Chicago, IL, Sept. 4--Chicago's sprawling suburbs, growing number of new homes and seemingly endless supply of older properties have made the area ripe for home improvement retailers, according to the Chicago Tribune.
Now Lowe's, the nation's No. 2 home improvement chain, will join industry giant Home Depot and scrappy Menards in a battle for Chicago's renovation dollars.
Those three retailers "are going to fight it out, but I don't know who is going to win," said Bob Creeden, president and chief executive officer of Creeden & Associates, a Glenview-based manufacturer's rep.
Lowe's has operated in Illinois since 1979 and currently has 16 stores, but the North Carolina retailer has stayed out of the highly competitive Chicago area until this year. Its first store opened in St. Charles in June and a Lincolnwood store is expected to follow later this year. Stores in Naperville, Carol Stream and Lake in the Hills are scheduled to open next year.
Lowe's won't disclose how many stores it plans to open in the area or if it plans on opening any city outlets.
Lowe's Chicago entry is reminiscent of the 1990s, when the area supported several big-box home improvement chains. Menards, of Eau Claire, WI, and Atlanta-based Home Depot emerged triumphant in a battle with Builders Square and Schaumburg-based Handy Andy Home Improvement Centers Inc.; both succumbed to Chapter 11 bankruptcy in the late 1990s.
Still, analysts believe the area is ripe for a new wave of stores. "Chicago historically has been a hardware center," Creeden said.
Home Depot won't wait on the sidelines as its closest competitor creeps into a market it has been in for nearly a decade.
The home improvement chain, which is nearly twice the size of Lowe's in both sales and number of stores, opened six stores in Chicago this year with four more scheduled to open before the end of the year in Chicago, Countryside, Elk Grove Village and Carol Stream. Home Depot has nearly 50 stores in the area, including a new urban format in Lincoln Park.
"We see continued expansion in Chicago," said Bill Patterson, president of Home Depot's central division. "We'll probably add more stores than Lowe's will have in Chicago."
On paper, it's easy to pick a winner. Home Depot trumps Lowe's in nearly every measurable category. But investors aren't dismissing Lowe's ability to perform. Lowe's shares are trading more than 50 percent above Home Depot's price.
Lowe's cautious entry into the Chicago area is similar to its nationwide strategy. Lowe's originally favored small to mid-sized markets, but now wants to infiltrate major metro areas. More than half of Lowe's 130 new stores opening this year will be in markets that have a population of at least 500,000.
Besides Illinois, Lowe's is taking the battle to Home Depot by opening stores in traditional Home Depot strongholds such as New York, Florida and California.
"We're growing our square footage by approximately 18 percent to 20 percent each year," said Chris Ahearn, spokeswoman for Lowe's. "We feel like we have lots of room for expansion."
Still, Lowe's officials said they aren't in a race to the top.
"We are focused on our customers, not our competitors," Ahearn said. "Our goal is to be No. 1 with our customers and to be the best in every market we operate in."
