BY BOB MIODONSKI of CONTRACTOR’s staff
MESQUITE, TEXAS — Utilizing the expertise of its recent wholesaler acquisitions, The Home Depot opened its first Home Depot Supply store here Feb. 28.
"We are allowing our experts from Apex Supply and Your ‘other’ Warehouse to guide us, to help us merchandise not only at Home Depot Supply but at our retail stores as well," said Ellen Dracos, Home Depot’s marketing director. "Both were great acquisitions; both are terrific companies."
Industry observers wondered what exactly Home Depot had in mind when it acquired Atlanta-based Apex Supply in December 1999 and Baton Rouge, La.-based Your "other" Warehouse last fall. Some thought that Home Depot would go on a buying spree of other supply houses, while others believed that the retailer would learn what it could from the distribution companies and open its own stores. In either case, the target customer is the professional contractor.
"We see the professional customer as a business partner," Dracos told CONTRACTOR. "We are both in the same industry; we’re both trying to see the industry go forward. Partnering makes a lot of sense.
"We’re convenient for them with so many locations; we can save them time and money and make their lives easier."
While the Mesquite store east of Dallas is the first Home Depot Supply, others will follow, Dracos said. Other locations were not being disclosed in mid-February.
In California and Arizona, Home Depot already has two Pro Stores that cater to the needs of professional contractors. In late November 2001, Home Depot announced that it would open four more Pro Stores in 2002.
The company hasn’t decided whether to rename the Pro Stores as Home Depot Supply, Dracos said.
"Home Depot Supply is an evolution of those two Pro Stores on the West Coast," she said. "We’re learning as we go, listening to customers and getting clearer ideas as to what they want."
Dracos described the Home Depot Supply stores as contractor-only stores. Calling them a hybrid of a retail store and a supply house, she said the Home Depot Supply stores would have a look different from the home centers with dedicated desks for paint, plumbing, electrical and building materials "with experts behind every desk."
Asked if the general public also could shop in the stores, she replied: "Homeowners will know the minute they walk in that this store is not for them. The layout, desks and signs will be different. We will focus on a high level of services — delivery, will call, account managers. This is a different concept for us."
In its announcement last November, Home Depot said by the end of 2002 that 966 of its retail stores would offer its "pro initiative," which offers services for smaller professional contractors. Home Depot Supply and the Pro Stores, on the other hand, would focus more resources on reaching larger commercial and industrial customers.
"Under the business umbrella of HD Supply, the company will leverage Home Depot account managers and the outside sales staff of its fast-growing Maintenance Warehouse subsidiary to offer professional customers a wide array of products and services offered through Home Depot, Maintenance Warehouse, Apex Supply and other related businesses," according to the statement. "In addition, Home Depot Pro Stores will offer professional customers product assortments and service typically associated with wholesale supply houses."
That Home Depot Supply has set its sights on competing with traditional supply houses appeared clear from its presence in early February at the International Builders’ Show in Atlanta. Home Depot Supply signs were prominent at the Home Depot booth on the trade show floor as were banners hung around the Georgia World Congress Center convention hall.
The banners proclaimed, "Your supply house should work as hard as you do" and "Work hard at the job site. Not at the supply house."
A Texas wholesaler with a location in the Dallas area said in late February that he had heard very little about the opening of Home Depot Supply. He noted that business in Dallas already is very competitive, so he wasn’t particularly concerned about the new entry in the market.
"Let the better man win," said the wholesaler, who asked not to be identified. "But that’s the way it’s always been."