The Mega Brands That Built America Recap for Hardware Warfare

 

This week’s episode of The Mega Brands that Built America is titled Hardware Warfare and talks about how Lowe’s and Home Depot came to fruition.

Before these stores came to be, people had to go to several wholesalers to get what they needed for projects, but only if they were wholesalers.

 

Carl Buchan and Jim Lowe were working together in the family business…a hardware store. In 1946, Carl wanted to make the store more successful, so he decided to order toilets in bulk so people could have them on demand….by marking them up and selling them off.

Jim is not a happy bunny. However, Carl thinks this is a gamble work taking and promises to sell all 400 toilets. At the time, the housing market is taking off and people need supplies to build what they need for their homes….but where to get the supplies?

Carl’s gamble pays off and he pitches the idea of opening another store, selling everything anyone can possibly need to build a home. Jim reluctantly decides to open another location in Sparta, South Carolina.

The store opens in 1949 and items sell like hotcakes. It is so successful that Carl wants to go national with it and makes plans to open yet another store. However, Jim vetoes the idea and offers Carl the chance to buy him out. The men hug it out and Carl decides to make his dream a reality…and promises to keep the family name.

Carl is the sole owner of Lowe’s by 1952. He opens more stores, but after six years, profits begin slowing down. He is focusing on growing the business and having what people need, but the stores are disorganized, making customers frustrated.

 

Carl hires Bob Strickland to help make the shopping experience more pleasing. He suggests having a whole setup, such as a kitchen, so people can see everything they could possibly need in each department. He uses Sears as a model to make this work.

Sadly, Carl would die at the age of 44 from a heart attack before he could see this dream come true. Bob takes over in Carl’s honor and it is a success! Customers love it, sales skyrocket and people can get anything they need and more for home improvement….even impulse buys.

By 1978, Lowe’s has hundreds of locations throughout the country and is making money.

 

While Lowe’s is succeeding, West Coast hardware workers Bernie Marcus and Arthur Blank are fired by Handy Dan’s. They call Ken Langone, who also worked for the store and pitch their idea of making the stores bigger and allow for people to buy in bulk….in short, being a next level Lowe’s with more products for cheaper products….a Walmart for hardware stores, if you will.

Ken thinks this is a great idea and tells them to go for it. However, the guys need the money to make this dream a reality.

Bernie finds a warehouse in Atlanta and shows it to Pat Farrah in hopes that they can all work together. Inspired by Crazy Eddie’s, he wants to call it Bad Bernie’s Build All, with a prisoner type logo.

No one likes this name, but one of the investors, the lone lady in the group, suggests Home Depot, and the rest is history. With 3.5 million dollars, the guys plan on opening their first store in three months.

 

Lowe’s continues to grow, but the energy crisis takes a toll on business. Bob nixes the idea of going into big cities, which gives Home Depot an edge as they plan their first store opening.

 

Bernie and Arthur are down to the wire, so Pat comes to their rescue to stock shelves, so people have stuff to buy…and even use empty product to give the illusion of fuller shelves. They even add sawdust to the floor to give it a more realistic feel.

 

The first store opens in June 1979 with bright orange signs to make it stand out. However, the first day is a disaster with little to no business…..all because the promised ad in the Atlanta newspaper never ran.

The guys get their wives and kids down to give out dollar bills, but that doesn’t even work. Sales continue to be grim, and they lose one million dollars.

Pat once again comes to the rescue by suggesting they sell fireplace screens. He’d gotten 4,000 after someone cancelled an order and he thinks if they sell them with a small markup, they could be in business.

The guys market the heck out of it and it ends up working in their favor, with people shopping for other things. The company would also have flash sales to boost sales. This leads to two more stores opening by 1980 and hiring experts for each department.

Before long, they open even more stores and going toe to toe with Lowe’s….who send Bob Tillman to talk to Pat…..and find out how they are getting sales. He ends up buying a ceiling fan, thinking that the bigger stores and sales could work in their favor.

 

By 1990, there is a bigger Lowe’s opened in Charlotte, NC. They are back in direct competition with Home Depot….and get a leg up when Sam Walton, the owner of Walmart, calls Bernie to suggest they have everyday low prices, just like he does. Bernie decides to go for it and sales skyrocket and by 1992, they are selling billions more than Lowe’s.

 

Lowe’s decides to put a store everywhere there is a Home Depot, causing an all-out war. Despite being worth billions, Lowe’s still cannot beat Lowe’s. They are worth a combined 500 billion dollars.