller markets and 114,000-square-foot units in larger markets.

Early History

In 1921 L. S. Lowe opened a hardware store in the small town of North Wilkesboro, North Carolina. Following his death, his son, James Lowe, took over the business. James Lowe and his brother-in-law, Carl Buchan, served in the U.S. Army during World War II, and during this period Lowe’s sister and mother ran the business.

When Buchan was wounded and discharged from the army in 1943, he returned to North Wilkesboro to help operate Lowe’s hardware business. In 1946 Buchan took a 50 percent interest in the store. Buchan quickly sold out much of the store’s inventory. He then reorganized the store, which became a wholesale-style seller of hardware and building supplies.

When Lowe was discharged from the army, he returned to aid Buchan in operating the business. The two opened a second store and used profits to buy an automobile dealership and a cattle farm. In 1952 Buchan traded his interests in these two businesses for Lowe’s interest in their two stores. Three months later, Buchan opened a third store, in Asheville, North Carolina. Also in 1952 the company was incorporated as Lowe’s North Wilkesboro Hardware, Inc. From 1952 to 1959, Buchan expanded operations, and sales increased from $4.1 million to $27 million. The post-World War II construction boom made the hardware business very profitable. The frenzied demand for supplies meant that sales often were made directly from a freight car on the railway siding that ran by the store. By purchasing stock directly from the manufacturer, Lowe’s was able to avoid paying the higher prices set by wholesalers, which meant lower prices for customers. By 1955 Buchan had six stores.

Rapid Growth During the 1960s and 1970s

The big push to become a major force in the home-building market came in 1960 when Buchan died and an office of the president was created. The company went public in 1961 and was renamed Lowe’s Companies, Inc. Even though the company grew and new locations were added, the layout of the stores remained basically the same: a small retail floor with limited inventory and a lumberyard out back near the railroad tracks. The bulk of Lowe’s customers were contractors and construction companies. By the late 1960s, Lowe’s had more than 50 stores, and sales figures hovered around the $100 million mark.

About this time, the burgeoning do-it-yourself market was beginning to change the face of the construction industry. The rising cost of buying a home or having one remodeled by a professional led more homeowners to take on construction projects themselves. Home centers were becoming the modern version of the neighborhood hardware store. At the same time, the home building market was experiencing periodic slumps, and Lowe’s management began to notice that their sales figures were moving up and down in tandem with housing trends.

In spite of the fluctuations in the housing market, however, Lowe’s revenues rose from $170 million in 1971 to more than $900 million by 1979 (when there were more than 200 stores in the chain). This was due in large part to Lowe’s financing program that helped local builders get loans, coordinated building plans with the Federal Housing Administration (FHA), and then helped contractors fill out the government forms and trained construction companies to build FHA-approved homes.

Began to Target Consumers in Late 1970s

When new home construction virtually came to a standstill in the later part of the 1970s, Lowe’s made the decision to target consumers. The management team believed that increasing consumer sales would reduce the company’s vulnerability during economic and seasonal downswings. In 1980 housing starts decreased, and Lowe’s net income fell 24 percent. While studying the track records of do-it-yourself stores that sold solely to consumers, Lowe’s found that these stores were recording strong sales even during the home-building slumps.

Robert Strickland came to Lowe’s fresh from the Harvard Business School. Rising steadily through the ranks, Strickland had reached the position of chairman of the board in 1978 and, with newly appointed Lowe’s President Leonard Herring, spearheaded the decision to attract consumers in a big way. Using the easily recognizable acronym RSVP (standing for retail sales, volume, and profit), Lowe’s embarked on the new marketing strategy. A consultant was hired to remodel the showrooms, and the resulting layout was similar to that of a supermarket. Seasonal items, such as lawn mowers, were placed in the front of the store. The traffic pattern drew customers to the interior decorating section, then moved on to the back of the store where traditional hardware materials were displayed. The theory behind this traffic pattern said that most consumers may come for the basics but, by walking through the other departments, end up purchasing more. The store in Morganton, North Carolina, was the first location remodeled under the RVSP plan.

In another aspect of the redesign, poster-sized photographs depicting Lowe’s merchandise as it would look in the consumer’s home were used to identify departments rather than lettered signs. Product lines were updated, hours were extended, and advertising was increased. The strategy worked; by 1982 sales had reached $1 billion, and when the figure reached $1.43 billion in 1983, it marked the first time that Lowe’s had made more money selling to consumers than to contractors.

One aspect of the RSVP plan that did not work was Wood World, an extension of the retail floor into one long bay of the lumber warehouse. Fire code regulations required the installation of expensive fire walls and doors, and the idea was soon scrapped. Paneling and other wood products were then put out on the sales floor with the rest of the merchandise.

Shift to Warehouse-Style Stores in Late 1980s

By the late 1980s the retail scene in the United States had once again been transformed, and the era of the “big-box” warehouses had begun. Home Depot Inc. led the way in the home improvement sector and its aggressive expansion of its 105,000-square-foot home-improvement superstores quickly moved the upstart past Lowe’s and other competitors into the number one position. Lowe’s, meanwhile, had surpassed the 300-store mark in fiscal 1989 but those stores averaged barely more than 20,000 square feet. The company had opened some larger units in 1988—including a 60,000-square-foot store in Knoxville, Tennessee, a 40,320-square-foot unit in Boone, North Carolina, and a 60,480-square-foot store in North Chattanooga, Tennessee—but none approached the size of a Home Depot. Lowe’s also made some adjustments to its products lines as core consumer goods areas— hardware, tools, paint, plumbing, home decor, and stereo equipment—were expanded, while such fringe items as exercise equipment, bicycles, and bath linens that had crept in over the previous decade were phased out.

Company Perspectives:

Lowe’s is a specialty retailer—a one-stop destination center for all of our customers’ home improvement needs. We serve the do-it-yourself, consumer durables, and building contractor businesses. Lowe’s operates over four hundred stores in 24 states. Each store caters to retail customers, repair and remodeling contractors, and new construction contractors by combining the merchandise, sales, and service of: a home fashions and interior design center; a lawn and garden center; an appliance and home electronics dealer; a hard goods discounter; a hardware store; an air conditioning, heating, plumbing, and electrical supply center; a building materials supplier.

Beginning in 1989 Lowe’s began a formal shift from being a chain of small stores to being a chain of large, warehouse-style stores, with the company fully committing itself to this change in 1991. During that year, the company took a $71.3 million restructuring charge in order to accelerate the chain conversion. The charge covered the costs of closing, relocating, and remodeling about half of the company’s stores, during the period from 1991 to 1995. Over the course of the four-year restructuring, the size of the new or remodeled stores crept upward from 45,000 square feet to 85,000 to 115,000. The largest size was to be reserved for Lowe’s stores built in larger markets, such as Greensboro, North Carolina, while in the smaller markets the company traditionally served Lowe’s eventually aimed to build 100,000-square-foot units. All of the larger stores featured huge garden centers, as big as 30,000 square feet in size. Overall, Lowe’s aimed to generate more of its sales from consumers, while at the same time continuing to serve contractors. And it also continued to sell major appliances and home electronics (including home office equipment, which was added to the mix in 1994), two categories usually absent from Home Depot stores.

