Amore demure orange box: Home Depot tests new ‘design center’ concept
For Home Depot, October marks the launch of a very different kind of orange box—the Home Depot Design Center, a female-friendly concept store with two test locations on opposite coasts.
Just two months after Home Depot sold its professional division, HD Supply, the Design Center turns 180 degrees to set focus squarely on consumers of home decor, furnishings and small home improvement items. There is no noisy lumberyard and no sky-high steel display structures. Instead, the stores in Charlotte, N.C., and Concord, Calif., offer a wider selection of home storage items, lower ceilings, a more demure color scheme and a home furnishings “store-within-a-store.”
Jason Feldman, senior director of merchandising for Home Depot, called the project a “hybrid” of decor items and a convenience hardware business.
“These two locations just happen to be very good markets in the orange box,” Feldman said. “The customer feedback we’ve received is that customers would like to spend more time and more money in those project categories,” such as home decor and storage.
One of the stores’ most prominent new features is the furnishings store-within-a-store, featuring items from the catalog business Home Decorators Collection.
Home Depot acquired the Home Decorators Collection catalog in April 2006, and now the furnishings catalog operates as part of Home Depot Direct. Parts of that purchase were the high-end decor catalogs 10 Crescent Lane and Paces Trading Company, which Home Depot folded later that year. The Home Decorators Collection store-within-a-store at the Charlotte and Concord locations will offer the mid-range furnishings stock sold by the catalog.
“The store really will appeal to women and to couples, of any persuasian—that’s the purchase demographic,” Feldman said.
Integrating the catalog business is not the only major change. Although the Design Center primarily is consumer-focused, it will feature certain building materials, notably in a revamped and beautified door and window display area.
“In terms of decor projects on doors and windows—projects around the exterior of the house—they tend to be merchandised in a more functional way,” Feldman explained. “We looked at ways to make doors and windows more attractive. It’s something very different when you look at these stores now and how they display doors and windows—with better lighting and a more comprehensive selection.”
One goal of the windows and doors area, he said, is to have contractors and architects drive their clients into the showroom.
“We are opening up a trade office in these stores,” Feldman added. “The trade office will serve interior designers and architects and builders. The store will serve as a showroom for their customer, [but] the main reason a pro would come into the store is because their customer wanted something from the store. As a location, [pros will] stick to the orange box.”
Further additions include more high-end storage items—think wicker baskets and closet organization systems—and a gardening center with a more comprehensive selection of items.
Home Depot has been playing around with several different store concepts of late, including Yardbirds, a 10-unit chain that the retailer purchased in 2006. Like the Design Center concept, the Yardbirds stores don’t carry lumber. But unlike the Design Centers, which are about the same size as a regular Home Depot store at 90,000 square feet, the Yardbirds stores are approximately 40,000 square feet.
“It’s still orange (on the outside). But unlike the warehouse stores, it’s more of a specialty-shopping environment. The color palette is sort of evolved,” Feldman said.
And if the Design Center stores sound a lot like Home Depot’s 35-location Expo Design Center format, that’s because there are similarities in the female-friendly, showroom-style atmosphere.
But the Home Depot Design Center features mid- to low-priced items alongside high-end items, where the Expo Design Center exclusively features high-end items. Another notable difference is that customers shouldn’t expect to see the Home Depot Design Center flooding the marketplace any time soon—instead, the company intends to try out the various new furnishings, storage, door and window displays and integrate them in regular Home Depot stores if they’re working, Feldman said.
“What these stores really will give us is the opportunity to test out concepts,” he said, “and then leverage back what works into our core 2,000 stores.”
Third-quarter earnings up at 3M
St. Paul, Minn.-based 3M had record third-quarter sales and earnings, with earnings growth of 7.4 percent to $960 million compared with $894 million in the same period last year.
The company had net sales of $6.2 billion, up 5.8 percent from $5.86 billion last year.
George Buckley, 3M’s president, chairman and CEO, said the company saw gains across all its business segments. In consumer and office products, 3M saw sales grow 5.9 percent to $898 million compared with $848 million in the same period last year. The company’s safety and security products business saw sales rise 10.9 percent to $766 million from $691 million last year.
“The strength of the 3M portfolio was evident in the third quarter as we again generated record sales,” Buckley said. “Geographic diversity was also an important factor. We continue to accelerate investment in research and development, sales and marketing and in simplification of our supply chains.”
3M has business offices globally, with operations in other industries including industrial and transportation; health care; display and graphics; and electronics and communications.
Weyerhaeuser to shutter three iLevel plants
Federal Way, Wash.-based Weyerhaeuser will “indefinitely curtail” operations at three iLevel building products plants because of “slow customer demand.”
The curtailments include an oriented strand board (OSB) plant in Drayton Valley, Alberta; an OSB plant in Wawa, Ontario; and a laminated strand lumber plant in Deerwood, Minn. Work will halt at the plants before the end of the year, the company said.
“The decline in North American housing starts has reduced demand for wood products, requiring us to rationalize our supply of OSB and engineered wood,” said Steven Rogel, chairman, president and CEO of Weyerhaeuser. “We remain committed to these markets. This move enables our remaining plants to better execute our customer strategies.”
The Wawa and Drayton Valley plants are two of nine OSB mills in the Weyerhaeuser system. Wawa has an annual production capacity of 470 million square feet of OSB, while Drayton Valley has a capacity of 415 million square feet annually, the company said.
The Deerwood plant can produce six million cubic feet per year of engineered strand lumber and is one of three such plants owned by Weyerhaeuser.