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From July 2008
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Preferences and loyalties are being tested
this year as home improvement retailers slog
through another summer of depressed activity in
the housing market. Home Depot and Lowe’s have
made moves to retrench a bit: Home Depot is
closing 15 underperforming stores and reducing
the number of new-store openings by more than
half, while Lowe’s has postponed openings for 20
stores — primarily in Florida and California,
where housing woes are particularly acute.
Analysts suggest there’s a light at the end of
the tunnel, but hedge their bets about the
timing.
Still, a couple of non-Power Players are showing
that the entire home improvement segment hasn’t
fallen into disrepair. Menards is a Top 100
retailer that is employing a novel strategy in
its site selection process by buying plenty of
land around new stores. The Eau Claire, Wis.,
company puts in utilities and engages local home
builders to develop the real estate with the
understanding that materials will be purchased
from Menards. In Yorkville, Ill., for example,
Menards purchased enough real estate for more
than 160 single-family homes and 69 townhouse
condominiums. Once these units are occupied,
Menards has a ready-made core group of consumers
in the immediate vicinity.
Lumber Liquidators has carved out a specialty
niche in this segment by selling flooring at
deep discounts, whether it’s 80 cents per square
foot for down-scale laminate or 10 times as much
for tropical hardwoods. The 130-store retailer,
headquartered in Toano, Va., generated just over
$400 million in sales last year and plans to
open stores at a rate of 30 to 40 annually until
it reaches a minimum of 300 locations and its
stated goal of becoming a billion-dollar
company.

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