From 1991 to 1993, the company concentrated almost exclusively on the restructuring and made only modest expansion moves, gaining toeholds in Maryland, Indiana, and Illinois for the first time. Although the chain added only five stores overall during this period, total square footage increased from 8.02 million in 1991 to 14.17 million in 1993, translating into an increase from 26,000 in average square footage to 45,500. In 1994 and 1995 Lowe’s added 54 more stores, bringing the total to 365, and adding the states of Iowa, Michigan, and Oklahoma to its territory. Also in 1995, the company began to aggressively expand in Texas, going from two stores in 1994 to 23 stores in 1996. Lowe’s also expanded into the state of New York in 1996 and into Kansas in 1997. Meanwhile, in August 1995 Herring retired and was succeeded as president and CEO by Robert L. Tillman, who had served as chief operating officer.

By 1996 there were more than 400 Lowe’s stores, averaging more than 75,000 square feet per unit. Sales had nearly tripled since the restructuring was announced in 1991, increasing from $3.1 billion to $8.6 billion. Net earnings reached a record $292.2 million in 1996. With more than 70 percent of its stores now “big boxes,” Lowe’s began to concentrate more on expanding into new territory in the mid-1990s, aiming to reach the 600-store mark by century-end (about 40 stores were to be added during 1997 alone). During the final years of the 1990s, the company planned to spend 80 percent of its capital expenditures on building new stores, some of which were planned for large metropolitan areas, such as Atlanta’s—territory traditionally shunned by the chain. It was clear that Lowe’s, which had thus far managed to thrive—not just survive—in the cutthroat home improvement world of the 1990s, was determined to bolster its number two position and to cut into Home Depot’s lead.

Principal Subsidiaries

Lowe’s Home Centers, Inc.; The Contractor Yard, Inc.; Sterling Advertising, Ltd.; LF Corporation; LG Sourcing, Inc.; Lowe’s Home Centres (Canada), Inc.

Further Reading

“Analyst Predicts Two to Dominate Industry,” Chilton’s Hardware Age, May 1995, p. 12.

Auchmutey, Jim, “Warehouses Stack the Deck,” Hardware Age, March 1981.

“Big-Store Bonanza,” Forbes, December 20, 1993, pp. 14-15.

Cochran, Thomas, “Handyman’s Special,” Barron’s, June 18, 1980.

Curtis, Carol E., “How Much Sheetrock, Ma’am?,” Forbes, August 30, 1982, p. 70.

——, “Playing Do-It-Yourself,” Forbes, May 10, 1982, p. 314.

David, Gregory E., “Stomping Elephant,” Financial World, September 28, 1993, pp. 40-41.

Feder, Barnaby J., “In Hardware War, Cooperation May Mean Survival,” New York Times, June 11, 1997, pp. D1, D7.

Hartnett, Michael, “Lowe’s Plan: Think Big,” Stores, November 1993, pp. 58-60.

Korn, Don, “Lowe’s Gets Ready to Raise the Roof,” Sales Management, July 7, 1975.

“Lowe’s Steps It Up,” Do-lt-Yourself Retailing, August 1995, p. 259.

“Lowe’s Vision—The Wal-Mart of Home Centers,” Chain Store Age Executive, May 1989.

“Lowe’s Zeroes in on Customers,” Chain Store Age Executive, August 1979.

Lubove, Seth, “A Chain’s Weak Links,” Forbes, January 21, 1991, p. 76.

Mallory, Maria, “This Do-It-Yourself Store Is Really Doing It,” Business Week, May 2, 1994, p. 108.

McCormack, Karyn, “Casualties of War,” Financial World, May 20, 1997, pp. 45-46, 48, 53.

Mclntyre, Deni, No Place Like Lowe’s: 50 Years of Retailing for the American Home, North Wilkesboro, North Carolina: Lowe’s, 1996, 160 p.

“Strickland Positions Lowe’s for Conquest,” Building Supply Home Centers, March 1993, pp. 48-50.

Sutton, Rodney K., “Lowe’s Conversion Ends in Its Rebirth,” Building Supply Home Centers, June 1994, pp. 36-38, 40, 42.

—Mary F. Sworsky

—updated by David E. Salamie

Lowe’s Companies, Inc.

Post Office Box 1111
North Wilkesboro, North Carolina 28656
U.S.A.
(919) 651-4000
Fax: (919) 651-4766

Public Company
Incorporated: 1952 as Lowe’s North Wilkesboro Hardware, Inc.
Employees: 15,556
Sales: $2.83 billion
Stock Exchanges: New York Pacific London

Lowe’s Companies, Inc., operates a chain of retail stores that sells building materials and related products to the do-it-yourself home improvement and home construction markets. At the end of 1990, the company operated 309 stores, primarily in the southern United States.

In 1921 L.S. Lowe opened a hardware store in the small town of North Wilkesboro, North Carolina. Following his death, his son, James Lowe, took over the business. James Lowe and his brother-in-law, Carl Buchan, served in the U.S. Army during World War II, and during this period Lowe’s sister and mother ran the business.

When Buchan was wounded and discharged from the army in 1943, he returned to North Wilkesboro to help operate Lowe’s hardware business. In 1946 Buchan took a 50% interest in the store. Buchan quickly sold out much of the store’s inventory. He then reorganized the store, which became a wholesale-style seller of hardware and building supplies.

When Lowe was discharged from the army, he returned to aid Buchan in operating the business. The two opened a second store and used profits to buy an automobile dealership and a cattle farm. In 1952 Buchan traded his interests in these two businesses for Lowe’s interest in their two stores. Three months later, Buchan opened a third store, in Asheville, North Carolina. From 1952 to 1959, Buchan expanded operations, and sales increased from $4.1 million to $27 million. The post-World War II construction boom made the hardware business very profitable. The frenzied demand for supplies meant that sales often were made directly from a freight car on the railway siding that ran by the store. By purchasing stock directly from the manufacturer, Lowe’s was able to avoid paying the higher prices set by wholesalers, which meant lower prices for customers. By 1955 Buchan had six stores.

The big push to become a major force in the home-building market came in 1960 when Buchan died and an office of the president was created. The company went public in 1961. Even though the company grew and new locations were added, the layout of the stores remained basically the same: a small retail floor with limited inventory and a lumberyard out back near the railroad tracks. The bulk of Lowe’s customers were contractors and construction companies. By the late 1960s, Lowe’s had more than 50 stores, and sales figures hovered around the $100 million mark.

