Home Depot sees e-commerce as path to growth
According to a new Wall Street Journal report, Home Depot is focusing its efforts these days on the expansion of its e-commerce business, which means no new store openings for the time being.
"The retail model forever was to increase sales through opening additional units, but as you added stores to a finite group of households, each store becomes less profitable," Home Depot CEO Frank Blake told the Journal. "So the decision was made to stop opening additional boxes."
What that means for the retailer is the proliferation of online distribution centers, which will stock over 17 times the inventory of an average brick-and-mortar store.
However, as Blake noted in the interview, this presents logistical challenges for its bulky, heavy inventory. The company hopes the e-commerce component will pick up steam among contractors as well as consumers, who may prefer to have heavy appliances shipped to them instead.
Home Depot was opening as many as 200 stores per year prior to the recession.
Over lead paint, Lowe’s settles for $500,000
According to the U.S. Environmental Protection Agency and the Department of Justice, Lowe’s has agreed to settle its lead paint case for $500,000 and to implement a new compliance program at all 1,700+ locations nationwide.
The settlement is a response to an EPA investigation that found that Lowe’s lacked the documentation to prove it had abided by the agency’s regulations when hiring contractors in nine states or using EPA-approved lead paint testing kits. The EPA was originally tipped off by comments and complaints from the public.
“Today’s settlement sends a clear message to all contractors and the firms they hire: Get lead certified and comply with the law to protect children from exposure to dangerous lead dust,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Lowe’s is taking responsibility for the actions of the firms it hires, and EPA expects other contractors to do the same.”
The new compliance program would help ensure that the contractors Lowe’s hires are trained to minimize lead dust during home improvement projects.
The $500,000 penalty is also the largest ever when it comes to violations of the federal Lead Renovation, Repair and Painting (RRP) Rule, according to the EPA.
Lowe’s is hardly the only company to experience grief over lead paint as of late: Sherwin-Williams, as well as ConAgra Grocery Products and NL Industries, must pay $1.1 billion to 10 California cities and counties as part of a lead removal program involving millions of old homes. According to the judge involved in the decision, the companies knowingly sold paint containing harmful ingredients.
Reform of the EPA’s lead paint rules are one of the legislative priorities of the National Lumber and Building Material Dealers’ Association, which supports efforts to make the rules more reasonable and less onerous for remodelers, contractors and homeowners.
Scotts Miracle-Gro replaces CFO
Marysville, Ohio-based Scotts Miracle-Gro Company named Randy Coleman as executive VP and CFO.
Coleman replaces Larry Hilsheimer, who has left the company after slighlty more than a year in his role.
Chairman and CEO Jim Hagedorn described Coleman as a better fit for the position.
"Larry brought good insights to the organization and we appreciate his contributions," Hagedorn said. "But as we have refined our strategic plan over the past year, our needs have changed, which is why we recognized that Randy is a better fit for our new direction. We wish Larry continued success going forward."
The announcement explained that Hilsheimer left the Company immediately and is pursuing other opportunities.
Coleman, 45, was most recently senior VP of operating finance as well as enterprise performance analytics. He joined ScottsMiracle-Gro in 1999. He started as assistant controller of the Ortho business unit. He later acted as director of financial planning and analysis and held several finance leadership roles.
"As we look to capture the opportunities in front of us, the board and I recognized that Randy’s deep understanding of our industry, our retail environment and the overall competitive landscape made him the right person for this role," said Hagedorn. "I have worked with Randy for more that a decade and consider him one of our very best leaders. He is an exceptional finance executive who has great instincts and a bias for action. He has the support of the entire management team because we know his engaged approach to managing the business fits well with our culture and our constant drive to improve."
The appointment of Coleman was not a reflection of any concerns related to the company’s financial controls or business performance, Hagedorn said. The company will report its fiscal second quarter results after market on Monday, May 5.