(Source: Wall Street Journal)
U.S. home foreclosures have a mixed impact on sales at Home Depot Inc. and Lowe’s Cos., the top executives at both home-improvement retailers recently said.
New data, released last week, indicate the pace of foreclosures has stepped up considerably.
Lowe’s loses sales as homes slip closer to foreclosure, Chief Executive Robert Niblock said Wednesday at an investor conference. Spending on repairs and improvements “basically ceases,” he said.
“It’s not uncommon for that home to be neglected or have fixtures taken out” throughout the foreclosure process, so in many cases, work must be done to ready the house for a sale later, Mr. Niblock said.
The retailers’ commercial businesses are more likely to get the benefit from that work, usually in such areas as paint or lighting, as contractors are usually hired by lenders to prep a house for sale. “We’re trying to make sure we garner our share of that business,” Mr. Niblock said.
Home Depot said also it is aggressively going after sales connected to getting houses ready for resale.
“When houses are sold out of foreclosure, that is a great opportunity for Home Depot,” Chief Executive Frank Blake said Thursday during the company’s shareholder meeting.
But once a foreclosed house is sold, Mr. Niblock said, home-improvement product sales are similar to any other house changing ownership in the market.
Read Mary Ellen Lloyd’s full article “Retailers Feel Mixed Impact From Foreclosures” in the Wall Street Journal (May 1, 2009).