About this time, the burgeoning do-it-yourself market was beginning to change the face of the construction industry. The rising cost of buying a home or having one remodeled by a professional led more homeowners to take on construction projects themselves. Home centers were becoming the modern version of the neighborhood hardware store. At the same time, the home building market was experiencing periodic slumps, and Lowe’s management began to notice that their sales figures were moving up and down in tandem with housing trends.

In spite of the fluctuations in the housing market, however, Lowe’s revenues rose from $170 million in 1971 to more than $900 million by 1979. This was due in large part to Lowe’s financing program that helped local builders get loans, coordinated building plans with the Federal Housing Administration (FHA), and then helped contractors fill out the government forms and trained construction companies to build FHA-approved homes.

When new home construction virtually came to a standstill in the later part of the 1970s, Lowe’s made the decision to target consumers. The management team believed that increasing consumer sales would reduce the company’s vulnerability during economic and seasonal downswings. In 1980 housing starts decreased, and Lowe’s net income fell 24%. While studying the track records of do-it-yourself stores that sold solely to consumers, Lowe’s found that these stores were recording strong sales even during the home-building slumps.

Robert Strickland came to Lowe’s fresh from the Harvard Business School. Rising steadily through the ranks, Strickland had reached the position of chairman of the board in 1978 and, with newly appointed Lowe’s President Leonard Herring, spearheaded the decision to attract consumers in a big way. Using the easily recognizable acronym RSVP (standing for retail sales, volume, and profit), Lowe’s embarked on the new marketing strategy. A consultant was hired to remodel the showrooms, and the resulting layout was similar to that of a supermarket. Seasonal items, such as lawn mowers, were placed in the front of the store. The traffic pattern drew customers to the interior decorating section, then moved on to the back of the store where traditional hardware materials were displayed. The theory behind this traffic pattern said that most consumers may come for the basics but, by walking through the other departments, end up purchasing more. The store in Morganton, North Carolina, was the first location remodeled under the RVSP plan.

In another aspect of the redesign, poster-sized photographs depicting Lowe’s merchandise as it would look in the consumer’s home were used to identify departments rather than lettered signs. Product lines were updated, hours were extended, and advertising was increased. The strategy worked; by 1982 sales had reached $1 billion, and when the figure reached $1.43 billion in 1983, it marked the first time that Lowe’s had made more money selling to consumers than to contractors.

One aspect of the RSVP plan that did not work was Wood World, an extension of the retail floor into one long bay of the lumber warehouse. Fire code regulations required the installation of expensive fire walls and doors, and the idea was soon scrapped. Paneling and other wood products were then put out on the sales floor with the rest of the merchandise.

In the later years of the 1980s, Lowe’s began increasing the size of its stores. Prior to that time the stores were approximately 20,000 square feet. In 1988 the company opened a 60,000-square-foot store in Knoxville, Tennessee, a 40,320-square-foot unit in Boone, North Carolina, and a 60,480-square-foot store in North Chattanooga, Tennessee. Lowe’s planned for all future units to be either 45,000 or 65,000 square feet. To accommodate the expansion, the company began to lease more of its own space. In 1989 Lowe’s owned 89% of the buildings that housed their stores. By the end of 1991, Lowe’s expected to add one million square feet of space, bringing the total to eight million.

Future plans also called for the expansion of the core consumer goods: hardware, tools, paint, plumbing, home decor, and stereo equipment. Fringe items that had crept in over the past decade, including exercise equipment, bicycles, and bath linens were to be phased out.

Traditionally, Lowe’s preferred to move into small- to medium-sized towns where they did not have to compete with a large local wholesaler. This may change in the 1990s. Industry analysts predicted Lowe’s desire to increase its market share would require moves into more heavily populated geographical areas and larger stores.

Further Reading

Korn, Don, “Lowe’s Gets Ready to Raise the Roof,” Sales Management, July 7, 1975; “Lowe’s zeroes in on customers,” Chain Store Age Executive, August 1979; Cochran, Thomas, “Handyman’s Special,” Barron’s, June 18, 1980; Auchmutey, Jim, “Warehouses stack the deck,” Hardware Age, March 1981; Curtis, Carol E., “How much sheetrock, ma’am?,” Forbes, August 30, 1982; “Lowe’s Vision—The Wal-Mart of Home Centers,” Chain Store Age Executive, May 1989.

—Mary F. Sworsky

Lowe's Companies, Inc.

1000 Lowe's Boulevard
Mooresville, North Carolina 28117-8520
U.S.A.
Telephone: (704) 758-1000
Toll Free: (800) 445-6937
Fax: (704) 757-0611
Web site: http://www.lowes.com

Public Company
Incorporated: 1952 as Lowe's North Wilkesboro Hardware, Inc.
Employees: 185,314
Sales: $43.24 billion (2005)
Stock Exchanges: New York
Ticker Symbol: LOW
NAIC: 444110 Home Centers; 443111 Household Appliance Stores; 444120 Paint and Wallpaper Stores; 444130 Hardware Stores; 444190 Other Building Material Dealers; 444210 Outdoor Power Equipment Stores; 444220 Nursery and Garden Centers

Lowe's Companies, Inc., is the second largest home improvement retailer in the United States (trailing The Home Depot, Inc.) holding about 6 percent of the $700 billion home improvement market, and also ranks as the seventh largest U.S. retailer overall. More than 1,250 Lowe's stores in 49 states (the exception being Vermont) serve do-it-yourself customers, so-called do-it-for-me customers using the stores' installation services, and commercial customers, including professional contractors, electricians, landscapers, painters, and plumbers. Lowe's relies on two prototype stores, a 117,000-square-foot version designed for larger metropolitan markets and a 94,000-square-foot model suitable for small and midsized markets. The average Lowe's carries 40,000 products for home decorating, maintenance, repair, remodeling, and construction. Hundreds of thousands more are available through special orders. Lowe's offers installation services in more than 40 product categories, with the greatest sales coming in flooring, millwork, and kitchen cabinets and countertops. Such services generate approximately 6 percent of the corporation's total revenues.

EARLY HISTORY

In 1921 L. S. Lowe opened a hardware store in the small town of North Wilkesboro, North Carolina, under the name Mr. L. S. Lowe's North Wilkesboro Hardware. Following his death, his son, James Lowe, took over the business. James Lowe and his brother-in-law, Carl Buchan, served in the U.S. Army during World War II, and during this period Lowe's sister and mother ran the business.

When Buchan was wounded and discharged from the army in 1943, he returned to North Wilkesboro to help operate Lowe's hardware business. In 1946 Buchan took a 50 percent interest in the store. Buchan quickly sold out much of the store's inventory. He then reorganized the store, which became a wholesale-style seller of hardware and building supplies.

