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February 2007 - Strategy Magazine
Biz

Word from the Corner Office
Home Depot: Ongoing reno
In Word from the Corner Office, Home Depot's Annette Verschuren talks about building on a good foundation

by Karen Mazurkewich
page 66

When Annette Verschuren first landed in Canada as the newly minted president of Home Depot Canada in 1996, her first stop was the chain's south Brampton, Ont. location. For four hours, she camped at the store's entrance. To her surprise the customer base was rather homogenous.

"There wasn't a woman who came through that door," she recalls.

What a difference a decade makes. When Verschuren, former president and co-owner of the arts and crafts retailer Michael's of Canada, took the reins, Home Depot served 19 locations. Today, the Atlanta-based company, which rang up $5.5 billion worth of sales in Canada last year, is running neck-and-neck with Canadian Tire and Rona as this country's leader in home renovation. The reason: Verschuren added 158 stores, and embraced the company's new mantra to diversify its product categories. The chain that once targeted the weekend warrior now boasts a hefty female clientele thanks to an eclectic mix of plants, lighting and furniture.

But Verschuren is not resting on her laurels. In addition to managing change in Canada, she was appointed Home Depot's head of Asian operations, after the company announced in December that it would buy Home Way, a chain of 12

big-box stores in large Chinese cities including Tianjin, Beijing and Zhengzhou.

Verschuren's juggling act is going to be a tough one. In addition to growing business in China - one of the fastest-growing economies where she will spend 25% of her time - she must continue to innovate on her home turf.

While Home Depot has secured the top spot here, its rivals continue to up the ante. Canada is more competitive than the U.S., says Verschuren. In the U.S., the company's nearest rival is Lowe's with Menards a distant third.

Now, its U.S. archrival is poised to open a store in Hamilton - the company's debut in the Canadian market. Lowe's has confirmed it will also open branches in Brantford, Ont., south Brampton, Ont. and Toronto, as well as nine other locations across the country, according to Doug Robinson, president of Lowe's Canada.

Lowe's has long been a thorn in the side for Home Depot in the U.S. With its bright, clean stores that have long catered to women, the 1,325-outlet chain was once dubbed "Wall Street's home-improvement darling" because for years it led the industry in total sales gains, on a percentage basis.

But while Lowe's imminent arrival has garnered much press, Home Depot Canada must still keep its eye on its closest competitors here - Quebec-based Rona, which saw over $5.6 billion in sales for 2005 among its network of 640 stores and dealer-owner operations, and Canadian Tire which pegs sales for the retail portion of its company at $6.9 billion.

These companies are all in aggressive expansion mode. Rona recently acquired Mountain Building Centers in British Columbia, recruited 23 new dealers in 2006, and recently opened two big box stores, a Reno-Depot in Rimouski, Que. and a Rona L'Entrepôt in Charlemagne, Que.

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