Home improvement appears to be less a retail sector and more a movement. Consider this: When the ABC program Home Improvement debuted in 1991, The Home Depot's annual sales were about $3.8 billion and the company employed 21,500. When the show ended in 1999, the chain (the #1 do-it-yourself -- DIY -- store operator in the US) had annual sales of about $38.4 billion with 201,000 on the payroll. Estimates nail home improvement sales at $197 billion in 2003.
Home improvement is the weekend hobby of millions of enthusiasts around the world. Weekend DIY-ing is so popular that The E. W. Scripps Company devotes two cable networks to things you can do from a toolbox: Home & Garden Television and the Do It Yourself Network. Such networks are the perfect advertising medium for toolmakers such as The Stanley Works, Danaher Corporation (which makes Sears' Craftsman line), and The Black & Decker Corporation.
Eighty-five percent of the nation's homes were built prior to 1980 and will need frequent maintenance, meaning the industry can expect to bulk up even more. Some experts have projected that US home improvement sales will reach $265 billion by 2008. Big-box chains such as Home Depot and Lowe's Companies (the #2 home improvement chain in the US), which combined control more than 30% of the US market, continue to open stores in the US and abroad. Home Depot has Canadian and Mexican operations, while Lowe's has been moving into major US cities in pursuit of Home Depot.
Elsewhere around the globe, the companies that run some of the industry's biggest players are intensifying their focus on their home improvement businesses. Kingfisher plc, for instance, which owns #1 UK home improvement chain B&Q and French DIY leader Castorama, has divested itself of drugstores, (Superdrug), variety stores (Woolworths), and its electricals business (spun off as Kesa) to concentrate more on home-improvement retailing.
Companies have also been expanding into other countries with fresher markets. Home ownership was once forbidden in communist China, but that policy has been reversed in recent years, giving birth to a billion potential DIY-ers. Since flooring, appliances, and fixtures do not come standard in new homes, the typical new home in China is a DIY chain's dream. Encouraged by the success of its 14 B&Q stores in China, Kingfisher has plans for 70 more within five years. German franchiser Obi (owned by Tengelmann Warenhandelsgesellschaft) also operates four stores in China. And Home Depot, which already has an indirect interest in the nation through its links with the Homeway chain, is opening a business-development office there. More foreign chains are eager to locate in China. As of December 2004 China is allowing them to open stores anywhere in the country.
To continue growth beyond their national borders, companies in the home improvement industry will need to enter new markets, such as Asia and Eastern Europe, with the right tools and blueprints for the job. Big industry players will have to decide whether to acquire established stores and native inventory or build their own units and try to adapt their offerings to local demand.