When Lowe was discharged from the army, he returned to aid Buchan in operating the business. The two opened a second store and used profits to buy an automobile dealership and a cattle farm. In 1952 Buchan traded his interests in these two businesses for Lowe's interest in their two stores. Three months later, Buchan opened a third store, in Asheville, North Carolina. Also in 1952 the company was incorporated as Lowe's North Wilkesboro Hardware, Inc. According to company lore, Buchan retained the Lowe's name so he could use the slogan "Lowe's low prices." From 1952 to 1959, Buchan expanded operations, and sales increased from $4.1 million to $27 million. The post-World War II construction boom made the hardware business very profitable. The frenzied demand for supplies meant that sales often were made directly from a freight car on the railway siding that ran by the store. By purchasing stock directly from the manufacturer, Lowe's was able to avoid paying the higher prices set by wholesalers, which meant lower prices for customers. By 1960 Buchan had 15 stores.

RAPID GROWTH

The big push to become a major force in the home-building market came in 1960 when Buchan died and an office of the president was created. The company went public in 1961 and was renamed Lowe's Companies, Inc. Even though the company grew and new locations were added, the layout of the stores remained basically the same: a small retail floor with limited inventory and a lumberyard out back near the railroad tracks. The bulk of Lowe's customers were contractors and construction companies. By the late 1960s, Lowe's had more than 50 stores, and sales figures hovered around the $100 million mark.

About this time, the burgeoning do-it-yourself market was beginning to change the face of the construction industry. The rising cost of buying a home or having one remodeled by a professional led more homeowners to take on construction projects themselves. Home centers were becoming the modern version of the neighborhood hardware store. At the same time, the home building market was experiencing periodic slumps, and Lowe's management began to notice that their sales figures were moving up and down in tandem with housing trends.

In spite of the fluctuations in the housing market, however, Lowe's revenues rose from $170 million in 1971 to more than $900 million by 1979 (when there were more than 200 stores in the chain). This was due in large part to Lowe's financing program that helped local builders get loans, coordinated building plans with the Federal Housing Administration (FHA), and then helped contractors fill out the government forms and trained construction companies to build FHA-approved homes.

TARGETING CONSUMERS

When new home construction virtually came to a standstill in the later part of the 1970s, Lowe's made the decision to target consumers. The management team believed that increasing consumer sales would reduce the company's vulnerability during economic and seasonal downswings. In 1980 housing starts decreased, and Lowe's net income fell 24 percent. While studying the track records of do-it-yourself stores that sold solely to consumers, Lowe's found that these stores were recording strong sales even during the home-building slumps.

COMPANY PERSPECTIVES

Our growth is driven by our clear and well-defined strategy to put customers first and offer innovative home improvement products and services to make their lives easier. Our shelves are stocked with the respected brands that our customers trust, at everyday low prices. We continue to enhance the way we meet our customers' needs through advancements in technology and distribution, with services such as professional installation, and with enhancements to the special order process to improve the shopping experience. All of these efforts are designed to drive profitable growth and create value for our customers and shareholders.

Robert Strickland came to Lowe's fresh from the Harvard Business School. Rising steadily through the ranks, Strickland had reached the position of chairman of the board in 1978 and, with newly appointed Lowe's President Leonard Herring, spearheaded the decision to attract consumers in a big way. Using the easily recognizable acronym RSVP (standing for retail sales, volume, and profit), Lowe's embarked on the new marketing strategy. A consultant was hired to remodel the showrooms, and the resulting layout was similar to that of a supermarket. Seasonal items, such as lawn mowers, were placed in the front of the store. The traffic pattern drew customers to the interior decorating section, then moved on to the back of the store where traditional hardware materials were displayed. The theory behind this traffic pattern said that most consumers may come for the basics but, by walking through the other departments, end up purchasing more. The store in Morganton, North Carolina, was the first location remodeled under the RVSP plan.

In another aspect of the redesign, poster-sized photographs depicting Lowe's merchandise as it would look in the consumer's home were used to identify departments rather than lettered signs. Product lines were updated, hours were extended, and advertising was increased. The strategy worked; by 1982 sales had reached $1 billion, and when the figure reached $1.43 billion in 1983, it marked the first time that Lowe's had made more money selling to consumers than to contractors.

One aspect of the RSVP plan that did not work was Wood World, an extension of the retail floor into one long bay of the lumber warehouse. Fire code regulations required the installation of expensive fire walls and doors, and the idea was soon scrapped. Paneling and other wood products were then put out on the sales floor with the rest of the merchandise.

SHIFT TO WAREHOUSE-STYLE STORES

By the late 1980s the retail scene in the United States had once again been transformed, and the era of the "big-box" warehouses had begun. Home Depot, Inc. led the way in the home improvement sector and its aggressive expansion of its 105,000-square-foot home improvement superstores quickly moved the upstart past Lowe's and other competitors into the number one position. Lowe's, meanwhile, had surpassed the 300-store mark in fiscal 1989 but those stores averaged barely more than 20,000 square feet. The company had opened some larger units in 1988, including a 60,000-square-foot store in Knoxville, Tennessee, a 40,320-square-foot unit in Boone, North Carolina, and a 60,480-square-foot store in North Chattanooga, Tennessee, but none approached the size of a Home Depot. Lowe's also made some adjustments to its product lines as core consumer goods areas—hardware, tools, paint, plumbing, home decor, and stereo equipment—were expanded, while such fringe items as exercise equipment, bicycles, and bath linens that had crept in over the previous decade were phased out.

In 1989 Lowe's began a formal shift from being a chain of small stores to being a chain of large, warehouse-style stores, with the company fully committing itself to this change in 1991. During that year, the company took a $71.3 million restructuring charge in order to accelerate the chain conversion. The charge covered the costs of closing, relocating, and remodeling about half of the company's stores, during the period from 1991 to 1995. Over the course of the four-year restructuring, the size of the new or remodeled stores crept upward from 45,000 square feet to 85,000 to 115,000. The largest size was to be reserved for Lowe's stores built in larger markets, such as Greensboro, North Carolina, while in the smaller markets the company traditionally served Lowe's eventually aimed to build 100,000-square-foot units. All of the larger stores featured huge garden centers, as big as 30,000 square feet in size. Overall, Lowe's aimed to generate more of its sales from consumers, while at the same time continuing to serve contractors. It also continued to sell major appliances and home electronics (including home office equipment, which was added to the mix in 1994), two categories usually absent from Home Depot stores.

KEY DATES

1921:

L. S. Lowe opens a hardware store in North Wilkesboro, North Carolina, called Mr. L. S. Lowe's North Wilkesboro Hardware.

1946:

Carl Buchan buys 50 percent interest in the store.

