2013: Lowe’s changes lack direction
Posted in the Lowes Companies Forum
#1 Jan 7, 2013
NEW YORK (MarketWatch)— The series of merchandising, management, store and other changes made by the nation’s second-largest home-improvement retailer appear to “lack direction,” an analyst said on Monday.
Among her top concerns, the analyst said the company’s merchandising initiatives appear “misguided.” For instance, its move to consolidate units and reinvest space in top-selling products and more localized assortment may have “angered and confused” vendors.
Meanwhile, a new management structure announced in May to focus on customer experience and operations has led to both its head merchant and head of supply chain positions still remaining vacant after previous leaders were reassigned to other jobs, she said.
“We find it puzzling that the company would choose to reposition high-ranking members of the merchandising and supply teams in the midst of a critical operational restructuring,” Champine said.
On the store front, the company’s trying to differentiate itself by showcasing specific brands and innovative products in areas such as endcaps, or displays at the end of an aisle, but that move has also proven “unimpressive,” the analyst said.
Another move to use endcaps to showcase clearance items may also prove to be “counterproductive” to the company’s goal to increase average transaction size, she added.
Online, while the company’s ecommerce sales have increased 60% in the third-quarter, they represent only about 1% of Lowe’s total sales, she said, adding that percentage doesn’t justify its plan to spend about $500 million in annual capital spending on that front.
“We don’t believe the home-improvement categories are well suited to the online channel,” she said.“Lowe’s plans include spending virtually all e-commerce revenue on capital expenditures for the channel.”
Meanwhile, Lowe’s can’t count on increasing its U.S. store footprint for growth, the analyst said. Lowe’s square footage is expected to increase less than 1% annually the next five years, compared to an average of 6% in her specialty retail coverage universe.
Internationally, while there may be a long-term opportunity as Lowe’s expands in markets such as Canada after a failed bid for Canadian rival Rona last year, the analyst said its international ambitions may prove to be another distraction at the moment.
Lowe’s “can’t afford to lose focus on the structural overhaul in the core U.S. market,” she said.
#2 Jan 7, 2013
In a related story...
Canaccord Bearish on Lowe’s; Downgraded to “Sell”(LOW)
Canaccord Genuity Downgrades Lowe's (LOW) to Sell; Changes Lack Direction
#3 Jan 7, 2013
Nothing a couple “feel good” corporate posts on connections won’t solve. Can I hear an “all in” Mr. Niblicker?
Seriously, Lowe’s focus is too wide, cluttered, and stores have been forced to move farther and farther away from the basic idea of selling inventory at the store level.
Capitol investments made today will be felt for years to come, and now Wall Street is questioning those investments.
#4 Jan 7, 2013
Don't forget, it will be the employee's fault at the store level for not enthusiastically embracing the programs and not implementing them properly.
#5 Jan 7, 2013
That's ok with me because I jump sinking ships just like all my other fellow coworkers will. Ones at corporate are phucked because not that many jobs out there for ya unless you wanna travel......a lot!
Since: Dec 12
#6 Jan 7, 2013
Stay a hardware store and die slowly.
#7 Jan 7, 2013
Lowe's tumbles on downgrade
Some of the No. 2 home improvement chain's efforts to revamp inventory and reshuffle management are "misguided," and "counterproductive," Canaccord Genuity noted in downgrading it to sell, from hold.
Read More At IBD: http://news.investors.com/010713-639674-lowes...
#8 Feb 19, 2013
Maybe we can get Robert Niblock to post something on connections,then all the store managers can agree with everything he says and tell him what a good job hes doing.lowes changes direction every 6 months,LEF is a joke and they call themselves the ENTERPRISE,see you losers in the SEA OF SAMENESS
#9 Feb 19, 2013
I'm sure after they drop millions in Vegas on another Party, and tell each other how great LEF is working that will solve everything. Wall Street and the consumer are not fooled that easily. They have lost sight of their core business of selling home improvement products.
The whole focus is to sell My Lowes, Credit Cards, and PSE Leads. By the time the customer gets to the checkout they have been approached so many times they are irritated. So then we have the cashier hit them one last time with this scripted crap before they exit.
I hear customers complain daily they are tired of being asked for My Lowes and Credit in every aisle. Unfortunately, if we csa's don't bug the customers on every aisle we risk being written up and losing our jobs!
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