Boston, MA, May 16, 2006--The Boston Globe released its Globe National rankings yesterday with Home Depot landing the number one spot on a new list.
The new list, added this year, The Globe National 25, which ranks the top-performing national companies with big operations here the same way The Globe 100 does locally based businesses.
Close on Home Depot's heels at number two is another giant in home improvement supply, Lowe's Cos.
The Globe National 25 represents an effort to expand the 18-year-old Globe 100 to capture a broader swath of the state's economic landscape.
As longtime Massachusetts corporate icons like Digital Equipment Corp., Gillette Co., and FleetBoston Financial Corp., have come under out-of-state ownership, big nationwide companies in everything from retailing to telecommunications have expanded substantially here. Of the top 100 employers in the state, both corporate and nonprofit, more than one-third are based elsewhere.
Among publicly traded companies in that group of 100 that make their headquarters outside the state, Home Depot, based in Atlanta, had the best results in 2005, determined by its increase in sales and profit margin and its return to shareholders. Home Depot's net income jumped 16 percent last year to $5.8 billion. Sales nationally increased 11.5 percent to $81.5 billion, and same-store sales--results in locations that were open for all of 2004 as well--increased an average of 3.8 percent.
Lowe's, of Mooresville, N.C., also posted solid numbers, increasing sales 18.6 percent and net earnings 27.3 percent, while same-store sales increased 6.1 percent.
The two big-box retailers have tapped into a deep well of business. For the vast majority of consumers, their homes represent their biggest asset. Do-it-yourself home repairs and improvements remain popular. But Home Depot is also increasing its own service business, dubbed ''do it for me," and growing sales to professional contractors.
''The growth is on the professional and supply side," said Yancey Casey, a Home Depot spokesman. ''The do-it-yourself category is expected to mature in five to 10 years."
Still, Home Depot sees enormous growth potential ahead. Across all markets, Americans spend $970 billion a year on home repairs and improvements. Home Depot gets less than 10 percent of that.
The do-it-for-me business grew 21.4 percent last year, with much of the growth coming from the installation of items like countertops and gutters as well as bigger-ticket projects like kitchens and air-conditioning systems. To complement its service business, Home Depot late last year acquired Chem-Dry, the world's largest carpet- and upholstery-cleaning franchise.
Home Depot's supply business, targeted at builders and repair companies, accounted for 5 percent of sales in 2005 but was growing at a triple-digit pace.
In Massachusetts, Home Depot operates 48 facilities, including three distribution centers, and employs just under 9,000 people. Lowe's operates 15 stores here and employs 2,615.
Both companies are still expanding locally. Home Depot is adding three stores this year, in Chelsea, Hadley, and Wakefield. Lowe's is adding two, in Framingham and Saugus. Nationally, Home Depot operates 2,061 facilities and Lowe's 1,250.
Despite the state's reputation for high costs and zoning hassles for big-box store construction, Casey and Lowe's spokeswoman Chris Ahearn said they like the Bay State market and have had few problems hiring employees and growing business.
But both Home Depot and Lowe's have been tripped up by a quirk of Massachusetts business rules, a so-called item pricing regulation that requires retailers to mark prices on every individual item in their stores. In 2002, Home Depot paid $3.8 million to settle a lawsuit filed against it. Lowe's settled for $750,000 last year.