1952:

Buchan gains full control of the concern, which he incorporates as Lowe's North Wilkesboro Hardware, Inc.

1961:

Following Buchan's death the previous year, the new managers take the firm public and rename it Lowe's Companies, Inc.

1982:

A shift to targeting do-it-yourselfers helps push revenues past the $1 billion mark.

1989:

Transition to large, warehouse-style stores begins.

1997:

Company opens first stores in an urban market.

1999:

Eagle Hardware & Garden, Inc. is acquired.

2004:

Store count surpasses the 1,000 mark.

From 1991 to 1993, the company concentrated almost exclusively on the restructuring and made only modest expansion moves, gaining toeholds in Maryland, Indiana, and Illinois for the first time. Although the chain added only five stores overall during this period, total square footage increased from 8.02 million in 1991 to 14.17 million in 1993, translating into an increase from 26,000 in average square footage to 45,500. In 1994 and 1995 Lowe's added 54 more stores, bringing the total to 365, and adding the states of Iowa, Michigan, and Oklahoma to its territory. Also in 1995, the company began to aggressively expand in Texas, going from two stores in 1994 to 23 stores in 1996. Lowe's also expanded into the state of New York in 1996 and into Kansas in 1997. Meanwhile, in August 1996 Herring retired and was succeeded as president and CEO by Robert L. Tillman, who had served as chief operating officer. Tillman was named chairman as well in January 1998.

By 1996 there were more than 400 Lowe's stores, averaging more than 75,000 square feet per unit. Sales had nearly tripled since the restructuring was announced in 1991, increasing from $3.1 billion to $8.6 billion. Net earnings reached a record $292.2 million in 1996. With more than 70 percent of its stores now "big boxes," Lowe's began to concentrate more on expanding into new territory in the mid-1990s, aiming to reach the 600&-store mark by century-end. During 1997 Lowe's opened 42 more stores. Among these, Lowe's included a test of its first stores in an urban market, Dallas, one in which Home Depot was already entrenched. Despite the competition, the Dallas stores exceeded initial expectations by 20 percent, and from then on, Lowe's began targeting both large metropolitan areas and its more traditional small and medium-sized markets for growth.

GOING COAST TO COAST

To aid its expansion, Lowe's built six new, one-million-square-foot distribution centers located around the country. These centers supported further geographic expansion, including a $1.5 billion plan launched in 1998 to build more than 100 new stores in the western United States. Among the initial markets targeted were Los Angeles, San Diego, Las Vegas, Phoenix, and Tucson, Arizona. Lowe's westward expansion was accelerated through the April 1999 acquisition of Eagle Hardware & Garden, Inc. in a stock swap valued at about $1.34 billion. Eagle, based in Renton, Washington, operated 38 big box home improvement stores in ten western states and had revenues of nearly $1 billion. The Eagle outlets were gradually rebranded under the Lowe's name.

By the end of 1999 the Lowe's store count had reached 550, and its revenues of $15.45 billion made it the 15th largest retailer in the country. In 2000 another 75 stores were added, and the company revamped its web site into a major e-commerce site. Early the following year, Lowe's rolled out its first national television advertising campaign, using the tag line, "Improving Home Improvement," and touting itself as cleaner, better organized, and better lit than the warehouse competition (implying, without naming, Home Depot). The campaign's themes were consistent with Lowe's push to attract female consumers, a strategy that a number of analysts considered a key to the company's success; Lowe's catered to women because company research found that females made the vast majority of home improvement decisions. The drive to create a nationwide chain also continued with the launch of a $1.3 billion, five-year move into the Northeast, where Lowe's aimed to open more than 75 stores ranging from Philadelphia to Maine, with 25 alone in the Boston area. The first New York City store opened in the spring of 2001. Late in 2002 Lowe's announced further plans to open more than 60 stores in the New York metropolitan area and northern New Jersey. In 2003 the company introduced a smaller prototype format measuring 94,000 square feet that was designed for smaller, mainly rural markets. A 116,000-square-foot store continued to be the prototype for larger markets.

During the fiscal year ending in January 2005, Lowe's store count passed the 1,000 mark. At the end of the fiscal year, Tillman stepped down from his position as chairman and CEO, having led the company through an amazing period of growth. Between 1996 and 2004, revenues quadrupled, from $9.06 billion to $36.46 billion, while profits jumped sevenfold, from $310 million to $2.18 billion. Lowe's was the 11th largest retailer in the country. Taking on the daunting task of filling Tillman's shoes was Robert Niblock, who had joined Lowe's in 1993 and served as company president since 2003.

Rather than slowing, growth accelerated under the new leader, as no fewer than 150 new Lowe's opened during fiscal 2005, including the first stores in New Hampshire, the 49th state to join the company ranks. A like number or slightly more units were planned to be added over the next two years, toward an eventual total of between 1,800 and 2,000. At the same time, Lowe's was seeking to spur growth by increasing revenues derived from three areas: special orders, installation services, and commercial customers such as contractors, professional tradespeople, and property management professionals. In June 2005 the company announced plans to move into the Canadian market, aiming to open as many as ten stores in the Toronto area during 2007. Expansion into other international markets was under study. As Lowe's posted another record year in fiscal 2005, profits of $2.77 billion on revenues of $43.24 billion, one possible cloud on the horizon was a cooling of what had been a red-hot housing market, which had the potential to recipitate a concomitant downturn in the home improvement industry.

                                          Mary F. Sworsky

             Updated, David E. Salamie

PRINCIPAL SUBSIDIARIES

Lowe's Home Centers, Inc.; Lowe's HIW, Inc.

PRINCIPAL COMPETITORS

The Home Depot, Inc.; Menard, Inc.; True Value Company; Wal-Mart Stores, Inc.; Ace Hardware Corporation; Sears, Roebuck and Co.

FURTHER READING

"Analyst Predicts Two to Dominate Industry," Chilton's Hardware Age, May 1995, p. 12.

Auchmutey, Jim, "Warehouses Stack the Deck," Hardware Age, March 1981.

Berner, Robert, "Lowe's Cos. to Buy Eagle Hardware in $1 Billion Deal," Wall Street Journal, November 23, 1998, p. B15.

"Big-Store Bonanza," Forbes, December 20, 1993, pp. 14-15.

Carlo, Andrew M., "Catch Me if You Can: Riding High, Lowe's Executives Challenge Competitors," Home Channel News, June 16, 2003, pp. 1, 56-57.

Cochran, Thomas, "Handyman's Special," Barron's, June 18, 1980.

Curtis, Carol E., "How Much Sheetrock, Ma'am?," Forbes, August 30, 1982, p. 70.

―――――, "Playing Do-It-Yourself," Forbes, May 10, 1982, p. 314.

David, Gregory E., "Stomping Elephant," Financial World, September 28, 1993, pp. 40-41.

