Bernie Marcus, who died earlier this week at age 95, helped create one of the largest, most successful retailing chains in the world only after being fired from his previous job and finding himself in his late 40s and out of work.
Together with Arthur Blank (on the left with Marcus in a photo from their time at HD), who had also been fired from the same retailer, and Ken Langone, a financier who put up much of the start-up money, they began Home Depot, today the fifth biggest retailer in the country with more than $150 billion in sales around the world and a book value of close to $385 billion.
Marcus and Blank – they were the merchandising and operations front while Langone stayed behind the scenes – – did it by inventing the home improvement warehouse concept, giant stores of 100,000-square-feet or more while the typical chain back then was barely half that size. Adapting the category killer retail strategy where consumers knew whatever they were looking for they would find at Depot, they also employed former tradesmen as sales help who would not only sell a do-it-yourselfer the power tool, screwdriver or widget they needed for their jobs but would also teach them how to use it.
It was a brilliant strategy and in growing since its founding from its original store in Atlanta in 1978 it put dozens of local and regional retailers out of business and today only Lowe’s – still just a little more than half its size – remains as a true national competitor. A few regionals continue in business – Menard’s is the largest – and two independent buying co-ops, Ace and True Value, also serve the sector but Depot far and away has the biggest toolbelt of any retailer in the DIY space.
And while the category killer model that included chains like Bed Bath & Beyond, Toys’R’Us and Circuit City eventually fell victim to complacent management, private equity debt and finally the rise of Amazon and e-commerce Home Depot remained dominant and in fact has built up a sizeable online business that now accounts for close to 15 percent of its total sales.
Ironically the company Marcus and Blank both worked for – and were fired from — was Handy Dan, also a home improvement chain that is long since gone…another victim of Depot’s relentless expansion and takeover of the channel.
Marcus served as CEO for the first two decades of the company’s existence before turning over the role to Blank while remaining as chairman until he retired in 2002. That’s when with a net worth estimated at $11 billion at his death, he turned to philanthropy, donating huge sums to many Atlanta institutions, including the Georgia Aquarium and Piedmont Hospital. He also supported a number of civic and social causes but over the past few years increasingly turned his attention to politics, becoming one of Donald Trump’s biggest supporters in his three bids for the presidency.
This most recent time Marcus initially said in an interview with the New York Post that he was “struggling” with supporting Trump, saying “He can’t keep his mouth shut…I’m afraid if he’s elected, the first thing he does is go after his enemies, starting with the Republicans.” Never the less last November he endorsed Trump in an op-ed piece in RealClearPolitics, writing, “(W)e cannot let his brash style be the reason we walk away from his otherwise excellent stewardship of the United States during his first term in office.”
Home Depot has gone to great lengths to separate itself from Marcus’ political leanings, emphasizing he has not no role in the company for more than two decades. Depot is significantly larger and more dominant than it was while he was an executive and today has expanded into home décor and a huge business with professional builders. Yet it was Marcus and Blank – the latter also many years removed from management – that created the basic template of giant orange-adorned stores and employees wearing aprons with that same shade of orange that is the foundation of Home Depot nearly 50 years later. When you look at other giant Big Box Chains like Walmart, Target and even Costco and see how much different they are today than when they were founded, that may be Bernie Marcus’ greatest accomplishment and legacy.
WarrensReport 