Living The American Dream: Interview With Home Depot Co-Founder Ken Langone

Watch billionaire financier and Home Depot CEO Ken Langone share his rag to riches story.

Home Depot, World's Largest Home Improvement Retailer is Not Improving in China

Image from MSNBC News

Homed Depot had announced that it will close all remaining 7 big box stores in China and will cut 850 jobs. The company will continue to retain two recently opened specialty stores, a paint and flooring store and a home decorations shop in Tianjin. It will also continue to employ 170 store associates. The company says that it will focus more in Chinese market to online shopping.

What happened?

Sometime in December 2006, Home Depot entered China and acquired a local 12-store home improvement retail chain, the Home Way. At that time, the Chinese economy was great and business opportunity was seemed endless.

In recent years, China's economy has slowing down. Retailers are facing pressure in China, where the slowest growth in three years. Retail sales growth in August rose just more than 13% from a year earlier, slower than a 17% climb in August last year. Well, that is an excusable reason. I think that every business, both local and abroad is experiencing some tough economic challenges.

Image from PRNewswire.com

One more reason is that China is a "do-it-for-me" market and not a "do-it-yourself." Home Depot's approach to home improvement is the Do-it-Yourself concept. It works well in the US, but not necessarily overseas. This is one of the main struggles of Home Depot prior to acquiring the Home Way in 2006 and even more evident after the first 4 years of its operation.

With China's thriving cheap labor, why would I do it, if I can pay others for me? Most Chinese prefer apartment-based living which leaves a scarce demand for products such as lumber, and other building materials. I think that Home Depot has failed to translate the "do-it-yourself" ethos in a totally foreign culture.

Sometimes, when you take a business concept abroad, it just doesn't match up with local culture.

Now that Home Depot has created a void in home improvement market niche in China, I am sure another business will fill the gap: Why IKEA Took China By Storm, While Home Depot Failed Miserably

Top 10 Retailers With The Most Sales Worldwide

The Home Depot, the largest home improvement retailer in the United States,
ahead of rival Lowe's, and the fourth largest general retailer in the world
ranks #8 from the Deloitte report.

Deloitte has recently published a new report on Top 250 Global Retailers with the most sales worldwide. The first top 10 retailers which include 5 retail giants from the US, 3 from Germany, 1 from France, and 1 from the UK alone accounted for 29.4 percent of the all sales.

Download and take a look on this report here in PDF format.

NRF honors Burberry as the 2012 International Retailer of the Year

DSE: World's Largest International Tradeshow for Digital Signage

Looking for a world-class digital signage experience for retail? There is no more innovative, and interactive signage show than the Digital Signage Expo. The video above was a recap of last year's event. You may visit the DSE website to get a better feel of what I am referring to.

For next year's event, DSE will be held at the las Vegas Convention Center on March 6-9 2012. To give you an idea for DSE 2012, sponsors of this event will include some of the best names in the industry such as Intel, AMD, Dynasign, BroadSign, Wireless Ronin Technologies, among others.

If you are an exhibitor, digital signage innovator, digital content provider, retail owner, or a visual merchandising executive, and interested in attending DSE 2012, you may request information about how you can attend the next year's expo. Contact Form here.



About DSE
The world's largest international trade show and conference dedicated to digital signage, interactive technology, and Out-of-Home networks. Digital Signage Expo was launched in 2004 and quickly became the #1 event serving the fast-growing digital signage industry, drawing impressive attendance from a wide variety of industry segments, including consumer brands and advertising agencies.

ExpoNation, LLC.
1405 Old Alabama Rd Suite 120
Roswell, GA 30076
Phone: 770-649-0300
Fax: 770-518-0022

Martha Stewart Hires Blackstone Group for her Comeback

In a statement released today, famous business magnate Martha Stewart, also the founder of Martha Stewart Living Omnimedia (MSLO) will rejoin the board of directors of the company in June 6 of this year. Shares of Martha Stewart Living shot up 32% following the news.


Martha Stewart, the company’s largest shareholder, also was pleased about the move to hiring Blackstone Group to “take our business and iconic brand to the next level" the statement said. Blackstone Advisory Partners, the investment banking arm of the Blackstone Group, was hired for the task to "review and respond" to investors who have expressed an interest in partnering or investing with MSLO.

Once chairman and chief executive office of Martha Stewart Living, She had to relinguish her position and left the board after her conviction in 2004 for obstruction of justice and served 5 months in a federal prison. 