Dyer, Leigh, "Retiring CEO to Leave with Sun Shining on Lowe's," Charlotte (N.C.) Observer, November 16, 2004.

Feder, Barnaby J., "In Hardware War, Cooperation May Mean Survival," New York Times, June 11, 1997, pp. D1, D7.

Hartnett, Michael, "Lowe's Plan: Think Big," Stores, November 1993, pp. 58-60.

Johnson, Roy S., "Lowe's Borrows the Blueprint," Fortune, November 23, 1998, pp. 212, 215, 217, 219.

Korn, Don, "Lowe's Gets Ready to Raise the Roof," Sales Management, July 7, 1975.

"Lowe's Steps It Up," Do-It-Yourself Retailing, August 1995, p. 259.

"Lowe's to Expand into Canada," Charlotte (N.C.) Business Journal, June 6, 2005.

"Lowe's Vision—The Wal-Mart of Home Centers," Chain Store Age Executive, May 1989.

"Lowe's Zeroes in on Customers," Chain Store Age Executive, August 1979.

Lubove, Seth, "A Chain's Weak Links," Forbes, January 21, 1991, p. 76.

Mallory, Maria, "This Do-It-Yourself Store Is Really Doing It," Business Week, May 2, 1994, p. 108.

Masters, Greg, "Lowe's Turns the Screws on Urban Competition," Retail Merchandiser, March 2004, p. 48.

McCormack, Karyn, "Casualties of War," Financial World, May 20, 1997, pp. 45-46, 48, 53.

McIntyre, Deni, No Place Like Lowe's: 50 Years of Retailing for the American Home, North Wilkesboro, N.C.: Lowe's, 1996, 160 p.

Nannery, Matt, "Lowe's Promise," Home Channel News, April 1, 2003, pp. 24, 26, 46.

Pascual, Aixa M., "Lowe's Is Sprucing Up Its House," Business Week, June 3, 2002, pp. 56, 58.

Postman, Lore, "Home Repair Giant Lowe's Shapes Strategy Around Aging Handyman," Charlotte (N.C.) Observer, July 26, 1998.

Seccombe, Jane, "Lowe's Sets Fast Pace for Growth," Winston-Salem (N.C.) Journal, May 29, 1999, p. D1.

"Strickland Positions Lowe's for Conquest," Building Supply Home Centers, March 1993, pp. 48-50.

Sutton, Rodney K., "Lowe's Conversion Ends in Its Rebirth," Building Supply Home Centers, June 1994, pp. 36-38, 40, 42.

Williams, Christopher C., "The Lowe's Advantage," Barron's, April 24, 2006, pp. 33, 35.

Lowe's Companies, Inc.

founded: 1957

Contact Information:

headquarters: po box 1111
north wilkesboro, nc 28656 phone: (336)658-4000 fax: (336)658-4766 toll free: (800)445-6937 url: http://www.lowes.com

OVERVIEW

Lowe's Companies, Inc. is the second largest home improvement chain in the world, with more than 740 stores located in 42 states serving over six million individual and commercial customers. The 55-year-old company, headquartered in Wilkesboro, North Carolina, employs over 100,000 people across the nation. States with the largest number of Lowe's stores include North Carolina (77), Texas (63), Ohio (48), Florida (47), and Virginia (42). Typically, a Lowe's store consists of a sales floor approximately 120,000 square feet in size, as well as a lawn and garden center consisting of another 30,000 square feet. Lowe's offers a wide range of products and services in the areas of home improvement, home decor, home maintenance, home repair and remodeling, and maintenance of commercial facilities.

During 2000, 75 percent of Lowe's sales revenues were generated by do-it-yourself and buy-it-yourself consumers, and 25 percent came from commercial business. Retail customers include all personal-use shoppers who buy products and services for home building, repair, and maintenance. Commercial customers are professional contractors in such fields as remodeling, electrical work, landscaping, painting, plumbing, and maintenance professionals. To meet customers' wide variety of needs, all Lowe's stores provide a home fashions and interior design center; a lawn and garden center; a selection of appliances; a hard goods and hardware store; an air conditioning, heating, and plumbing supply center; and a building materials center.

COMPANY FINANCES

For fiscal year 2001, ending February 2, 2002, Lowe's reported a net income of $1.02 billion on $22.1 billion in revenues. This compares favorably to net income in fiscal 2000 of $810 million on revenues of $18.8 billion. Earnings in fiscal 2001 translated into $1.30 per share versus $1.05 per share in fiscal 2000. In fiscal 1999, the company generated $15.9 billion in sales, resulting in a net profit of $673,000.

Both income and sales have grown steadily since 1994. The nearly 18 percent increase in sales during fiscal 2001 was driven by a 19 percent increase in square footage from new and relocated stores and a 2.4 percent increase in same-store sales. Stock prices closed in January of 2000, 2001, and 2002 at $22.21, $26.68, and $46.07 respectively. Lowe's made a particularly strong showing in the fourth quarter of fiscal 2001 with net earnings increasing 55 percent and same-store sales increasing over 7 percent compared to the same period in 2000.

ANALYSTS' OPINIONS

Analysts consider Lowe's to be a solid company with significant and consistent growth potential. During the first quarter of 2002, most analysts marked Lowe's as a Strong Buy with a target stock price of $50. In fact, some analysts believed that Lowe's own estimates for upcoming years possibly were too conservative. Based on plans for expansion in square footage, along with ongoing cost controls and inventory management, they looked for Lowe's to top its expected 20 percent increase in total sales. Those analysts who see a bright future for Lowe's stock consider the company an excellent long-term investment opportunity.

HISTORY

In 1921, L.S. Lowe opened a hardware store in North Wilkesboro, North Carolina. Upon his death, Lowe's son James and James' brother-in-law, Carl Buchan, continued to operate the family business until both men were called into military service during World War II. For several years, Lowe's sister and mother ran the store. Before the end of 1943, Buchan was wounded and returned to North Carolina. Taking a 50 percent interest in the store, Buchan sold off much of the existing merchandise and reorganized the business as a wholesale warehouse specializing in hardware and building supplies. Lowe returned from military service in 1946 to assist Buchan. The operation produced enough revenue to allow the two men to open a second store as well as purchase an automobile dealership and a cattle ranch.

FAST FACTS: About Lowe's Companies, Inc.

Ownership: Lowe's Companies, Inc. went public in 1961. It is traded on the New York, Pacific, and London Stock Exchanges.

