Business

Welcome to the neighborhood

Before today, Lowe's stores in Charlotte formed roughly a ring around Interstate 485, leaving uptown and older, closer-in neighborhoods in a big hole in the middle.

Now, the Mooresville-based home improvement retailer is coming to the center of town in a fashion that holds clues for the company's future, opening a South End store this morning that's no run-of-the-mill big box, at least on the outside.

With a red-brick and tan stucco façade, bike racks, decorative lighting and iron fencing, and rooftop parking with a garden and skyline view, the store is meant to fit into the surrounding residential neighborhood and nearby older industrial buildings. That's no small task for a 145,000-square-foot home improvement warehouse.

But by situating the store at the center of a block that also includes restaurants, future office space and 69 condominiums under construction, the company believes it has succeeded. And in doing so, it will reach urban customers it hasn't conveniently served in the past.

“If you think about where the closest Lowe's store is from here, there's several that are several miles away,” Lowe's regional vice president Jeff Sain said this week during a tour of the store at South Boulevard and Iverson Way. “We felt like this was a great location for us.”

The store has been in the works since 2002, and at 145,000 square feet is about the same size as traditional Lowe's. However, it's on a smaller piece of land – 11 acres – than ordinary Lowe's stores, presenting additional design and construction obstacles.

The company revised its proposal after residents in the adjacent, historic Dilworth neighborhood voiced concerns, and real estate experts estimate that it cost perhaps twice as much as an ordinary Lowe's to build. According to a company news release on the project, a store of that size represents an average investment of $18.5 million, excluding the products in the store once it's complete.

As good sites for traditional big boxes become scarcer, though, chains such as Lowe's and Home Depot have to increasingly branch out in such fashion with new store designs and sizes, said Nick McCoy, who tracks Lowe's for Ohio-based market research firm TNS Retail Forward.

The Charlotte store is a perfect example of adding a store in a dense urban area, he said. A similar approach can also help the company grow in the Northeast, he said, where it also has room to build more stores in general.

Future growth

Lowe's has said recently that it's considering smaller stores than it generally builds, which could help the company grow in rural areas. It's now building a 66,000-square-foot store, for instance, in Tarboro, in rural Eastern North Carolina.

“As the industry is obviously tough and they're looking for ways to continue growing, it's not a surprise they're testing new formats – especially a smaller, fill-in format,” said Cowen & Co. analyst Laura Champine.

She said she thinks home retailers should essentially stop growing until demand recovers.

Lowe's has reduced the number of new stores it expects to open next year, planning 75 to 80, compared with 120 this year. But although shopper enthusiasm is flagging, the company has said it is building with the long term in mind and believes its business will recover. For now, it's counting on smaller home maintenance projects and everyday low prices to bring in customers.

Parking on the roof

Despite its high-fashion outside, the South End Lowe's begins to look familiar inside the front door – with one rather notable exception: The elevators to the right, just past the main entrance, head up to the parking deck. The store is one of only three Lowe's in the country with rooftop parking, spokeswoman Maureen Rich said. There are also 200 ground-level parking spots.

Otherwise, though, it's very much a regular Lowe's, with brightly lit expanses of home and garden products, including a selection of inflatable Christmas lawn ornaments (yes, even a Nativity scene) to the left and Tool World to the right.

That doesn't surprise experts, who note that providing a consistent store experience has long been one of Lowe's strengths.

Nonetheless, there are subtle differences in the product range: A 29,000-square-foot garden center offers rows of pansies and a hanging basket selection the company expects will be popular in a more urban setting. The Lowe's also will place a greater emphasis on house and patio plants because of many surrounding condos and apartments.

To fit the neighborhood, it also offers a wider range of mailboxes that are installed on houses and fewer curbside styles. Because local yards are smaller – or, in the case of uptown condos, nonexistent – it won't stock as many riding mowers. And it won't sell vinyl siding at all, opting for Masonite and brick instead, Sain said.

Other touches include electric forklifts and interior garbage chutes to cut down on neighborhood intrusion. Vendors even designed special racks to hold pine needles beneath the parking ramp, instead of storing them in a trailer in the parking lot, as happens at other Lowe's, Sain said.

“You still feel like you're in a Lowe's,” spokeswoman Maureen Rich said, at the end of a tour of the store this week.

“That,” said Sain, “was our goal.”

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