Martha Stewart wearing the Home Depot orange apron. Photo
courtesy of eEcostyle.com 

The reason why I brought up this news is somewhat interesting. Blackstone has been helping to revive the once dying business empire of Martha Stewart Living after three years of falling revenue. In fact, the results are somewhat promising. But did you know that it is the same private equity firm which MSLO has hired to take up its business branding to a higher level, that acquired a controlling interest at RGIS LLC in March 2007?

After the inventory company had lost $27 Million recently in a FLSA class action settlement case to tens of thousands of current and former employees, I am interested to know how Blackstone Group will be able to help the inventory provider regains back lost financial and business opportunities to a higher level. Although I am not crossing my fingers but it will be a challenging task to perform. 

About Blackstone Group:

The Blackstone Group is a global alternative asset manager and provider of financial advisory services. The firm's asset management businesses include the management of corporate private equity funds, real estate funds, mezzanine funds, proprietary hedge funds and closed-end mutual funds. Blackstone also provides M&A and reorganization advisory, as well as private placement services.

It is one of the largest private equity firms and alternative asset managers in the world, with more than $98 billion in assets under management and such notable holdings as Hilton Worldwide, Equity Office Properties Trust, The Weather Channel, and Universal Parks & Resorts. Blackstone has 17 offices around the world.

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McDonald's to Hire 50,000 Employees...in 1 Day

Image courtesy of McDonald's Corporation

Dubbed as, "National Hiring Day", McDonald's Corporation plans to hire up to 50,000 workers nationwide on April 19. You don't have to wait for that day to submit your job application. You may do it now.

This is probably the more ambitious hiring event of the company since the economic slowdown 3 years ago. Currently, the company has more than 14,000 restaurants and more than 600,000 workers across the United States.

Positions for hire vary from management positions, store crew, and logistics positions according to its website. Management positions can have as high as $50,000 a year salary, and store crew positions can have $8.50 an hour depending on the State you live. Current federal minimum wage is $7.25 an hour.

The McDonald's headquarters complex, McDonald's Plaza,
located in Oak Brook, Illinois.

Although many labor and economic analysts say that it is too early to predict, massive hiring all over the nation is a good sign that the economy is in its way to recovery. Just recently, the US Department of Labor and Statistics announced that there was a gain of 216,000 new jobs created in March alone, pushing the unemployment rate improves by 1% from 9.8% last year to 8.8% this month, the lowest level in 2 years.

So, if you are interested, log on to its website and try your luck. You may find yourself working for this $34 billion company in no time.


Important data about McDonald's Corporation:

Revenue:                    US$24.075 billion
Operating Income:      US$7.473 billion
Net Income:               US$4.949 billion
Total Assets:              US$31.975 billion
Total Equity:               US$14.634 billion
Employees:                 650,000 Current


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Office Depot's Overpricing Practice is Paying a Great Price

Office Depot’s corporate headquarters in Boca Raton, Florida.

Some of you may have heard few years ago about Office Depot being investigated by the US Department of Justice or by an Attorney General due to overpricing, and how the retailer was slapped with millions of dollars as a result.

But here comes Office Depot again for the nth time. The US Department of Justice (USDOJ) is currently investigating a similar case of overpricing from some schools and local state agencies in the State of Florida. It was done by switching them to a different pricing option without the State's full knowledge or understanding.

See, this is not the first time the company had engaged with such practice. Not twice. But fourth time in a row:

• Office Depot was investigated sometime in 2008 for the second time. It was in June 2010 last year when the retailer had agreed to pay back $4.5 million to eligible claimants in Florida including schools, and local state agencies. Office Depot had denied the allegation and admitted no wrong doing.
• The third case was on 2008, the same year when it was first investigated. But this time it was the State of California as a state customer. Again, 2 years later, the company agreed to refund $2.4 million as part of the settlement.
• And the fourth, it was between 14 school districts and some non-profit organization in Missouri. After the investigation by the Attorney General, Office Depot agreed to pay $320,000 back to those schools and organizations.

As of 2009, Office Depot has undergone investigations for committing the same practice in 6 States including Ohio, California, Florida, Missouri, Colorado, and Texas. Now the company is paying a great price:

• Shares of Office Depot has started to slide as early as Tuesday after the company had disclosed in a SEC filing that it was a target of Department of Justice investigation.
• It lost $57.8 million or 21 cents a share in the fourth quarter last year.
• CEO Steve Odland resigned in October last year
• Just this month, the joint venture that owns Office Depot's headquarter sold it for $171 million.

What caused the apparent loss of business confidence for Office Depot by customers, investors, and creditors may be complex. But one obvious reason was its inability to rectify its old practice and the policy of customer transparency. I hope OD learns its lesson...this time.

