Home Depot entering area

December 21, 1990|By Cindy Harper-Evans

Home Depot Inc., one of the largest hardware stores in the nation, has announced it will open its first store in the Baltimore area, which analysts said yesterday will present formidable competition to Landover-based Hechinger Co.

Atlanta-based Home Depot, a 137-store warehouse building-products retailer, said it will open a 130,000-square-foot store in Glen Burnie near a Hechinger store. Another Home Depot will open in White Marsh, but no opening date has been scheduled, the company said.

By the end of 1993, Home Depot expects to have four stores in the Baltimore area. Hechinger has 13 stores in the local market.

"As far as I can see, Home Depot has been successful in every market they have entered and have never stumbled," said Argus Research analyst Cornelius V. Sewell. "It's not that Home Depot has detroyed their competition, but they've made life tough. They tend to capture a fair share of the market -- and some of that will come out of Hechinger's hide."

Hechinger and Home Depot are competitors -- albeit on a much smaller scale -- in South Carolina and Connecticut. Analysts said Home Depot probably will hurt the smaller, neighborhood hardware stores the most.

Hechinger, for its part, said the arrival of Home Depot on the local do-it-yourself home-improvement scene will be no different from the competition in the area with Channel and Builder's Square, which has left Hechinger virtually unscathed.

"We think we know the Baltimore market better than anyone else," said John W. Hechinger Jr., company president and chief executive. "We have a large selection and 13 well-positioned stores" in the area.

Although the Hechinger and Home Depot target markets and product lines overlap significantly, there are differences.

Hechinger, which has 116 stores in 14 states, offers a larger selection than Home Depot. But Home Depot's prices are lower on the average. Hechinger carries more general merchandise; Home Depot is more oriented toward building products.

Things also look different on the balance sheet. In the three months that ended in October, Hechinger earnings fell 9 percent, to $5 million, while Home Depot's jumped 41 percent, to $36 million.

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