Las Vegas Business Press : Big-business lessons from the Christmas-tree lot

Big-business lessons from the Christmas-tree lot

by Ian Mylchreest

If your dad is like mine, he had to choose between General Motors and Ford. And every time he came home with a new station wagon it was a GM car.

That kind of commitment no longer exists in most business spaces these days. One place where it's going to take hold in Las Vegas, though, might be in the fight between Home Depot and Lowe's.

Anyone who uses the Beltway knows that whole stretches of the city are divided between those two home-improvement companies. Every freeway exit now seems to have one or the other dominating the landscape.

Before there were only the Big Three auto makers in Detroit, there were a host of others like Nash-Kelvinator, Studebaker and Packard. Before there was your father's Oldsmobile, Ransome Olds actually made his own cars.

They've all gone the way of buggy whips. So too have the independent (or even chain) hardware stores been subsumed by the really big-box "home improvement" warehouses.

When I last moved, I found that there was a Home Depot about 200 yards away, as the crow flies, from my house. Lowe's hadn't even paved the parking lot in the strip mall where the company planned to build its box, so naturally I got in the habit of doing it myself at Home Depot.

(Full disclosure: I am not the best example of a home improver. If I wanted to improve my home, I'd have bought a fixer-upper.)

Even if you've bought a house that's in good shape, though, there are always those things that need to be trimmed, cleaned and weeded. That's not to mention the "running repairs" like stopping faucets from leaking and replacing those feature lights that are 18 or 20 feet from the floor. They look so good in the model homes and they show really well when if you're buying a used home but, dude, they are a real beast when you have to change the light bulb.

Most frustrating of all, of course, is the toilet that won't stop running. It can really kill a good Saturday afternoon trying to figure out whether the flapper has perished or the lever is bent out of shape or the chain is tangled.

So, all in all, Home Depot can be the scene of weekends lost trying to fix malfunctioning plumbing or failed horticulture. It's a pain to keep the house in good repair, so forget about raising it to some mystical state of improvement.

With that mindset, I greeted the abrupt exit of Home Depot CEO Robert Nardelli with real schadenfreude. How the mighty rich are fallen!

First, the board actually paid attention to some disgruntled shareholders who thought the top man was not earning his many millions of dollars. Then it hung him out to dry over the holidays. The board called a special meeting to consider his position, but all the while it was trying to arrange one of those exits where Nardelli would be leaving "to pursue other interests" and they'd file the details of the severance package with the Securities & Exchange Commission a few months later.

But Nardelli dug in and refused to even concede that he might want to spend more time with his family. So there was nothing left for the board to do but throw him out with a very heavily gilded parachute.

Of course, troubles of flat earnings and a sagging stock price had been brewing for quite some time. It wasn't that they didn't try some new ideas. A while back the company tried to make its stores more female-friendly. Many women, it discovered, take this home improvement do-it-yourself thing seriously. It is they who allocate the vast majority of home-wimprovement dollars.

Then Home Depot's corporate suite discovered the "contractor" market. Builders became the focus of Home Depot's strategy to boost sales. But that didn't get much traction either.

Despite all the company's woes, I still have faith in Home Depot. Good service is necessary and great service will bring back sales.

Here's how I know: My family is very fussy about Christmas trees. They've told me so in no uncertain terms when I've arrived home with sad and misshapen trees.

This year, I took my daughters so they could help. We'd manage to get there around 6.30 p.m. on a Sunday night. It was windy and dark on the tree lot. That too was my fault.

My children's teenage cynicism was immediately dissolved, though by the middle-aged fairy godmother of a clerk who was selling the Christmas trees.

Suzie immediately drew us in by showing us a very sorry-looking, short, round tree that had been topped from a much larger tree. She managed to entrance my children and chase away my usual bah-humbuggery about hauling a big tree in my car with her patter about the "Charlie Brown" tree. And, at the same time, she managed to find a perfect tree of the size the girls insisted we need.

You probably had to be there but it was real fun to get the tree. If Home Depot could get that kind of service across the chain, Nardelli would be the ghost of Christmas 2006.

imylchreest@lvbusinesspress.com | 702-871-6780 x319

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