OWATONNA ' When Lowe's Home Improvement store officially opens its doors in Owatonna next week, the improvements that it could bring to the city and its economy are expected to reach far beyond those who are trying to spruce up their homes and gardens.
The Owatonna store, which will have its official grand opening on Wednesday, is expected to generate millions of dollars in retail revenue each year. Although corporate officials declined to give specific projections for the Owatonna store, they did say that the company averages more than $30 million in sales per location annually. Overall, the 58-year-old North Carolina-based company reported more than $35 billion in sales last year.
David Murray, manager of the Owatonna store, said that he doesn't expect the local branch to make $30 million in sales the first year. Still, he expects plenty of business to keep his employees busy as customers get ready to make improvements both inside and outside their homes.
'The snow is starting to melt,' he said.
The store is the second retail outlet opened in Minnesota by the Lowe's. The first Minnesota store in the Twin Cities suburb of Coon Rapids opened its doors in early December 2004. If the Coon Rapids store is any indication, the Owatonna store should do well.
John Wakeman, manager of the Coon Rapids store, said he and corporate officials have been 'blown away' by the customer response.
'It's been fantastic,' he said. 'My company won't allow me to divulge financial information, but I can tell you it's way above expectations.'
Wakeman said his location has made deliveries as far north as Canada and as far south as the Iowa border.
'My delivery trucks have been in Owatonna quite a bit,' he said, laughing. 'I'm sure David (Murray) isn't too happy with that.'
Murray declined to say from how far away or from where the Owatonna store might draw its clientele. He did say, however, that unlike the Coon Rapids store, the new store is expected to draw on a more rural customer base, something Murray said was appealing for the retailer.
'Lowe's has always been interested in rural markets and growing markets,' Murray said. 'It's a great opportunity.'
Jennifer Smith, a spokeswoman for Lowe's, said the home improvement retail giant was drawn to Owatonna for many reasons.
'Our corporate marketing staff has over 400 stated criteria they examine to determine if we are interested in moving into a community,' she said. 'They range from the proximity to other stores and the trade forecast for a region to the percentage of home ownership in an area and the average age of the homes. Owatonna gives us tremendous opportunities for growth.'
The potential of the Minnesota market for Lowe's appears great. In February, the company announced plans for a third location in the state, one in the Minneapolis suburb of Plymouth. The store is expected to open this year, most likely in late autumn.
Jobs and development
In addition to bringing sales revenue to the city, the opening of Lowe's has additional economic impact upon the city. One such area of impact is in the creation of jobs.
Thus far, the store has hired 128 people, Murray said, though as many as 140 jobs could be available at the store. About 60 percent of the employee positions are full-time, Murray said. Of the 128 people hired so far, all but five people are from the Owatonna-Steele County area, he said.
'I brought in some people from (out of state), but not many,' Murray said.
And when large retail stores come to town, there is generally the prospect of other businesses locating in that town. Such seems to be the case with the coming of Lowe's, according to Brad Meier, president and CEO of the Owatonna Area Chamber of Commerce and Tourism, who said that every new business that opens makes it easier to bring more businesses to the community.
'When a business like Lowe's comes, it certainly helps attract other commercial-type businesses,' said Meier.
The store is located at 1280 21st Ave. NW, off Highway 14 West, in Owatonna, adjacent the Wal-Mart SuperCenter and in an area of the city that has seen rapid commercial development in recent years. Since Lowe's announced last year its plans to build in Owatonna, several new businesses have sprung up in the immediate area, including MGM Liquor, The Game Stop and Anytime Fitness, which have all opened their doors since November 2004.
Meier attributes the development of the area, at least in part, to Lowe's.
'Already we've seen that it's brought more businesses to that area,' he said, 'and I think it will continue.'
The area in which Lowe's is located is prepared for even more development, said David Strand, Community Development Director for the city.
'We have the (building) space there for five or six more businesses,' he said.
Strand also said the cities infrastructure is sufficient for another 'big box' retailer such as Lowe's to move in nearby.
John Marceau of Acacia Real Estate of Wayzata, who developed the area around Lowe's, said that part of town is prepared for even more development.
'We bought (undeveloped lots around 21st Avenue Northwest) before we even knew Lowe's was going in,' he said. 'When they decided to go in, it turned my triple into a home run. I've got Chinese restaurants from New Jersey, who've heard there's a Wal-Mart and a Lowe's close by, sending me checks, sight unseen.'
Marceau said plans for the area are developing quickly.
'We've got another 40,000 square foot multi-tenant building that will be going up across from the commons,' he said. 'About 14,000 square feet of that is under commitment for an office supply store. Right next to McDonald's, Ruby Tuesday's Restaurant will be breaking ground in June. Across the road there is a Kwik Trip going in. Besides that (on Highway 14) there will be another restaurant go in.'
While he declined to name names, Marceau said a 'big-box style clothing store' has expressed interest of building in the area as well.
Meier said he believes the area between Cabela's in the Three Corners area and Wal-Mart west of Interstate 35 will continue to see commercial and retail growth, and the city has beencontacted often by businesses to inquire about the situation here in Owatonna.
'I really can't get specific,' he said. 'I don't want people to get an impression one way or another. There has certainly been interest from larger department stores in locating in that area.'
The Lowe's store in Owatonna is one of 150 new stores the corporation plans to open this year, according to company officials. That, coupled with the 140 stores the corporation opened last year and the 160 planned for next year, marks the current period as the most aggressive expansion the company has known in its 59-year history.
In that history, Lowe's has grown from a small-town hardware store to a publicly traded company that ranks 50th on the Fortune 500 list, with more than 1,075 stores in 48 states.
In 1946, H. Carl Buchan, part owner of the North Wilkesboro Hardware Company in North Carolina, envisioned creating a chain of hardware stores. At the time, the hardware store was a typical small-town hardware store, selling everything from overalls and snuff to wash tubs and work boots, the corporation has said in press releases. Buchan bought out his brother-in-law, James Lowe, and began to concentrate on selling hardware, appliances and building materials ' essentials during the post-World War II building boom.
The company went public in 1961 and began trading on the New York City Stock Exchange in 1979.
Part of the company's strategy has been to cater to the female shopper.
'When we made the transfer to becoming a large format retailer in the early '80s, we did a tremendous amount of research,' said spokeswoman Smith. 'About 80 percent of the major home purchase decisions are made by females in a household.'
Smith said the company tries to appeal to that market with a bright, clean environment, wide aisles, and large displays showing how products might look in the home. Catering to a female clientele had unexpected benefits.
'We found out our male customers like it, too,' said Smith.
The new Lowe's Home Improvement store will hold its official ribbon-cutting ceremony at 5 p.m. today before opening to the public next week. Store manager David Murray said that though the official grand opening of the store will be on Wednesday, the doors will be open to the public on Monday.
'Monday is mainly for commercial sales, but we won't be carding anybody at the door,' he said. 'We don't stop anybody from coming in.'
Jason Felts can be reached at 444-2378 or at firstname.lastname@example.org.