Lowe's - The Story of A Billion Dollar Empire

Описание: In 1921 Lucius Lowe opened a hardware store in the small town of North Wilkesboro, North Carolina. Following his death, his son, James Lowe, took over the business. James Lowe and his brother-in-law, Carl Buchan, served in the U.S. Army during World War II, and during this period Lowe's sister and mother ran the business.

When Buchan was wounded and discharged from the army in 1943, he returned to North Wilkesboro to help operate Lowe's hardware business. In 1946 Buchan took a 50 percent interest in the store. Buchan quickly sold out much of the store's inventory. He then reorganized the store, which became a wholesale-style seller of hardware and building supplies.
When Lowe was discharged from the army, he returned to aid Buchan in operating the business. The two opened a second store and used profits to buy an automobile dealership and a cattle farm. In 1952 Buchan traded his interests in these two businesses for Lowe's interest in their two stores.
Three months later, Buchan opened a third store, in Asheville, North Carolina. Also in 1952 the company was incorporated as Lowe's North Wilkesboro Hardware, Inc. From 1952 to 1959, Buchan expanded operations, and sales increased from $4.1 million to $27 million.

The post-World War II construction boom made the hardware business very profitable. The frenzied demand for supplies meant that sales often were made directly from a freight car on the railway siding that ran by the store. By purchasing stock directly from the manufacturer, Lowe's was able to avoid paying the higher prices set by wholesalers, which meant lower prices for customers. By 1955 Buchan had six stores. The big push to become a major force in the home-building market came in 1960 when Buchan died and an office of the president was created. The company went public in 1961 and was renamed Lowe's Companies, Inc.

Even though the company grew and new locations were added, the layout of the stores remained basically the same: a small retail floor with limited inventory and a lumberyard out back near the railroad tracks. The bulk of Lowe's customers were contractors and construction companies. By the late 1960s, Lowe's had more than 50 stores, and sales figures hovered around the $100 million mark.

About this time, the burgeoning do-it-yourself market was beginning to change the face of the construction industry. The rising cost of buying a home or having one remodeled by a professional led more homeowners to take on construction projects themselves. Home centers were becoming the modern version of the neighborhood hardware store. At the same time, the home building market was experiencing periodic slumps, and Lowe's management began to notice that their sales figures were moving up and down in tandem with housing trends.

In spite of the fluctuations in the housing market, Lowe's revenues rose from $170 million in 1971 to more than $900 million by 1979 (when there were more than 200 stores in the chain). This was due in large part to Lowe's financing program that helped local builders get loans, coordinate building plans with the Federal Housing Administration, help contractors fill out the government forms and trained construction companies to build FHA-approved homes. When new home construction virtually came to a standstill in the later part of the 1970s, Lowe's made the decision to target consumers. The management team believed that increasing consumer sales would reduce the company's vulnerability during economic and seasonal downswings. By the 1980s housing starts to decrease, and Lowe's net income fell 24 percent. While studying the track records of do-it-yourself stores that sold solely to consumers, Lowe's found that these stores were recording strong sales even during the home-building slumps.