So grab your toques, because today the firm announced that it would be looking to expand into Canada, eh. Lowe's plans to operate 10 stores in the Great White North by 2007, with Canadian home-improvement industry veteran Doug Robinson leading the effort.
This is hardly a surprising development in the ongoing battle for the home-improvement dollar, a battle being fought in the U.S. by Lowe's and larger competitor Home Depot
By the end of this year, Home Depot expects to operate 136 stores in Canada. And that firm has emulated its stateside plan of reducing reliance on end consumers by making strategic acquisitions up North. In February, Home Depot purchased Canada's largest commercial lighting distributor, as part of its efforts to expand its business with professional builders. But I have no doubt that there's plenty of money to be made for both companies. After all, I live within a 20-minute drive of at least three of these home-improvement centers, and the way they're packed, we could clearly use another one.
Despite gloom and doom from those who worry that the entire home improvement industry is ready to collapse, along with the country's many housing bubbles, I think these two will weather rough times. As a consumer, I find that Lowe's and Home Depot (for me they're absolutely interchangeable) have replaced the local hardware store, and that kind of ubiquity ought to provide a backstop in case the heady building market takes a tumble. Given that Home Depot has only 12% of the whole marketplace, the two heavyweights have a lot of ground to gain before they start having to starve each other in order to feed themselves.
As for the stocks, I think most investors would be wise to look at this competition -- as others have suggested -- as a Pepsi
For related Foolishness:
- Should you be dumping Home Depot?
- Investors were low about Lowe's.
- My colleague, W.D. Crotty, is not as impressed with big 'n' orange.
Coke is one of lead analyst Philip Durell's Motley Fool Inside Value picks. A free trial gets you all the details about that pick and others.
Seth Jayson has spent more on wallboard than he could ever recoup with home improvement stocks. At the time of publication, he had no positions in any firm mentioned. View his stock holdings and Fool profile here. Fool rules are here.