Ticker Symbol: LOW

Officers: Robert L. Tillman, 57, Chmn. and CEO, 2001 base salary $935,000, 2001 bonus $1.9 million; Larry D. Stone, 49, EVP Store Operations, 2001 base salary $600,000, 2001 bonus $983,000; William C. Warden, Jr., 48, EVP Administration, 2001 base salary $470,000, 2001 bonus $770,000; Thomas E. Whiddon, EVP Logistics and Technology, 2001 base salary $470,000, 2001 bonus $770,000; Dale C. Pond, EVP Merchandising, 2001 base salary $450,000, 2001 bonus $737,000

Employees: 100,000

Principal Subsidiary Companies: Lowe's primary subsidiaries are Lowe's Home Centers, Inc.; The Contractor Yard, Inc.; Sterling Advertising, Ltd.; LF Corp.; LG Sourcing, Inc.; and Lowe's Home Centres (Canada), Inc.

Chief Competitors: Lowe's Companies, Inc.'s competitors also cater to the do-it-yourself home improvement market. Although Lowe's receives its principal competition from Home Depot, it also competes against Ace Hardware, Best Buy, Menard, Payless Cashways, Sears, Sherwin-Williams, Sutherland Lumber, and Wal-Mart as well as regional and local chains.

In 1952 Buchan traded the automobile dealership and the cattle ranch for Lowe's half-interest in the two stores. In the same year, Buchan opened a third store in Asheville, North Carolina. In 1955, with six stores now in operation, Buchan incorporated the business as Lowe's North Wilkesboro Hardware, Inc. During the 1950s, the business grew rapidly, primarily as a result of the postwar building boom that created an endless demand for hardware and building supplies. Between 1952 and 1959, sales increased from $4.1 million to $27 million. The company's business philosophy was simple: buy products directly from the manufacturer to avoid paying higher wholesale prices from distributors. Customers were primarily building contractors and construction companies. Stores were generally small with limited inventory and a lumberyard behind the store near railroad tracks that provided easy access to delivery.

Buchan died in 1960, and the following year, with sales reaching $30.7 million, the company went public and was renamed Lowe's Companies, Inc. By 1969, the company operated 50 stores and revenues neared $1 billion. Just two years later, the company posted a net income of $170 million; and by 1979, 200 Lowe's stores were producing in excess of $900 million in profits.

Despite its rapid growth, Lowe's noticed that revenues paralleled increases and declines in the housing market. During the 1970s when the price of homes and homebuilding rose considerably and the cost of professional remodeling became prohibitive, homeowners began taking on fix-it projects themselves. When the housing market came to a near dead stop in the late 1970s, Lowe's made the decision to realign the company to target do-it-yourself consumers rather than commercial contractors. Correctly, Lowe's management expected that the company would be more protected from economic swings that traditionally affected the housing industry.

To attract consumers, stores were redesigned to resemble a supermarket. Seasonal and nonessential products were placed at the front of the store on the assumption that customers would come in for basic hardware supplies but buy more when exposed to such departments as home decor and appliances. Product selection was upgraded and expanded, store hours were extended, and the advertising budget was increased. The strategy was a spectacular success. By 1982, sales topped $1 billion and the following year became the first that Lowe's consumer sales outdid its commercial sales.

By the end of the 1980s, the do-it-yourself home improvement market was clearly here to stay. Home Depot arrived on the scene and quickly surpassed Lowe's to lead the industry. Modeling Home Depot's much larger floor plan, in 1989 Lowe's began greatly expanding its own square footage from 20,000 square feet to 60,000 square feet, which was still significantly smaller than Home Depot's standard 100,000-plus square feet stores. Becoming more aggressive in its expansion efforts between 1991 and 1995, Lowe's remodeled or relocated approximately half of its stores, bringing the square footage to between 85,000 and 115,000.

After focusing for several years on restructuring, Lowe's began to expand into new markets again in the mid-1990s. The company operated 520, 576, 620, and 744 "warehouses" in 1998, 1999, 2000, and 2001, respectively. In 1999, Lowe's purchased Washington-based Eagle Hardware for $1 billion and converted its stores over to the Lowe's name. Although the majority of Lowe's stores are located in the Midwest and Southeast, Lowe's has increased its presence in other regions, especially on the West Coast with 35 stores in California and 20 stores in Washington.

CHRONOLOGY: Key Dates for Lowe's Companies, Inc.

1921:

L.S. Lowe opens a hardware store in North Wilkesboro, North Carolina

1943:

Lowe's son, James Lowe, runs the business with brother-in-law Carl Buchan

1952:

Buchan buys out Lowe, who trades his interest in the company for an auto dealership and a cattle farm

1959:

Post-war construction boom generates sales of $27 million, up from slightly more than $4 million in 1952

1961:

Lowe's goes public with most customers being contractors and construction workers

1971:

Company is operating over 50 stores with revenues reaching $170 million

1983:

For the first time, sales to consumer do-ityourselfers surpasses sales to contractors and sales reach $1.43 billion

1990:

Lowe's is operating 309 stores located primarily in the southern United States

1995:

Web site launched, featuring do-it-yourself tips and locations of stores

1996:

Initiation of major expansion project by opening 37 new stores

1998:

Dedication of $1.5 billion to opening 100 new stores in western United States

2001:

Fiscal year 2001 sees net earnings increase 21 percent to $1.05 billion on total revenues of $22.1 billion

STRATEGY

Customer satisfaction is at the heart of Lowe's retail strategy. Using the tag line, "Improving Home Improvement," the company is constantly looking to improve its warehouses and increase its line of products and available services in order to provide a customer-friendly environment that offers the products consumers want. For example, after researching consumer preferences, Lowe's discovered that important aspects of Lowe's warehouses included a bright, friendly store environment, informative displays, and a practical store layout. This information helped Lowe's determine product display, design, and location. Lowe's also provides goods and services to consumers with a broad range of needs, tastes, and budgets. The company attempts to include a variety of offerings within a product line with clear information on individual features.

An important factor in Lowe's profitability is inventory management, which is based on the company's network of distribution centers. The key is to maintain minimal levels of merchandise on the warehouse shelves without sacrificing selection choice or availability. Regional distribution centers allow for rapid restocking of individual stores, which means better customer service while minimizing distribution and inventory costs. Lowe's operates seven regional distribution centers along with nine smaller support operations that handle merchandise with unique shipping requirements due to size or packaging, such as lumber, special imports, and some building materials. Approximately 50 percent of a store's merchandise arrives from a Lowe's distribution facility. The remainder is shipped directly from suppliers.

INFLUENCES

Lowe's is a leader in the phenomenon of the do-it-yourself home improvement trend. Along with being the second largest home improvement retailer, it is the 14th largest retailer in the United States and the 30th largest retailer in the world. However, despite its big chain status and direct competition with industry leader Home Depot, 80 percent of Lowe's competition comes from smaller and regional chains. With the home improvement industry generating an estimated $400 billion annually, the impact of local competition is significant.

