What's In Store

Lowe’s CEO details plans for growth as construction begins on Charlotte tech hub

Construction began on Lowe’s 23-story tech hub in South End this month, and CEO Marvin Ellison said the facility will be crucial in the company’s growth strategy.

The home improvement chain expects to move into the new building in 2021, Ellison said during the company’s earning call Wednesday. In June, the company said it is spending $153 million on the project.

After just over a year with the company, Ellison told the Observer Wednesday in a phone call, part of his plan going forward will be to continue to modernize the company’s digital business — and Charlotte workers will be a key part of that strategy.

“(The tech hub) is going to be critical,” he said. “We had fallen behind relative to modern technology. And it doesn’t matter what business you’re in, whether its retail or manufacturing, if you’re not on the cutting edge of technology, you’re going to fall behind.”

The 2,000-employee hub will employ software engineers, infrastructure engineers and data analysts, Lowe’s said in May.

The 375,000-square-foot office in South End is a joint venture between Childress Klein and Ram Realty Advisers.

Lowe’s workers moved into a temporary office in Charlotte Plaza Aug. 12. Ellison said there are now just over 150 workers in that office, and Lowe’s is recruiting more.

“We’re already attracting outstanding candidates because they see the investment that Lowe’s is making and they want to be a part of that,” Ellison said.

Lowe’s told the Observer in June the average annual pay for new tech hub positions will be more than $117,000.

Home base

Ellison said Charlotte was one of the company’s best performing regions this quarter.

“Every retailer wants to have great performance in their home state, in their home metropolitan area,” he said. “We have a real good thing here.”

Lowe’s announced its decision to move thousands of workers to uptown Charlotte in June.

This week, the company announced an expanded sponsorship with the Panthers and the NFL, including street festivals at Charlotte home games and NFL-licensed football and Panthers products in stores and online.

“You have to take care of your home base,” Ellison said. “And for me, I just felt it was important, not only to try to drive sales here, but to make sure we’re involved in some of the initiatives that help to make Charlotte a more stronger and more vibrant community.”

‘Incremental growth’

Several weeks ago, Lowe’s confirmed it would have a wave of layoffs after it decided to hire third-party assemblers and facility services.

But Ellison said Lowe’s is increasing its total number of employees, not cutting it.

At the time of the layoffs, Lowe’s spokeswoman Jackie Hartzell said the company expected to retain some of the employees in other roles.

Ellison said the company has added the equivalent of three full-time employees to every store on the sales floor.

“This is an incremental growth, not a reduction,” he said.

Lowe’s told the Observer Aug. 1 it employs about 300,000 people.

Earnings report

In its earnings report, Lowe’s reported sales in the second quarter at roughly $21 billion — up from $20.9 billion this time last year.

Net earnings were up to $1.7 billion in the second quarter of the year, compared to $1.5 billion this time last year, the company reported.

U.S. same-store sales increased 3.2% from last year, according to the second quarter earnings report, beating major competitor Home Depot’s same-store sales growth of 3.1%.

Ellison said this was the second consecutive quarter that Lowe’s same-stores sales growth outperformed the larger chain.

“We try to be a customer-centric company,” Ellison said. “We don’t spend a ton of time worrying about the competition.”

He said he believes if the company focuses on the customer, sales and growth will follow.

Lowe’s operates 2,003 home improvement and hardware stores in the U.S., as of Aug. 2, the chain reported.

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Hannah Smoot covers business in Charlotte, focusing on aviation and health care. She previously covered money and power at The Rock Hill Herald in South Carolina. She is a lifelong North Carolinian and graduate of the University of North Carolina at Chapel Hill.