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Home Depot

Cover Story


William Harris, senior vice-president, corporate development

William E. Harris takes seriously Home Depot Inc.'s mantra about staying close to the market. For years, Harris, the retailer's senior vice-president for corporate development and its chief real estate executive, visited every plot of land the company bought. And with Home Depot planning to increase its outlets by 25% a year, that meant quite a bit of racing around. But by 1998, the Atlanta company aims to have opened a total of 800 stores, including 460 new ones--in Canada, Mexico, and the U.S.--so Harris, 60, has decided to break with tradition and skip a few site visits. "I physically can't do it any more," he says.

Physically, perhaps not. But electronically and telephonically, Harris still stays on top in executing Home Depot's expansion of its home-improvement and garden-supply network. The chain faces the same problems as an army in a war of conquest: seizing the right territory, maintaining supply lines, controlling occupied terrain, and planning offensives.

Home Depot assaults new fronts in distinct waves. The first wave, Harris says, "plants the flag"--putting three or four stores on the perimeter of a designated city. Each store typically serves 100,000 households, which have median incomes of $45,000. And 75% of those households are owner-occupied. Once the initial stores reach combined sales of about $50 million, Harris' second wave fills in the territory with new outlets designed to make Home Depot dominant over three to five years.

The campaign doesn't stop there. When sales surpass Home Depot's average of $400 per square foot, or when growth lags behind the inflation

rate, Harris figures that a store is getting too crowded: Home Depot will close a thriving store and open two smaller ones to improve the shopping experience for customers, a tactic Harris calls "cannibalizing."

As long as demand for its wares keeps growing, Harris doesn't worry about overbuilding. Instead, he used to fret that he wouldn't find enough real estate veterans to manage Home Depot's growth, but the property debacle of recent years has glutted the employment market with realty pros. "We're finding lots of people with trench warfare experience," he says. And Home Depot is making sure they're armed with the customer data they need to map a winning campaign.By David Greising in Atlanta

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