Home Depot to Hire 60,000 Employees, Lowe's 50,000 this Spring

Lowe's store in Chapel Hill, North Carolina.

Home Improvement retail giants Home Depot and Lowe's have announced this week that they plan to hire more than 110,000 employees combined.

The two giants are ramping up workers in preparation for the coming Spring season. As everybody knows Spring is the Christmas for these retail stores and traffic is at its peak during this season. Most of the hiring opportunities are for retail stores and distribution facilities nationwide. They are looking for sales floor associates, backroom stockers, cashiers, parking attendants, flower and garden associates, replenishment specialists, logistics analysts, drivers, etc.

If you are looking for work anytime now, go and log on to their career websites.

Home Depot Career Webpage

Lowe's Career Webpage

or, if you prefer, visit any of their stores in you area for hiring information and requirements.

Do you think this could be a sign that th economy is getting better? All I know is that the retail industry is slowing to improve since the December last year. One more thing, the US Labor Department has reported that jobless claims has plunged to their lowest level in more than two years. And, unemployment rate fell to 9% in January last month from 9.8 last year.

I think these indicators tell us something about economic improvement as well.

Home Depot Corporate Data:
Revenue:                      US$71.3 Billion
Operating income:         US$4.38 Billion
Net income:                  US$2.26 Billion
Total assets:                 US$41.2 Billion
Total equity:                 US$17.8 Billion
Employees:                  322,000 (Dec 2009)
Website:                      www.homedepot.com

Lowe's Corporate Data:
Revenue:                     $47.2 billion USD
Employees:                 238,000
Website:                     U.S. website
                                  Canada website

News sources from CNN Money and PalmBeach.

Galleria integrates Retail Solutions With RGIS to Offer Optimized Space Services

A Giant Eagle store in Stow, Ohio. One of Galleria's retail customer being optimized using the company's ISO.

Just very recently, Galleria's Intelligent Store Optimization (ISO) converged with RGIS' Smartspace retail space solutions services to provice increased visibility to the store layout in order to "help retailers optimize every square inch of selling space."

Just in case you didn't know, Galleria is a merchandising solutions for Walmart, Tesco, Safeway, Morrisons, among others.  Galleria's ISO provides retailers with 5 main functions which include Automation of Macro Space Allocation, Space Optimization, Space Models, What If analysis, and Opportunity Analysis. RGIS is an inventory provider for the Fortune 500 companies worldwide.

What this partnership tells to retailers is, "I will realign merchandise in your store, make them more visible to your customers to boost sales and revenue." If you've been in the retail business for a while, all these terms on retail optimizations is about intelligent merchandising. Read more about Galleria Retail Technology and RGIS partnership here.

Top 10 US Retailers with Best Customer Service for 2010 Holiday Shopping

A JC Penney store in Florida

Few days ago, The National Retail Federation has released the result of its latest survey on customers' top choice of retailers for the 2010 holiday shopping. It was based on more than 9,000 feedback on the question which retailers offer the overall best in customer service for both offline and online shopping experience.

In other words, the survey answers the question which stores will give you the least headaches when it comes to customer care, shipping issues, return policies, quality and product availability and over all shopping experience. Here's the Top 10 US retailers for customer service in random order:

• Amazon.com
• JC Penney Stores
• Kohl’s Department Stores    
• Overstock.com                 
• Lands’ End  
• Zappos            
• L.L.Bean               
• Newegg              
• Nordstrom           
• QVC               

Amazon Headquarters is located at PacMed building in Seattle, Washington

One would wonder why giant retail stores such as Walmart, Bestbuy, Target, Sears, Macy's, among others are not part of the list. In fact, Walmart Stores alone was hailed as the most preferred shopping destination last Black Friday. The list was something that I did not expect because in my opinion, there are more popular and even more deserving to be in the list. But who am I to judge the result of the survey. It is not a popularity contest in the first place. So I rest my case.

The final ranking will only be announced on January 11, 2011 at the NRF's 100th Annual Convention and EXPO.


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• Internet Retailer's 2010 Magazine's 500 Top Retailers
• NRF Top 10 Retailers Survey details
• Top 10 Tips for a better online shopping

Walmart's Biggest Black Friday Sale Ever!

 Walmart's Black Friday 2010 Ads

Walmart promises that this year's Black Friday will have the biggest sale ever, surpassing all deals from previous years. Other retail giants Best Buy, Macy's, Sears, Target, Toys R Us, are also expected to boost sales for this Friday's event. Some local Walmart stores will even open as early as midnight on the onset of Black Friday. So check your local Walmart store out for store opening time.

