Lowe's, Home Depot a contrast in styles

SNELLVILLE, Ga. -- Home Depot built itself into a retail giant with the style of scuffed and steel-toed workboots, its warehouse-style stores so big the lights sometimes don't reach into the shadowy corners of its vast aisles, with their handwritten signs and often dusty floors.

Lowe's has a different style, and you can see the contrast in Snellville, where its store right across from Home Depot is more brightly lit, its white and blue signs more cheerful and its floors spotless.

Lowe's overall prospects are looking brighter, too, these days than those of Home Depot, which recently reported its first quarterly drop in sales.

Home Depot, dominant in the home-improvement industry for more than a decade, is still twice as big as Lowe's. But its top executives are acknowledging what some industry analysts see as a need for some changes and a renewed emphasis on service.

"What worked when you were smaller doesn't necessarily work when you're bigger," said analyst Mark Mandel of Blaylock & Partners in New York. "If you don't reinvest in your business and reinvent yourself, this is what happens."

Home Depot and Lowe's once shared a contractor-oriented look. Then Lowe's took a different course in 1994, when it started opening 115,000-square-foot stores that included home decor and appealed to women as well as men. The approach, less intimidating to people who are not experienced do-it-yourselfers, has helped it to thrive in recent years despite a weak economy.

In Snellville, 25 miles east of Atlanta, 62-year-old Don Lunday was getting help at Lowe's with remodeling a bathroom in his home in Lilburn, Ga. A marketing director, he said he likes the service.

"Until recently I preferred Home Depot, but I'm not so sure anymore," he said. "At Lowe's, it seems that people are more knowledgeable and can talk to me."

Across the street in the Home Depot, 50-year-old Beverly Seal acknowledged she sometimes has had to look around for a while to find an employee to help her. But she said she found a better deal on a dishwasher.

"Price is most important," she said. "I'll hunt somebody down if I need help."

Lowe's, based in Wilkesboro, N.C., this week reported a 46 percent increase in its fourth-quarter earnings over those of last year. It also offered an upbeat profit outlook, projecting that earnings for the year will beat analysts' forecasts.

Founded in 1946, Lowe's has 854 stores. It had $26.5 billion in revenue and tallied up 460 million customer transactions last year.

Founded in 1978, Home Depot has 1,502 stores. It had $58.25 billion in revenue last year and 1 billion customer transactions.

Based in Atlanta, it reported its profit slipped 3.4 percent in the fourth quarter as sales dropped for the first time ever. It also said the sales outlook for this year is not promising.

Rumors of Cape Depot

It's a rivalry that may be coming to Cape Girardeau. Of course, Cape Girardeau already has a Lowe's Home Improvement Store in the western part of town. But rumors have been swirling for some time about a Home Depot coming to town.

While Home Depot is staying mum on the matter, some have said that the company is looking for a suitable site to build here.

Nancy Aversa of Victory Capital Management in Cleveland, which owns 5.6 million Home Depot shares, said the shopping experience at Home Depot and Lowe's is completely different, but that's not necessarily a bad thing.

"Home Depot has always been less pretty, but that's by design," Aversa said. "The pro customer is pretty important to them. Even as we see them make changes to their stores, I don't think they will ever look like Lowe's. That's not who they are or who they want to be."

Home Depot's chief financial officer, Carol Tome, said part of the reason it has slumped lately is because the company is working to transform itself. It is launching a $250 million store remodeling plan this year, plans to hire 40,000 more employees and is increasing training for workers to improve customer service.

Tome said Home Depot is committed to giving better point-of-purchase information -- details about how to use a product. The signs around the store also will be easier to read and provide more details.

'We had to be better'

Lowe's executives see their success as the product of years of effort and forethought.

"We knew back in 1989, when we were trying to lay the vision and framework for future growth, that we couldn't just open another big box like Home Depot," said Marshall Croom, Lowe's treasurer and vice president of finance. "We knew we had to be better and different to give a person a reason to take a left turn into Lowe's rather than a right turn into Home Depot."

Business editor Scott Moyers contributed to this report.