Atlanta, GA, June 23--One look at the new Home Depot in Lincoln Park in Chicago and you can see right away it's different, according to the Atlanta Journal-Constitution.
The mostly glass exterior, escalator and the second level make it fairly obvious that this isn't your typical orange box. Inside, the 80,000 square-foot store looks more like the two-story Target on Peachtree Road in Buckhead than the 140,323-square-foot warehouse-style Home Depot on Sidney Marcus Boulevard.
The Lincoln Park store sits across the street from new condominiums and rehabilitated homes, and it carries a limited supply of lumber. But local professional customers tend to shop at larger Home Depot locations nearby, said Ellen Highbaugh, manager of the Lincoln Park store.
"It's not as intimidating, and because contractors aren't here, we don't have the mess," she said. "It's brighter."
Home Depot says its small-store prototype, exemplified at Lincoln Park, gives it an advantage over competitors as it seeks locations in areas such as New York City, where land is scarce and space is tight. The smaller stores afford it more flexibility where its typical boxes won't fit, the company said.
Lowe's, Home Depot's top competitor, also has a smaller-format store that allows it flexibility, especially in smaller single-store markets, spokeswoman Chris Ahearn said. The stores are 94,000 square feet, or about 20 percent smaller than a typical Lowe's location.
The Wilkesboro, N.C.-based retailer has smaller stores in Elkin, N.C., and Dickson, Tenn., and plans to open 20 to 25 this year, Ahearn said.
Home Depot is scouting Manhattan for several sites for urban-format stores. The company said it has had informal discussions about opening an urban-format store in Atlanta but currently has no plans to build one.
However, as demand continues to increase in its hometown, Home Depot said the need exists for more stores in the metro area and within the city limits.
Although Home Depot owns 82 percent of its 1,582 stores, it likely would lease space for its stores in Manhattan.
The disappearance of mom-and-pop hardware stores has left a void in Manhattan, said Mark Lipton, a management professor at New School University in New York City and author of "Guiding Growth: How Vision Keeps Companies on Track."
"There is a demand for a smaller, service-based hardware concept (in Manhattan)," he said. "It's not a bad move."
Home Depot has urban-format stores in Brooklyn and on Staten Island in New York City.
The origin of smaller Home Depot stores can be traced to its failed Villager's Hardware concept.
In 1999, Home Depot launched Villager's Hardware in New Jersey as a neighborhood chain fashioned after local hardware stores. Bob Nardelli, chairman, chief executive and president, scrapped the idea two years later, and the four Villager's Hardware locations were converted to Home Depots.
Home Depot killed Villager's Hardware at the same time it introduced the urban format because it saw no need to have two small-store chains operating under different names.
The new Home Depot in Chicago's Lincoln Park was built on a site of a former shoe store.
Operating stores in urban areas requires modification of Home Depot's typical lineup of products and services, said Mike Roy, vice president of operations of its Midwest division.
"This is all new for us, so it's a learning environment," he said.