It has been projected that holiday sales are expected to climb a convincing 2.3%, higher than last year’s 0.4 percent increase. This projection was based on retail sales last month that went up by 1.2%. This year, most of Walmart Black Friday Ads shall consists on electronics, toys, gadgets, furniture, apparel and jewelry.

Don't miss this great opportunity. Happy Shopping!

Self-scan Inventory Part 3: Is it Really Worth Your Money?

A typical Target retail store. The company hires an inventory service to count merchandise. 

This is the last part of this 3-part series on self-scan inventory:

• Self-Scan Inventory Part 1: What is it?
• Self-Scan Inventory Part 2: Who are they and what benefits they offer?
• Self-Scan Inventory Part 3: Is it really worth your money?

In my previous posts (please refer the series listed above), I already have covered much of the topics I wanted to discuss. Now, I will give a short comparative table in terms of expenses, and advantages between self-scan inventory vs. hiring a professional inventory service. The goal of this post is for you to decide which is more appropriate to your retail business.

Consider the following data:

• Store Name:                                          (withheld)
• Number of Employees:                          8 including Store Manager
• Approximate number of Merchandise:    35,000
• Nature of Business:                                Retail, Ladies' Bags and Accessories
• Scan Mode:                                          Auto Scan, UPC Integrity, Verify 20%

A comparison chart between self-scan inventory and hiring a professional service
Self-Scan Inventory Required to rent inventory equipment with at least 9 scanners. The extra scanner is needed just in case a unit malfunctions. Weekly rental rate starts at $1,500 Equipment Rental Cost Using Daily Rate: $990.00 If you close your store for the inventory, estimate the potential net profit loss for the day. Here, I will provide a conservative estimate: $2,000 If you plan the inventory prior or after store hours, all staff must be present and therefore overtime hrs may require. Use time and a half to pay overtime hours spent. Estimated hours spent based on 8-hour inventory time at an average of $10.00/hr OR $15.00/hr including overtime: $840.00 You may also include expenses such as food/snacks for your staff when the inventory goes beyond wee hours. When you open your store the next morning, don't be surprised when some of your staff looked so tired. Some won't show up, and some will call and sick. If you plan the inventory while the store is open, you can only maximize half of your employees since the other half will focus on sales and customer service. You will spend twice the time for inventory due to staff limitation. If you intend to ask help from the closest store (if it happened to have one) in your area, the other store will be short-staffed as well. Who will train you and your staff for the inventory? Remember, you only rented the equipment. Estimate time spent for familiarizing the equipment, procedures, actual training and exercise. Estimated time to spend: 30 minutes-45 minutes. It is estimated that store staff count 30% bit slower than professional inventory crew. The average auto scan speed for a professional inventory member is 800 auto scans per hour. The average auto scan speed for regular store employee is 560 auto scans per hour.  If your store has an estimated 35,000 pcs. of merchandise, it takes about: 9 hours to complete the inventory using your employees. If you split your staff into 50/50, you will spend 18 straight hours of inventory time, not including lunches and breaks! When you split, adjust and recompute your Equipment Rental Cost from daily to weekly rates.   6 hours to complete the inventory using professional inventory crew. You have the option to hire a dedicated trainer-internal auditor to train and assist employees for all inventories if your corporate requires it.		Hiring A Pro No equipment rental. You can always open your store while the inventory is ongoing which means no profit will be lost. Fixed Inventory Fee. Only ask a flat rate even if inventory may extend. Inventory service may even be penalized for going beyond the agreed duration time. No overtime pay for employees. Your employees can focus more on customer service. No training of staff needed. No hardware-software hassles. No troubleshooting of equipment. Inventory done in due time. Saved 30% more on time and effort. Inventory crew is done while your staff is 3 more hours to go counting. You don't have to worry where to get staffing.  You get well-trained inventory crew, and experienced inventory service  You save energy, time, avoid unnecessary inconveniences associated to a stressful physical inventory.
Estimated Cost: From $1,830 - $4,000		Estimated Cost: Flat Rate: $2,100

All data are for informational purposes only. Should you have any question, it is always best to discuss it with your company or with the inventory professional of your choice. The author shall not be responsible for any damage(s) arising directly and indirectly as a result of misuse or abuse of information herein.

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Self-Scan Inventory Part 2: Who are they and what benefits they offer?

