Wine Making
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Home Depots Fix - Is It Really In One?
   
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New York City : Off -The- Record: Part 1
THE BEST OF 'THE BEST'
1. The best bar, the best bathroom, the best bus line, the best block party, the best back-crack, the best Brooklyn hipster haircuts, the best .....
THE BEST OF 'THE BEST'
1. The best bar, the best bathroom, the best bus line, the best block party, the best back-crack, the best Brooklyn hipster haircuts, the best .....
The last time I was in a Home Depot store I saw no empty aisles.
There were plenty of shoppers lingering around. Oh sure the
clerks are busy and no one's jumping from checkout counter to
checkout counter throwing flowers and singing, but I didn't see
any problems. So what's the beef?
Lowes. That's the real issue. Analysts and investors alike are
holding Home Depot up to Lowes, comparing the two as if they
were fine bottles of wine, holding the glass up to the light
inspecting its amber glow, sniffing those corks as if that's
gonna tell you anything. They should take that same view when
comparing HD to LOW. These stores may be in the same business
but they're not that alike.
Lets look at the facts, store against store and talk dollars not
lightly lit isles. Lowes inventory is higher in major
appliances. While to some that may seem a good strategy and yes,
the isles are wider at Lowes. Its true too that Home Depot's
stores look more like a warehouse. That's because they are!
These are retailers, LOW and HD, and they should be judged like
retailers judge themselves; floor space and turn over. HD
carries more inventory per square foot of store space than LOW.
HD carries less of the bulky, slow turning appliances than LOW.
They've also got a whole lot more in buying power with 1,500
stores than LOW and that means lower costs in volume purchases.
If it came down to a price war it would be bloody, but Home
Depot's clearly got the upper hand.
Chief Executive Robert Nardelli who arrived from General
Electric two years ago, was already under intense pressure from
investors. Home Depot's stock had fallen 53 percent in 2002,
making it the worst performer among components of the Dow Jones
industrial average.
Nardelli, some analysts say, has focused too much on cost
cutting at the expense of a critical element of retailing -- the
customer. Moreover, they say, stores have a poor layout,
merchandise that appeals too much to the traditional male
do-it-yourselfer rather than women who make many of the spending
decisions, and a sales staff whose strong suit is not customer
service.
While analysts and institutional investors have been critical of
Nardelli and HD, as the no. 2 retailer in America behind
Wal-Mart, Nardelli's got has hands full. With a business that
large centralized purchasing, which was one of the changes
Nardelli made, makes sense and offers greater control over
capital expenditures. While women do make many of the decisions
in spending, adjusting the entire home improvement chain's focus
to attract more women shoppers would take years and time is
something Nardelli doesn't have.
While Home Depot has made some moves towards improving customer
service, announcing greater staff training and its expansion
into the latest bathroom fixtures and rugs. Many analysts are
too quick to judge these shifts in business tactics. HD's move
into bathroom fixtures and rugs is aimed right at " Mrs. I want
a better looking home." Its not men who have concern over
bathrooms, except that the toilet will flush properly and few
mean really care about the rugs that go in them.
But Mr. Nardelli's not Home Depot. Nardelli's assembled a small
army of key management while quietly managing to combine new
thinking with the old. His tactic is not a new one but it's a
task few would undertake if given that opportunity.
Axcess Business News believes the market pundits and
institutional investors are too quick to judge this company's
future and added Home Depot's stock to its Stock Guide's "best
picks column" the last week of Dec 2002 with a "very positive"
view towards the stock. Axcess Business News is holding that
view in an even stronger light in lieu of its share's recent
downturn this Friday.
The company blamed weaker-than-expected sales of hardware and
power tools over the holidays for its latest troubles, as the
stock fell 14 percent to its lowest level in nearly five years
on Friday, a day after it warned that fiscal 2002 earnings would
fall short of earlier estimates and that sales at stores open at
least a year could drop as much as 10 percent in the fourth
quarter.
Home Depot is not alone in lower retail sales for the 4th
quarter. The entire retail sector lagged through the Christmas
season with few exceptions, like JC Penny's (NYSE: JCP), which
had also been one of the companies Axcess Business News had
selected for its "best picks column", ahead of Bear Stearns'
recent applaud by nearly two months. Axcess Business News
dropped coverage of JCP last week as Stearn's released its views
as stated above, supporting the "best picks column's" 18th week
of advancing market picks successfully.
This reporter is for Home Depot, as is Axcess Business News. I
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expect the market to rise in its favor in the coming period asSouth Africa is a relatively large country. Its is five times the size of Britain, twice as big as France and about one eighth the .....
Nardelli's "fix-it team" quietly moves forward with its repairs.
Axcess Business News will continue to report on the fix of the
home improvement industry and these companies activities for our
readers. Watch your in-box for any news alerts on this and other
late breaking business news. If your not a member, consider
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Go to http://www.theaxcess.net and subscribe now! Its free!!
About the author:
Alan writes a daily column for Axcess Business News called
Market Axcess. And he'd really like it if you click on that link
and tell his editor how much you like his work so he gets a
raise! (just kidding) I would like it if you visited the site,
http://www.theaxcess.net Help yourself to some common sense and
read my column now!