Unusual weather conditions created challenges for the entire home improvement industry in the first half of this year, and Lowe’s is counting on President and CEO Marvin Ellison to restore power to this Power Player. Truth be told, The Home Depot has been better able to cope with the sluggish environment than Lowe’s. Ellison, who left The Home Depot to head J.C. Penney before heading to Lowe’s a year ago, has plans for streamlining Lowe’s in a process he calls “a transformation, not a turnaround.”
His first decisions involved “low-hanging fruit” such as removing slow-moving merchandise from the shelves, identifying “non-core” businesses to exit and closing underperforming stores, like the 99 Orchard Supply Hardware units acquired in 2013. Fifty other stores in Canada and the United States have also been shuttered, and the 13 units in Mexico are to be sold or closed. Other non-core operations shed include contract business Alacrity Renovation Services and the home security app Iris Smart Home.
When last fiscal year’s numbers were nonetheless disappointing, Ellison said most of the work done “has been in preparation for an improved spring and fiscal 2019.” And, he added, “Although we have remaining work to do, we are pleased with the results we are seeing in early spring categories, which is evidence that we are focused on the right actions at this time of our transformation.”
Perhaps Ellison’s biggest challenge is ratcheting up Lowe’s sales to contractors, builders and other professional customers, an area where The Home Depot has dominated the market. One of the first changes Lowe’s made was to provide parking spaces near the front of the store where professional customers can more easily load lumber and other bulky building supplies. The company also improved inventory for professionals by stocking more job lot quantities and has been promoting itself as a source of Craftsman power tools.