Meeting |
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Report |
Meeting |
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Report |
May 1, 2001 |
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| In the late 1980s, Lowe's was the largest seller of
lumber and building materials in the world, but its world was about to change, said CEO Bob
Tillman. The home improvement industry was about to undergo a radical change. In the past 10 years, the 55-year-old company based in the small N.C. mountain town of Wilkesboro has reinvented itself while growing financially stronger and becoming still more profitable. How did the company do it, asked Tillman? One of the main factors, he said, is that Lowe's Companies, Inc. "doesn't have employees. We have owners. That makes a tremendous difference. They know what all this means to them." Lowe's is one of the largest ESOP companies; employees own about 15 percent of the company. Tillman said that that was made possible when company co-founder H. C. Buchan died unexpectedly in 1961 and left his 50 percent stake in the company to be purchased by employees. "A single share of Lowe's stock worth $10 in the 1961 IPO which executed Buchan's wish is now worth 240 shares at $63.30, the latest market price I saw before coming here today," he said. The 38-year company veteran was part of a middle management team the Lowe's chairman put together to craft a new vision for the company in the late 80s. Based on 25,000 intercepts, they found customers liked and trusted the company but—except for lumber—they hated the stores and the product selection. "Everything had to change," he said: the market, the pricing, the vehicle to market and, "most importantly," he acknowledged, "the customer. Lowe's traditionally targeted the new homebuilder. The new customer in the home improvement industry is a woman. In 1990 the company had 295 stores and $2 billion in sales. The goal of the decade became to grow to $20 billion in sales by 2000 (500 stores by $40 million in sales). All stores had to be replaced. New stores had to be built. Pricing strategy changed from high-low to everyday low pricing. "We had to become a low-cost provider and that required building an inclusive logistics network to get product from the manufacturer to the consumer as efficiently as possible," the Mt. Olive native said. "And we think we have the industry's best." How well did it work? Today, Lowe's is the 15th largest retailer in the U.S. and the 34th largest retailer in the world with more than 670 stores in 40 states and 2000 annual sales exceeding $18 billion. Currently in the midst of a $2 billion expansion plan, the company's most aggressive ever, Lowe's is opening more than one store every week. The company is the world's second largest home improvement retailer and the second largest retailer of home appliances. Said the UNC-Wilmington alumnus, Lowe's new superstores are the largest in the industry at approximately 150,000 square feet of retail space. "The garden center in our new stores is twice as large as our entire stores were in the 80s," he said. As an aside, he noted that the Crown Point store in Charlotte, which was the company's prototype "big box," has just been replaced by a behemoth further out Independence Blvd. in Matthews. A Fortune 200 company, Lowe's employs more than 100,000 people and has been listed three times as one of the "100 Best Companies to Work for in America." "And all this was done without losing profitability," Tillman said. "We're one of eight retailers with an A or better credit rating." The former store manager said the home improvement industry is both larger and more fragmented than retailing. "We like it. It's big, basic and growing—one of Maslow's top three: food, clothing and shelter." The industry is growing at twice the rate of retail. In the U.S. home improvement is a $405 billion industry compared to retail at $170 billion and it's not dominated by a few players. In home improvement, the two top players have 15 percent of the market. By contrast, Wal-Mart, K-Mart and Target own 85 percent of their total market. In answer to questions, Tillman said the new office campus to be built near Mooresville is a response to the company's recruiting efforts. There are currently 500 jobs vacant in Wilkesboro. It's difficult to recruit to a rural area. The new campus is also within an hour's drive of headquarters and convenient to Douglas International. Answering another question, Tillman said Lowe's is the nation's third largest real estate developer in the country. Wal-Mart is first. As for empty big boxes that mar the communities from coast to coast, Tillman noted that Wal-Mart has more empty square feet of space in the country than Lowe's has in all its open stores. "And it will get worse because they are replacing every one of their traditional stores with new mega-stores," he said. In a move to extract himself from the music committee, Ed Ellis led the Club in a traditional young YMCA camper song—Little Rabbit Come Inside—complete with "act-along." But members fooled him and handled the challenge with aplomb. They enjoyed themselves so much, Ed's plan probably backfired. President Don caught the spirit with a Ronnie Pruett-like rhyme: "Little Ed go outside, there forever to abide." Byron Bullard introduced technology entrepreneur Cynthia Carlson as the Club's newest member. Susan Hutchins introduced a host of guests, a tribute no doubt to the quality of the speaker. Richard Rankin told a couple of jokes he'd "stolen" from other clubs, one told by Charlotte East's Bill Keenan who just happened to be at the meeting. Even the pig and cow wouldn't sleep in the barn with Herb Harriss. Jeff Triplette gave the invocation. Others at the head table included Bruce Darden, Gayle Smith, John Layne, Ron Kimble and President-Elect Jim Woodward who introduced the speaker. * * * |
New Member
2001 Marketing, Communications Communication Solutions, Inc.6135 Park South Drive, Ste. 510 (28210) 704-945-7125 FAX 704-945-7101 email: vinson@solutionscompanies.com Since 1990, Ron Vinson has operated his own marketing communications firms (CSl/ISI-CommunicationsSolutions Inc./ InteractiveSolutions Int.), serving as president. His firms work with a variety of national accounts, including Shell Oil Company and Genera] Dynamics, as well as representing regional and local firms and organizations. In 2000, he created The Creative Group of Solutions Companies with Research 100 of Prince-ton, NJ, Sportscast Productions of Oklahoma City and The Forbes Group of Washington, DC. Between 1982 and 1990, he was vice president of Communications, Independent Insurance Agents of America. Prior to that he served as vice president of Federal Affairs & Field Operations for the Insurance Information Institute (1974-1982). From 1970 to 1974, he was press secretary, administrative assistant and director of research- for the comptroller general for the state of Georgia. His background includes work as a media consultant, national public relations director, political campaign director, television director/producer and national advertising/marketing executive. His activities have included promoting major sporting events (PGA Tour golf tournaments, Olympic U.S. Trials, etc.), as well as conducting national public relations, broadcast and print advertising campaigns; producing and directing national and local television shows; supervising national product introductions, and designing national marketing research programs. The author of several books and former publisher/editor of major trade publications, Ron also has authored special section reports for News-week, Time, Nation's Business, Inc. and other national magazines. Vinson is a member of the board for Junior Achievement of the Central Carolinas and the Mecklenburg County Council for the Boy Scouts of America. He also serves on the steering committee for the March of Dimes annual Alltel Corporate Cup Challenge. He has served on the board of directors for the National Crime Prevention Institute and for the Public Relations Society of America's Association Section. He is an accredited member of the Public Relations Society of America. A native of Fort Worth, Texas, Ron went to Georgia Institute of Technology. He has been married for 31 years to Ann Vinson. Their only child, Jenn (23) is married and a jewelry designer with her work exhibited nationally. Members of the Presbyterian Church (USA), Ron and Ann have wide-ranging interests and activities. Welcome to Charlotte Rotary, Ron. * * * |
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