The Home Depot is the leading home improvement retailer in the nation, with approximately 900 stores in the U.S. and Canada. The Depot's stores conflate cavernous, warehouse-style buildings with friendly and knowledgeable customer associates. The combination has proven irresistible to those with the urge to tinker. Stores average 130,000 square feet and stock about 50,000 different kinds of building and gardening materials, making them a Mecca for weekend do-it-yourselfers as well as for professional contractors and designers. The Depot even offers amateurs "how-to" classes to help them get started.

The Home Depot story

Handy Dan Improvement Center executives Bernard Marcus and Arthur Blank were the victims of a corporate merger in 1978. Out of their jobs, Marcus and Blank teamed up with a former co-worker and opened the first Depot store; in two years Home Depot had four stores in the Atlanta area. By 1982, the company had sales topping $100 million and began to expand westward to Louisiana and Florida. In 1998, the John Deere company decided to manufacture lawn tractors under the Scotts brand name for sale exclusively through Depot stores. The partnership is expected to prove lucrative for all participants.

Stocks aplenty

The Home Depot, especially in its early days, was very generous with its employee stock options plan. As a result, its employee stock incentives have already created 1000-plus millionaires since the company began in 1978. Arthur Blank, the chief executive officer, believes that the company's stock has been "one of the cornerstones of our success." (If you'd invested $1,000 when the company went public in 1981, you'd have been worth around $1.4 million in January 2000.) In January 1999, The Home Depot announced that it would offer an additional venue for investors to purchase Depot stock directly from The Home Depot Web site. Potential investors may visit the financial information section of www.homedepot.com to review online investing services for direct stock transactions.

Growing pains?

After their resolution to double in size by the next millennium, The Home Depot's cofounders realized that they couldn't continue their tradition of visiting every new branch. "Do you realize," announced Arthur Blank, "we'll open stores this year that we'll never see? The tide's running against us." It's an enviable problem to have - yet it is also a significant one. The company, which owes its success to its quality services, wonders if it will be able to maintain similar standards while absorbing 150,000 new employees by the end of 2000. Blank is also worried about management: will The Home Depot be able to cultivate leaders as fervent and dedicated as its first crop?

Aggressive expansion

Analysts think the home improvement industry is growing anywhere from 5 percent to 8 percent a year, and the Home Depot wants to be part of the expansion. CEO Arthur Blank hopes to add 1,000 new stores by 2003. This aggressive expansion will be coupled with continuing advertising - Home Depot ranks fourth among the top advertised brands. The company is also hoping to carve a new niche for itself thanks to Expo, a chain of glitzy interior design and remodelling stores - it hopes to open 200 of the all-under-one-roof home decoration stores by 2005. Home Depot is also testing a chain of outlets called Villager's Hardware that looks suspiciously like the smaller mom-and-pop stores that the company helped push out of business. In 2000 the company will also launch its Web initiative, which it hopes will be the "world's largest e-commerce site in [the] industry."

Home Depot International

Home Depot has coupled its aggressive domestic expansion with an equally aggressive expansion internationally. The company recently opened its 50th store in Canada and hopes to double that number by 2002. Home Depot also has plans to open eight stores in Argentina and add four more stores to its four existing stores in Chile by 2001. The company also operates a highly successful store in San Juan, Puerto Rico.

Social (ir)responsibility?

In 1998 a collection of stock funds that advocate social responsibility asked The Home Depot to prove its progress in hiring and promoting minorities and women. One of the Depot's lawyers, Larry Smith, wasn't pleased with this particular shareholder rights movement. "It's a road map that leads right to the courthouse," he said. "We've already been there and don't want to look back." Indeed, In 1997, Home Depot paid $104 million (or 20% of its total quarterly profits) to settle a class-action discrimination suit involving 25,000 current and former employees.

Start your engines

In 1999, The Home Depot announced that it would sponsor the National Association For Stock Car Auto Racing (NASCAR), and in particular, the #20 Joe Gibbs Pontiac. The Depot launched its multi-million dollar integrated marketing campaign in January. "This is one of the biggest 'themed' sports marketing campaigns in The Home Depot's 20-year history," said Carol Schumacher, vice president of public relations for the Depot.

Ladies, take note