Jewelry and silverware company, Tiffany & Co. uses self-scan service for its product inventory

This is the second part of this 3-part series on self-scan inventory:

• Self-Scan Inventory Part 1: What is it?
• Self-Scan Inventory Part 2: Who are they and what benefits they offer?
• Self-Scan Inventory Part 3: Is it really worth your money?

In my previous post, I mentioned about what essentially is a self-scan inventory. This post deals with the benefits of having self-scan inventory, why self-scan inventory is better in many ways than hiring the pros. Lastly, I will list some companies that offer self-scan service. I will also attempt to provide good reasons why retail owners should consider self-scan over hiring a professional inventory service.


Benefits of self-scan inventory

It is Cost-effective.
Self-scan inventory can save you an average of 20% inventory cost over hiring a pro. In fact, some retailers that use the self-scan service even boast up to 50% net savings over their stores' current inventory costs.  This average savings may include cost of equipment usage, manpower cost, etc.

System Compliance. 
Most self-scan systems are approved or at least complied with all major external auditing firms. These are the Deloitte & Touche, Ernst & Young, KPMG, or Price Waterhouse Coopers. These firms adhere to the basic requirement of Sarbanes-Oxley Act of 2002, which states that it requires accuracy in the valuation of a retailer's inventory.

Result is relatively more accurate.
The logic behind it is that since you utilize your employees to count merchandise, they have better knowledge of YOUR merchandise and they  know WHERE your merchandise are located. Most importantly, employees have vested interest in the success of the inventory process.

Software designed for a specific requirement.
Each retail store has specific needs for inventory reports. Most of these providers can customize the result of your inventory and the data that you require unlike some pros that have rigid software specifications.

Complete control.
You will have a better control of your inventory, both with your employees, the inventory process, and how you like the outcome of the inventory. In hiring a pro, you have to comply with the rigid agreement, with their rules and procedures of inventory process. When you do it with your own, you will be the boss. When somebody do it for you, you are constrained with the rules of the inventory procedures by the pro. You can always delay, extend, or even suspend your inventory using self-scan because you control your time. When hiring a pro, the inventory manager is time driven. If the inventory extends, the pro loses time... and money.


Flexibility.
In self-scan, you can do how you want and when you want the inventory to be done. In hiring a pro, even if you wanted more time to validate data and double check physical merchandise, you won't be able to do it because you are tied with the time allowable for data verification and other constraints imposed by the inventory service. When the inventory is over, you won't be able to call them back and let them count free of charge for merchandise that have missed during the inventory. In self-scan, as long as you have the equipment, you can always perform any post-inventory changes.

Companies that offer self-scan inventory

The Bed Bath & Beyond company uses self-scan service to audit its retail stores

There are literally dozens of solutions providers of self-scan in the United States alone. Some of them simply offer the hardware without the inventory software that runs them. Others offer bundled software with limited support. Others offer complete line of products and services. Most equipment for rental ranges from barcode scanners, wired and wireless access points, terminals, interrogators, to readers with WiFi connectivity, complete with inventory management software and operating systems.

To know more about these companies, I am going to list some of them here:

• Rapid POS
• Barcoding
• Barcode Rental
• Label Data
• MSS-Software
• Rent Barcode Scanners
• Barcode Trader
• Legacy Global
• Unified Barcode  And the list goes on.

But there are at least 2 companies that I believe stood out from the rest. These two companies offer complete line of self-scan products and services which include the hardware, software customization, process, and customer service:

DataScan
www.datascanlp.com

• Been in the business for 35 years now.
• The only self-scan company with SAS 70 Type II Certification. 
• Uses the latest innovation in data collection such as IP data transmission, real-time reporting, etc.
• The company boasts as the nation's largest self-scan inventory with over 40,000 scanners in stock.
• 24/365 Help Desk service 
• DataScan provides self-scan inventory over 40,000 counts each year in over 15 countries worldwide. 

Hart Systems

www.HartSystems.com

• Over 40 years in the business
• Hart Systems are used United States, Canada and in 27 countries around the world.
• Offer 24/7 Help Desk and IT support, file processing, and data archiving.
• Hart Systems complies and are audited by all major accounting firms, Deloitte & Touche, Ernst & Young, KPMG, or Price Waterhouse Coopers.  These firms have given their approval for the use of Hart’s scanning system to take self-scanned physical inventories.
• On demand reporting

Now that you have some ideas about what is self-scan, what are the benefits, and which companies offer these services. In my last part of this series, I will examine the benefits as claimed by these companies and we compare them side by side against the benefits of hiring inventory providers. Then you will decide which group live up to what they wanted us to believe. And which one that really offers the best bang for your buck.

Cheers!


Inventory and POS systems: