Wilkesboro, NC, Aug. 23--In March, Robert Niblock was promoted to the newly created post of president of home improvement retailer Lowe's Companies Inc. Previously, the title belonged to CEO and Chairman Robert Tillman. Last week, the Fortune 100 company announced that second-quarter profits leaped 28 percent from the previous year, beating expectations, according to the Charlotte Observer.
Niblock spoke with The Observer about the Wilkesboro-based company's outlook, his job and his upcoming move to a new Lowe's corporate campus under construction in Mooresville. Questions and answers have been edited for length and clarity.
QUESTION: You credited second-quarter results in part to pent-up demand caused by bad weather in the first quarter that delayed home-improvement projects. Tillman also noted that the boom of mortgage refinancing is slowing down as interest rates rise. So how do you know the favorable second-quarter trends can be sustained?
ANSWER: We're starting to see some signs the economy is picking up. Even with the increases that you've seen in interest rates, they're still low based on historical levels. In addition, you've got continued strength in new home sales and existing home sales. That's one of the factors that correlates with our business. So we feel good about that.
A lot of the refinancings that have taken place over the past six, eight and 12 months have brought a reduction in monthly payments, which almost becomes kind of an annuity for the homeowner, a $200 or $300 lower monthly payment. We believe the majority of those homeowners out there will spend that extra incremental cash flow each month, and we believe we'll wind up with our share.
The other thing we've got is lower tax rates. With those tax rebate checks that just came out, we've started out the third quarter very well.
And then there's this overall change that's gone on the past several years in the American psyche, where they're really focused on their home.
All of those factors lead us to believe that we've got great opportunity for continued success.
Q: You told investors that a program you're rolling out that adds new employees who connect customers with installers for remodelings or new fixtures is showing positive results in both customer satisfaction and sales. Can you talk more about how the program works?
A: Any time someone comes in and rips out your kitchen, it's not going to be pleasant. What we're trying to do is put some additional personnel into stores, as well as giving them some additional tools to better manage that process. We have someone available in the event something goes wrong.
In the past, we've grown this business so fast, we really didn't give our stores the tools and the headcount they needed to make sure we maintained customers' expectations to the level we were satisfied with.
In the test stores, we added two to three positions depending on the volume, and we'll be adding that to the other stores as they roll out. We're doing enough incremental business that it more than justifies the incremental investment.
Your company recently announced it's dropping its three-year sponsorship of "Trading Spaces," the hot show on the TLC cable network. Why didn't you want to continue?
While we did like what we'd seen to date with "Trading Spaces," there were a couple of issues. One is, the cost to renew over the next several years was going to go up substantially (I'm not going to disclose how much). And when we looked at the viewership, while it had grown dramatically, it was starting to plateau a little bit. So we just felt the money was best spent in other places.
Q: When do you plan to move to the new Mooresville facility?
A: My office will move down this fall, I think sometime in October. We'll start moving the first people to the facility around mid-September.
