“We believed from the beginning that if we brought the customer quality merchandise at the right price and offered excellent service, we might change retailing in america. Today, we are the model of what retailing should be.”
Starting The Company
Within the late 1970s, Bernie Marcus and Arthur Blank were both working at livetheorangelife chain in Los Angeles called Handy Dan when Siegfried S. Sigoloff, known for disposing of senior management in the companies he purchased, bought the struggling Daylin Inc., Handy Dan’s parent company. Since Handy Dan was profitable, Marcus and Blank were certain their jobs were secure. Nevertheless they were wrong. False charges were brought from the two that alleged they had allowed a subordinate to open up a free account and use funds to battle against a union at Handy Dan stores in San Jose.
Before these people were fired, however, Marcus and Blank was working to find profitable methods for discounting at among their Handy Dan locations. They noted that by marking items down, volume rose and costs, as being a portion of sales, dropped. During the time whenever they lost their jobs they had been intending to implement their discovery at other outlets, however they were free to begin creating a nationwide home-centre chain that belongs to them. They planned to build up a store where product selection was great and prices were kept as little as possible, and where trained, knowledgeable, and helpful customer service representatives provided the very best service available.
The venture began in suburban Atlanta with money from the New York investment firm. They stocked the shelves of their first couple of stores with 18,000 different products, anything from paint supplies to specialized tools for repairs, cut prices in terms of they could, and hired and trained staff themselves. On opening day, they gave their kids a stack of $1 bills to hand to customers to say thank you for shopping at the store, but in the end during the day, there was still money left and the kids were outside in the parking lot utilizing the money to attempt to convince individuals to get in and also a look.
Both were dejected and despondent. Marcus remembers that “[his] wife wouldn’t let [him] shave for days. She didn’t want [him] to possess a razor in [his] hands.”
Building an Empire – A few days following the grand opening, a consumer returned using a token of her gratitude – a bag of okra for Marcus – for that positive experience with shopping in the Home Depot. Though he failed to just like the okra, it had been a turning point, and word of mouth marketing started to spread.
Money was still tight (employees stacked empty cardboard boxes and paint cans on the top shelves so the stores appeared more filled with goods compared to they actually were), but as the first two stores were succeeding, Blank and Marcus decided to open two more, this time inside the Miami area. Two more Miami stores followed two months later. On November 22, 1981, the company went public xeibxr investments and profits exploded. The chain expanded and profitability far exceeded expectations. Originally projected at $9 million worth in sales per store, average sales went beyond $17 million. Before 1990, 118 Home Depots were pulling in $2.7 billion in sales.
In under two decades, by 1999, The Home Depot ESS had end up being the world’s largest dealer of redecorating goods. Additionally, it has become a worldwide retailer with stores in Canada and South America and definately will carry on and expand. Blank insists the foundational principles of his company, even though it has expanded so vast, “were cemented in those early years and have never changed. Our prices were low then, and they are generally still low today. And our service was excellent then but still is today.”