Orchard sharpens its model

Evidence of a rich retailing heritage is on display at the checkout.

There’s a change in leadership at Orchard Supply Hardware, but not in strategy.

The San Jose, California-based hardware store chain, a standalone business unit of Mooresville, North Carolina-based Lowe’s, last month named Bob Tellier as its president. Tellier’s out to prove that there is a place in the market between the big box and the convenience-oriented neighborhood hardware store.

“We’re sitting right in the middle,” Tellier told HBSDealer. “We’re still not the big-project guy, but we have the footprint to make the hardware store more of a shopping experience.”

One of the major themes in the company’s “neighborhood store” format is the concept of “affordable upscale,” he says. Around the aisles and checkout lanes of the new stores, one sees shades of Smith & Hawken or Frontgate.com.

At the end of 2014, 38% of the company’s store base had the new “neighborhood” format, which was introduced about three years ago. And by the end of 2015, it’s expected that 65% of the stores will be upgraded.

Orchard’s growth goal is to reach 100 stores and $1 billion in sales by the end of 2017.

Around the new store format, there are numerous examples of attention to detail — from the hands-on Tool Box power tool department to the retro candy and retro soda at the front of the store.

“It’s about being relevant, and maybe even a little quirky,” Tellier said.

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