Two major U.S. retailers are about to square off
in a fight for the home decor and redesign dollars of affluent baby
On the east side of the Dallas North Tollway sits a huge Expo
Design Center by The Home Depot Inc., stocked to sell everything
from whole kitchens and bathrooms to picture frames and desk lamps.
On the west side of the road, another warehouse-size store, The
Great Indoors, owned by Sears, Roebuck & Co., opened this month,
selling a range of items to decorate and update the home.
This Dallas-based face-off is about to be repeated in Chicago
and other cities as Home Depot and Sears battle for a piece of the
$140 billion home-remodeling industry.
The rivalry may have actually begun last year, when Sears, an
icon of American industry that grew out of a watch company in the
1880s, was bumped out of the prestigious Dow Jones Industrial
Average of 30 bellwether stocks and was replaced by Home Depot.
Sears, the nation's No. 2 retailer, vows to build 150 Great
Indoors stores within eight years, while Home Depot says it will
open 200 Expo Design Centers in the next five years.
"I've been in the Dallas (Expo Design) store, and I think it's
an exciting store,'' said Sid Doolittle, a retail consultant in
Chicago whose firm, McMillan/Doolittle, has worked for both Sears
and Home Depot. "But I think for a number of reasons Sears will be
a formidable challenger.''
Sears, the nation's leading appliance retailer, benefits from
its vast offerings, a huge network of home-repair and remodeling
contractors and a strong credit-card operation, Doolittle said.
While Doolittle concedes that "Sears has stumbled a lot on
their off-the-mall businesses'' the former Montgomery Ward
executive believes this latest gambit is "closer to Sears' core
business. They have a better shot at making this a strong
Founded in 1978, Home Depot has grown into the nation's largest
home-improvement chain, with 1,000 stores and $38.4 billion in
annual sales. Its success has been the subject of business school
case studies and fawning books.
The Atlanta-based company opened its first Expo Design Center a
decade ago in San Diego and now has 17 stores, including three in
the Dallas-Fort Worth area and two in Houston. Mostly around 90,000
square feet -- although the Dallas location is 146,000 -- the centers
cater to upscale homeowners who want to remodel kitchens, bathrooms
and other spaces.
While traditional Home Depots are aimed at the
do-it-yourself-er, Expos are geared at the buy-it-yourself-er --
many shoppers are accompanied by designers or contractors who help
them select tubs, appliances, countertops and cabinets.
Although the Expo and Great Indoors stores are similar, they are
not identical. Expo features more mock-ups of bathrooms and
kitchens. The Great Indoors has more appliances, including
Analysts said Expo might attract homeowners intent on remodeling
an entire room, while Great Indoors could draw shoppers looking to
update their appliances or add small decor touchups.
"Home Depot is going after a more-affluent consumer and
special-order business. Sears has approached it more on the softer
side of home decor,'' said Wayne Hood, an analyst who covers both
companies for Prudential Securities. "Sears saw Expo and felt that
was a segment of the market they could attack.''
The 144,000-square-foot Dallas store is Sears' third Great
Indoors. The first opened in 1998 in Denver, followed by one in
"I think it's a good-looking store,'' said Jeffrey Edelman, an
analyst with PaineWebber, who has visited the Denver outlet. "The
couple that they have up and running are doing well, and the sector
is going to grow.''
The Great Indoors targets a younger and more affluent shopper
than Sears. Tim White, marketing director for The Great Indoors,
said the concept was heavily test-marketed among married women with
family incomes above $50,000.
White said the Denver store is posting double-digit gains over
last year, with appliances and plumbing selling particularly well.
Home Depot officials declined to give individual store sales
Edelman, however, doubts that even a successful Great Indoors
will do much for Sears' bottom line -- the Hoffman Estates,
Ill.-based retailer has annual sales approaching $30 billion. And,
he said, it'll be hard for Sears to meet its goal of opening 150
Great Indoors in the next eight years.
Expo Design has tinkered with its format over the years and
could adjust more in response to Sears' entry into the home-design
"We were the pioneer of the concept,'' said Home Depot
spokeswoman Melissa Watkins. "We know what we're good at, and
we're going to stick with that.''