No. 1 chain expanding in the area

Home Depot plans to double presence in the next 3 years

`Terribly vibrant market'

Strategy seen as way to stem competition in regional market

Home improvement retailer

April 28, 2000|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

In an attempt to take advantage of a "terribly vibrant market" and to stem competition, Home Depot Inc. said yesterday that it will nearly double its stores in the Baltimore-Washington area in the next three years, including opening eight stores before September.

The nation's largest home improvement retailer, based in Atlanta, has 31 stores in the area.

A new store will open in Hagerstown next month, in Ellicott City in June and in Columbia near the end of the summer. The rest of the eight stores will be in Prince George's County, in Virginia and in York, Pa. The stores will range in size from 105,000 square feet to 115,000 square feet.

The local expansion is part of Home Depot's strategy to grow from 967 stores in 45 states, Canada, Puerto Rico and Chile, to 1,900 stores by 2003.

The Baltimore-Washington area is a "terribly vibrant market," said John Simley, a Home Depot spokesman. "There's a tremendous demand for home improvement products and services."

The strategy behind the expansion is to create "critical mass," reduce unit costs and capture more of the available market, said Kurt Barnard, president of Barnard's Retail Trend Report in New Jersey.

"Now is a good time for Home Depot," Barnard said. "For the foreseeable future, home-related merchandise will command top consumer dollar. Creating critical mass makes it very difficult for anyone to move in and be a thorn in their side."

Industry analysts said competition from Home Depot -- with fiscal 1999 sales of $38.4 billion -- played a key role in the recent bankruptcy and subsequent closing of the 88-year-old Hechinger Co., a regional operator based in Largo that had consistently lost market share to national chains.

To further shore up its role as industry leader, Home Depot has made several recent moves, such as opening some stores 24 hours a day, including 11 stores in the Baltimore-Washington area, and selling major household appliances among its wares. The 24-hour format is "really meant to allow customers to shop for us on their own terms," said Simley.

"One group of customers want us to stay open later, typically people whose work schedules make late shopping more convenient," he said. "Another group -- typically professional builders and contractors who need to stock up for the day -- wants us to open earlier."

The chain will also begin selling major appliances such as dishwashers, washing machines and dryers in all stores by December.

Lowe's Cos. Inc., the nation's second-largest home improvement retailer, sells appliances in addition to the more typical array of home repair and remodeling products.

Lowe's opened its first superstore in metropolitan Baltimore in March 1999. It has 11 stores in the Baltimore-Washington area among its total of 589 stores in 39 states.

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