It isn’t easy building a corporate reputation. Home Depot has emerged as the 800-pound gorilla in the home improvement market, and while a visit to its mammoth stores may be almost as exciting as a trip to Disneyland for customers who fancy home improvement projects, it has had its share of problems along the way.
It isn’t easy building a corporate reputation. Home Depot has
emerged as the 800-pound gorilla in the home improvement market, and
while a visit to its mammoth stores may be almost as exciting as a trip
to Disneyland for customers who fancy home improvement projects, it has
had its share of problems along the way.
Take for instance the battle surrounding Home Depot’s use of wood
products from environmentally sensitive areas. Over the years, activists
have organized protests at Home Depot stores, U-locked their necks to
store shelves that carried endangered wood and held store tours to
inform consumers about items made from old growth lumber and tropical
hardwood. Protesters were silenced in August 1999, when Home Depot
announced that it would stop selling wood from endangered areas by the
end of 2002, but the unwanted press caused Home Depot’s PR department to
step up the company’s profile as an environmental leader.
The negative attention doesn’t seem to have created any roadblocks to
financial success, though. Revenues increased 27% in 1999, from dollars
30.2 billion to dollars 38.4 billion, with profits up a whopping 44% to
dollars 2.3 billion.
Already a ubiquitous presence across the country, the 22-year-old
company also expects to double its number of stores by 2003, from 950 to
With stores averaging 130,000 square feet, that’s a lot of aluminum
siding for sale.
In October 1999, Home Depot joined the big boys on the Dow Jones
Industrial Average. It was also a top-10 finisher overall in Fortune
magazine’s latest ’Most Admired’ list and has ranked number one in its
category (specialty retailers) for seven consecutive years.
Mores stores, more PR pressure
As Home Depot has grown, the company has placed an increased emphasis on
PR. ’I’ve spent a lot of time helping people at Home Depot understand
the value PR has to a company of our size,’ says VP of PR Carol
’By showing the value of what we do, it obviously puts more pressure on
us to really try and handle the needs of the stores and the media.’
Handling the needs of the media is one thing Home Depot’s fast-acting PR
department seems to do well. ’I’ve found that they’re really
professional and respond very quickly,’ says Forbes senior editor Bruce
Upbin, who witnessed Home Depot’s PR machine in action several months
ago while in the car with PR manager Don Harrison.
A Miami TV station had been tipped off that some of the company’s
Christmas trees were believed to be infested with ticks. As the two sat
in rush hour traffic, Harrison called several store managers, the tree
grower and the Florida Agriculture Extension, and determined that only
trees in one store were infested and that the bugs were aphids. Harrison
was given the choice of fumigating the trees or burning them, and he
chose to burn 2,000 trees. Harrison quickly dictated a media advisory
over the phone, and the story died down the next day.
Home Depot’s PR department has also doubled in size since Schumacher
joined the company roughly a year and a half ago from Edelman. ’(PR) has
a more proactive role than in the past,’ says Schumacher. ’The staff was
smaller than it is now and given that, the department was very much
One example of proactive PR is the stepped up efforts to position CEO
Arthur Blank as a visionary by securing more speaking engagements and
making him more accessible to the media. This has started to pay off -
Blank was named one of the top 25 CEOs in Business Week in 1999 and has
made appearances on CNBC and CNNfn.
Despite this effort to increase Blank’s availability, Business Week
marketing editor Ellen Neuberger says that Home Depot’s executives are
’somewhere in the middle’ in terms of accessibility. She adds that she’s
had better luck with Home Depot than its competitors, and likes that
Home Depot doesn’t give a ’one-size-fits-all PR response.’
Home Depot’s PR structure continues to be driven by geography, but the
number of regional PR managers on staff has increased. There were six
when Schumacher joined the company and there are 10 today. This allows
PR managers (who are required to work in the stores periodically so they
will understand business from the inside) to oversee a smaller
geographic area. Schumacher also integrated the speaker’s bureau into
the PR department, rather than the internal communications department,
and added a layer of assistant PR managers.
Rather than have internal PR, public affairs and community relations
fall under the umbrella of PR, those division heads, as well as
Schumacher, report to Home Depot senior VP of marketing Dick Hammill,
since each function is seen as one facet of marketing. ’Reporting isn’t
as much of an issue as access,’ says Schumacher, who says that she has
easy access to the CEO.
While Home Depot previously relied on PR agencies only for projects, the
company bulked up its agency commitment a year ago by adding Edelman for
national media relations, reputation management, corporate image
building, store openings, product launches and sports marketing to
support its Olympic program and its sponsorship of NASCAR driver Tony
GCI Group became the agency of record for EXPO Design Centers, and is
charged with creating brand awareness locally and nationwide for the
centers, as well as the company’s design and decor products. According
to GCI EVP Susan Storey, the agency is attempting to create awareness
that the company is ’more than lumber and nails.’
While Home Depot may have silenced environmental groups with its
decision to stop selling wood from endangered areas, the PR team faces
For instance, the company has been portrayed as a killer of small
mom-and-pop hardware shops, which precipitated numerous real estate
But Schumacher claims that there are cases where Home Depot’s presence
has proved advantageous to small shops. ’We help make people more aware
of home improvement projects through clinic programs,’ says Schumacher,
adding that this has meant added business for smaller retailers.
Home Depot has also had to deal with numerous race discrimination
lawsuits, which are handled on a local level. ’Anything like that
definitely affects perception,’ says Schumacher. ’It’s important that we
handle it in a proper way and communicate the right messages: in
general, the company believes in making everyone feel welcome - not just
employees, but customers.’
These hindrances aside, the PR department doesn’t seem to have a problem
measuring its results. For instance, Schumacher says that the company
can immediately measure PR results when it’s involved in a real estate
battle, because if they’re successful, the store will get approved. With
950 stores on the way within the next three years, Home Depot’s PR
department will certainly have a lot of battles ahead. Luckily, its PR
tool kit is better stocked than most.
PR chief: Carol Schumacher, VP of PR
PR managers: John Simley, Don Harrison, Mandy Holton, Tom Gray, David
Day, Melissa Watkins, Jerry Shields, Dave Henry
Internal communications: Rob Hallam, director of internal
Public affairs: Gene Ormond, VP of government relations
Community relations: Suzanne Apple, VP of community affairs
External agencies: Edelman for national media relations, GCI for EXPO
Design Centers, plus a network of 25 local agencies in US markets and
one each in Chile and Argentina.