Home Depot on Thursday announced it has acquired The Company Store, a catalog and e-commerce retailer of home goods and textiles, from owner Hanover Direct. Terms of the deal, which closed Dec. 19, were not disclosed, according to a Home Depot press release.
Founded in 1911, Wisconsin-based The Company Store also runs five physical locations, which were not part of the deal, according to the release.
The acquisition adds to the home improvement retailer’s online arsenal, already an important growth area for the company. Nearly two-thirds (60%) of both online and store-based sales are influenced by a digital visit, Kevin Hofmann, Home Depot president of e-commerce, noted at the company’s investor day earlier this month. Hofmann also said online sales of 6.4% are double the retailer's nearest competitor, presumably Lowe's.
At its investor day, Home Depot outlined a series of long-term goals to blur channels and address the needs of consumers and professionals alike.
"We are building the capability and investing to tailor our messages and scale," Hofmann said, according to a company transcript. "We've grown the online business by approximately $1 billion in each of the last four years… so these interconnected retail efforts continue to be a key growth engine for our overall business. And over the last few years, they've contributed approximately 20% of the company's total growth."
The company's latest acquisition could help compound those efforts. The Company Store was primarily a direct-to-consumer company, starting out as a catalog company in the early 20th century and transitioning the business to e-commerce fairly smoothly, with just a handful of physical locations.
While the brand’s e-commerce focus is unlikely to change, it could get a marketing benefit from Home Depot and its nearly 2,300 stores. Meanwhile, Home Depot gains another way to help its customers finish off each room in their homes after tackling the kind of repair, renovation and installation tasks that consumers often turn to them for.
The move could also help the home improvement retailer defend itself against any impending softness in home sales, which tend to drive sales of tools and building supplies — a fact that has helped home improvement retailers weather many of the industry's recent struggles.
"The Company Store is highly recognized and a staple in many households who are buying DIRECT and have been for over 100 years," Jim Fosina, CEO of Fosina Marketing Group, told Retail Dive in an email, adding that the move is "fantastic" on the part of Home Depot. "Consumers want MORE one-stop shop options in the verticals like home improvement by renovation, repair or decor that are available at multiple touch points, both direct and retail. Good move by both companies who clearly see the opportunity for their brands to reach broader into gender, channel and complementary products offerings and maybe even services. The Company Store’s long time database of direct to consumer customers will prove to be a highly valuable asset to the Home Depot in reaching more customers."
The extension of Home Depot's merchandising that The Company Store brings could serve as a challenge to the likes of Wayfair, Target, TJX Cos. and Amazon, which have all sought to boost sales of home goods in recent months. In addition to its success as an online retailer, The Company Store has strong relationships and industry-leading capabilities in the development and sourcing of high quality textiles across bedding, bath and related categories, Home Depot said in a press release.
"The acquisition of The Company Store provides product development and sourcing capabilities to help us expand our online décor business into broader categories across the entire home," Home Depot CEO Craig Menear said in a statement.