Customer type also influences Lowe's strategy for sales growth. The company wants to appeal to Baby Boomers who are in the process of upgrading their housing by moving or remodeling as well as Gen-Xers who are preparing to purchase their first house. The company continues to upgrade special order options and installation services to accommodate a range of needs and preferences. Additionally, women shoppers have become increasingly important as more and more women become the decision-makers in home improvement projects.

One specific reason for a positive outlook is Lowe's increasing strength in appliances in the wake of Circuit City removing its appliance product line and Montgomery Ward going out of business altogether. With Sears as Lowe's lone remaining national competition, analysts expect the company to increase its share of the appliance market. Of interest will be comparable same-store sales of appliances at Sears and Lowe's locations. Appliances comprise 10 percent of Lowe's sales, representing its largest product line.

CURRENT TRENDS

Lowe's has expanded its square footage consistently and significantly. Between 1998 and 2001, total square footage increased from 47.8 million to 80.7 million, and average store size grew from 92,000 square feet to 121,000 square feet. Continued store expansion over the next several years has been targeted to grow by 10 to 15 percent annually. Traditionally, Lowe's has located in small and medium-sized markets. However, future growth will be focused primarily in major metropolitan areas. New stores will account for the majority of growth. Some store relocations will also continue to take place as smaller, older warehouses are moved into new, larger facilities.

IN-STORE AND ONLINE SPECIAL HELPS

Lowe's offers a variety of free in-store services to its customers. Complimentary computer project design is available to those who need help detailing the plans of a project such as designing a deck or storage building, or redesigning a kitchen. Regularly scheduled How-To clinics teach customers skills in a range of areas from home repair, installation, and remodeling projects to lawn and garden topics. Lowe's also offers computerized color matching. Using a sample of the desired color, Lowe's color-matching software will mix paint to the exact shade. If a local store isn't a convenient destination for information, Lowe's Web site provides extensive HowTo tips on such topics as indoor and outdoor projects, home décor, energy solutions, home safety, moving and relocation. The site also offers tools such as project calculators and buying guides.

Reacting to a change in its customer base, Lowe's began providing services for what it calls "buy-it-yourselfers," those consumers with the money to purchase products but without the time for delivery and installation. Quick to target this new consumer group, Lowe's began offering delivery and installation services as well as providing Web-based tools, also staffing its locations with professionals with home improvement knowledge, skills, and practical experience to provide assistance and guidance to customers. The increase in buy-it-yourselfers has also fueled the growth of Lowe's commercial-based business.

PRODUCTS

Lowe's offers a broad range of home improvement and maintenance products. Major product lines consist of tools, books and videos, home organization, home dÈcor, outdoor living, paints and painting supplies, cleaning supplies, appliances, hardware, lighting and ceiling fans, moving supplies, plumbing, outdoor equipment, electrical supplies, fencing, safety equipment, lawn and garden products, and lumber and building supplies. An average Lowe's warehouse stocks approximately 40,000 items, with hundreds of thousands more available via special order. Excluding special order suppliers, the company contracts for goods from nearly 7,000 vendors, many of whom supply name-brand merchandise. No single vendor claims more than 4 percent of a typical store's total sales. Along with name-brand selection, Lowe's offers an exclusive line of products including Lowe's Top Choice Lumber, Kobalt Tools, and Alexander Julian at Home décor products.

A limited selection of products can be purchased on line at the company's Web site. Purchases are available for pickup at a local Lowe's store or may be delivered. Visitors to the Web site can also find how-to advice and information as well as specialized services for commercial customers. The company offers two Lowe's credit cards, one for individual customers and another for commercial accounts.

CORPORATE CITIZENSHIP

Lowe's is an active member of the communities in which its warehouses are located through support of local programs and volunteer involvement, including the Lowe's Heroes program and Lowe's Charitable and Educational Foundation. The company also provides financial support to such well-known nonprofit organizations as the American Red Cross and United Way.

As a major U.S. supplier of lumber, Lowe's has taken steps to phase out the purchase of lumber from endangered forests as these areas are identified. In 2000, the company placed an immediate ban on lumber purchases from the endangered Great Bear Rainforest of British Columbia. Lowe's is also a founding sponsor of the National Garden, a three-acre area adjacent to the U.S. Botanic Garden Conservatory located in Washington, D.C.

EMPLOYMENT

Lowe's considers its employees as the key to customer satisfaction, which in turn relates directly to the company's success. Committed to diversity and inclusion, Lowe's provides comprehensive, ongoing training that provides its employees with product knowledge, home improvement know-how, and people skills to better serve customers. Lowe's wants its friendly, knowledgeable associates to separate the company from competitors. Newly hired store personnel are provided with a one-on-one mentor as well as group orientation programs.

Employment benefits include competitive pay, performance incentives, stock options, and career development opportunities. Store managers can benefit from a bonus program based on the store's performance. All employees are eligible to participate in the Buy, Own, Save stock program, which provides company stock at a discounted price. After one year, employees are automatically enrolled in an employee stock ownership plan into which the company makes annual contributions of Lowe's stock. A 401(k) employee investment plan is also available.

SOURCES OF INFORMATION

Bibliography

"analysts see lowe's growth." pacific business news, 11 january 2002.

benjamin, jeff. "lowe's builds a solid foundation for profit growth." investment news, 18 february 2002.

grant, tina, and jay p. pederson, eds. international directory of company histories, vol. 21. detroit: st. james press, 1998.

lowe's companies, inc. home page, 2002. available at http://www.lowes.com.

"lowe's ceo tillman tells vendors what it will take to do business with the big box chain in the future." do-it-yourself retailing, march 2002.

"lowe's companies, inc." hoover's company profiles. available at http://www.hoovers.com.

"lowe's concentrates on metro markets." home textiles today, 4 march 2002.

"lowe's fourth-quarter earnings surged 55.1 percent to $218.4 million." chain store age executive fax, 1 march 2002.

"lowe's reports record earnings for fourth quarter and fiscal year." pr newswire, 25 february 2002.

For an annual report:

on the internet at: http://www.lowes.com

For additional industry research:

investigate companies by their standard industrial classification codes, also known as sics. lowe's companies, inc.'s primary sics are:

2431 millwork

3442 metal doors, sash and trim

5031 lumber, plywood and millwork

5039 construction materials, not elsewhere classified

5072 hardware

5211 lumber and other building materials

5251 hardware stores

5261 retail nurseries and garden stores

5722 household appliance stores

also investigate companies by their north american industry classification system codes, also known as naics codes. lowe's companies, inc.'s primary naics codes are:

321918 other millwork (including flooring)

332321 metal window and door manufacturing

421310 lumber, plywood, millwork and wood panel wholesalers

421390 other construction material wholesalers

421710 hardware wholesalers

443111 household appliance stores

444130 hardware stores

444190 other building material dealers

444220 nursery and garden centers