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Home Improvement Industry Profile
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.

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 shows are the perfect advertising medium for toolmakers such as The Stanley Works, Danaher Corporation (which makes the Craftsman line), and The Black & Decker Corporation.

In the US alone the home improvement industry generated about $190 billion in 2001. Banking on the fact that 85% of the nation's homes were built prior to 1980 and will need frequent maintenance, some experts have projected US home improvement sales will reach $200 billion by 2004. 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, Mexican, and South American 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-Dubois Investissements, has divested itself of drugstores (Superdrug) and variety stores (Woolworths).

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 eight B&Q stores in China, Kingfisher has plans for 60 B&Q stores in that country by 2007. German franchiser Obi (owned by Tengelmann Warenhandelsgesellschaft) also operates four stores in China, and more companies are eager to locate there.

The Japanese market has received the attention of foreign DIY chains as well. Despite a crowded market in Japan (nearly 4,000 home improvement centers and 2,000 hardware stores), Ace Hardware has directed some of its attention away from competing against TruServ in the US and devised a plan to become the first foreign DIY operator in that island nation.

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.

Top Home Improvement Retail Operators by Sales
1. The Home Depot, Inc. (HD)
2. Lowe's Companies, Inc. (LOW)
3. Castorama-Dubois Investissements
4. Kingfisher plc
5. Menard, Inc.
6. TruServ Corporation
7. Tengelmann Warenhandelsgesellschaft KG
8. Ace Hardware Corporation
9. Do it Best Corp.
10. Praktiker Bau- und Heimwerkermärkte AG
Key People
Tim Allen - Actor who portrayed Tim Taylor, host of the fictional home improvement program Tool Time on the ABC comedy Home Improvement during its run from 1991 to 1999; it was one of American television's most popular prime-time programs mid-decade.
Arthur Blank and Bernard Marcus - Founded The Home Depot, the US's largest DIY chain, in 1978 after being fired from Handy Dan Home Improvement Centers. They joined Handy Dan co-worker Ronald Brill to launch a "new and improved" home center for the DIY-er. Each took turns serving as CEO before both retired (Blank as co-chairman, followed by Marcus as chairman) in 2001.
Alonzo G. Decker Jr. - The son of Black & Decker co-founder Alonzo G. Decker Sr., the junior Decker joined the tool manufacturing firm at age 14 and was laid off during the Great Depression. His unemployment was temporary. He was named president of the firm in 1960, CEO in 1964, and chairman of the board in 1968. He relinquished those positions during the 1970s, but continued to serve as a director until his retirement in 2001.
Richard Hesse - Helped form Ace Hardware by pooling his hardware buying and promotional costs with that of fellow Chicago-area hardware dealers Gern Lindquist, William Stauber, and Oscar Fisher in 1924. Hesse became president the following year and by 1949 Ace Hardware had 133 dealers in seven states. In 1968 it opened its first international store in Guam. Hesse stepped down in 1973.
John Madden - Works as Ace Hardware's spokesman, a National Football League Commentator, and is a former head coach of the NFL's Oakland Raiders.
Bob Vila - Created the do-it-yourself television show and launched a national movement. He is also the spokesman for Sears, Roebuck and Co. and Craftsman Tools (made by Danaher).
DoItYourselfers Glossary of Popular Construction Terms
Glossary of Home Improvement Terms
Associations & Organizations
American Hardware Manufacturers Association
International Housewares Association
National Retail Hardware Association
Paint and Decorating Retailers Association
Worldwide Do-It-Yourself Council
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