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I Told You So!

January 27, 2009

If it is true that there is nothing so dependable as change, I suppose I shouldn’t have been surprised at Home Depot’s announcement to close their Expo Design Centers. On Monday, January 26 Home Depot issued a press release in which they stated they intend to eliminate 7,000 jobs mostly by closing their 34 Expo Centers. They are also closing their Yardbird Stores that specialized in plants and garden supplies, and their two Design Center stores. Costs savings will come from the elimination of sales jobs and jobs in the support and distribution centers.

If you are not familiar with the Expo concept, it was a high-end version of a traditional Home Depot. Instead of being set up as warehouses with shelves and shelves of home improvement products, they displayed almost everything in vignettes. They also sold more expensive products and claimed "second to none" customer service, including the ability to custom order.  Many of our best outdoor manufacturers saw this model as being very different from the traditional Home Depot model. In fact, even those who vowed never to sell into a big box thought the Expo Design Center concept was different enough to justify their selling o them.
 
As a specialty retailer, that irked me. I didn’t think our customers saw enough distinction between a regular Home Depot and a Expo Design Center to justify a mainstream, high-end manufacturer selling to them.  Even though there wasn’t a Expo in my trade area, as a matter of principal, I didn’t want to carry merchandise from a manufacturer that partnered with Home Depot, no matter what the incarnation. I don’t think I ever got my point across to any manufacturer. After all, when Home Depot wags that big ole purchase order in front of a vendor, fireworks explode and the “reason” part of the brain seems to disconnect from the “greed” part.

Well, many years later, it seems I was right . . . sort of. The downturn in the economy is forcing Home Depot to go back to its core business; warehouse pricing on medium DIY home improvement products.  I just wish I were right because Home Depot couldn’t handle special orders or give the kind of customer service our customers demand and deserve. Then I could say, “I told you so” a do a sort of victory dance. But, if the economy is so wounded that Home Depot’s customers can’t or won’t buy their more expensive goods, what does that say about our ability to do business with the same customer? I suppose I have to hold the victory dance.

One of three things is going to happen: One: Expo customers will bring their business to specialty stores in their area. Two, Expo customers will decide to buy less expensive goods and go to the warehouse clubs or discount big boxes in their area. Or, three, they will just not buy anything until the economy shows signs of improvement. I hope, as I am sure you do, that they choose the first option!

Yours in confused retailing, Bruce