Doug Marrelli Manager - Lowe’s Global Sourcing
Global Purchasing – Local Retailing
Agenda Ø Global purchasing – Some things are different overseas compared with the United States Ø Local (USA) – How different are things? Ø Lowe’s – Information Ø Lowe’s secret Ø Local retail customer is #1 Ø Global Sourcing challenges Ø Changes – Then and Now Ø Q&A
Local USA Some things at home that make you go hhhmmmmmm
Lowe’s Information Ø Lowe’s started in North Wilkesboro, NC in 1946 Ø Over 40, 000 skus stocked in an average Lowe’s store Ø Average over 14 Million shoppers per week Ø Approximately 215, 000 employees Ø Over 1, 550 stores open (over 176 Million square feet of retail selling space)
Lowe’s Secret Who makes most of the purchases for the home?
Lowe’s 2007 Stats Ø Ø $48. 3 Billion Revenue Ranked #48 on Fortune 500 th state Opened store in Vermont – 50 Became international retailer – opened stores in Canada Ø Opened 153 stores in 2007 (which equates to opening a new store each and every 57 hours)
Lowe’s - near future Ø 2008 – Plan to open another 120 stores Ø 2009 - Plan to open retail stores in Mexico Ø Always looking for new opportunities
LG Sourcing, Inc. Ø Started in 1997 Ø Wholly owned subsidiary of Lowe’s Companies, Inc. Ø We have offices overseas staffed with LG Sourcing, Inc. employees Ø Just makes sense to buy direct from manufacturers, as we have continued to grow
Lowe’s TEUs Per Year
Local Retail Customer is #1 Ø Customers demand good valued product (what they want, when they want it) Ø More and more good value retail products are manufactured overseas Ø Need to understand what the local retail customer wants, find it overseas Ø Takes some digging
Global currency issues 1/01/07 5/20/08 1 Euro = us$1. 32 1 Euro = us$1. 57 Roughly 19% “increase” 1/01/07 5/20/08 1 RMB = us$0. 12 1 RMB = us$0. 14 Roughly 17% “increase” We buy in us$, overseas vendors pay for raw materials in local currency
China – sourcing pressures Ø Exchange rates Ø Raw material costs Ø New Labor laws Ø VAT rebate changes
Other global sourcing options Ø Vietnam Ø Thailand Ø Malaysia Ø Cambodia Ø Etc.
Changes – Then and Now Then Now Burma Myanmar Ceylon Sri Lanka Dutch East Indies Indonesia East Pakistan Bangladesh Container shipping did not exist Over $5. 5 Billion worth of everyday goods move in and out of US ports EACH DAY
Q&A
Thank you
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