Lowe’s retail company, which deals in home improvement, is the United States and Canada’s second-largest hardware chain. It used to be the largest hardware chain in the States until Home Depot overtook it in 1989. However, it still is ahead of the rival competitor Menards. Along with being the second-largest hardware chain in its origin country, it is also the second-largest globally. The first is Home Depot, but both of these chains are ahead of European competitors like Merlin, OBI, B&Q, and Leroy. Here, let’s know Who owns Lowe’s?
Lowe’s Companies Inc. is commonly known as Lowe’s and is headquartered in Mooresville, North Carolina. 2,197 retail stores are catering to hardware and home improvement currently in North America if we go by reports of February 2021. Lowe’s currently has a market capitalization of $137 billion. The company is currently under the leadership of Marvin Ellison, who was appointed president and CEO of the company in 2018.
Lowe’s owes its name to its founder L. S. Lowe who began this multimillion-dollar company as a local hardware store. The company was meant to stay in the family as Lowe’s daughter inherited it after his death. However, it went public in 1961 after the death of Carl Buchan. Lowe’s son-in-law. It is currently owned by a mix of institutional and insider shareholders and 21% of shares collectively owned by people from the general populace.
Founding Family- Who owns Lowe’s?
Founded in 1921, Lowe’s was named after its founder L. S. Lowe (1879–1940), and was opened as a single hardware store in North Wilkesboro. In its initial years, Lowe’s target customers were professional contractors, and the store design of the first store was very much like that of a local hardware store. A family business through and through, Lowe soon welcomed his son as well as his son-in-law in the new business.
The company exchanged hands within the family after Lowe’s death. Ruth Buchan became the company owner, and she sold it to James Lowe, her brother, in the same year she inherited it. In 1943, James involved his brother-in-law Carl Buchan as a business partner. Bringing in Buchan was a great decision made by James as Buchan was the one who foresaw how important construction business would become post World War II.
The store then concentrated on providing building materials and hardware solely based on instinct. This focus was important because previously, Lowe’s had sold a wide range of products that included groceries, produce, dry goods, horse tack, and snuff.
A property in Sparta, North Carolina, was bought for a second store in 1949. Eventually, Lowe’s son-in-law, Buchan, went on to become the store’s sole owner in 1952. Lowe’s was then incorporated as Lowe’s North Wilkesboro Hardware. In 1954, James Lowe branched off the business and started Lowe’s grocery food chain.
In the following year, 1955, Buchan began expanding and opened three stores in North Carolina. The new locations for Lowe’s hardware were in Asheville, Charlotte, and Durham. By the end of the same year, Buchan had succeeded in building six stores. Thus, under whose leadership Lowe’s, Buchan saw expansion and grew into a chain comprising 15 stores by 1960, i.e., in just five years.
A Public Holding
When Buchan died of a heart attack in 1961, his executive team’s decision, which included five people, to take the company public, this executive team included Robert Strickland and Leonard Herring, who decided on Lowe’s Companies Inc. when the company was made public. On the first day of trading, 10 October 1961, over 400,000 shares were sold at $12.25 per share. The following year, Lowe’s earned annual revenue of &32 million and was operating a chain of 21 stores.
Along with this change, a plan concerning profit-sharing was also instituted for the employees. The retail chain continued gaining profit in the coming couple of decades and was listed on the New York Stock Exchange in 1979. Two years later, Lowe’s made its way to the London Stock Exchange.
A major change in leadership came in 1978 when Robert Strickland was appointed the chairman of the company. Under Strickland, a new approach to the local hardware store design was brought in. He marketed the store by targeting homeowners who preferred the do-it-yourself method. Since this method gained popularity with time, Lowe’s customer base underwent an expansion. As a result, more than one-half of the chain’s sales were not too professional contractors as it previously had been, but to non-professionals from the general populace who subscribed to the nationwide trend of DIY.
Even then, Lowe’s biggest competition was the Home Depot. As a result, Lowe’s business suffered in the 1980s because the market was more receptive to the big-box store chain format. Lowe’s was initially resistant to this megastore approach as their stores operated in small towns and worried that their customers would not receive the mega-store format with open arms. But it soon became a matter of survival, and Lowe’s had to adapt.
Lowe’s stores soon changed their appearance and, in contrast to the original store resembling a local hardware store, became huge buildings that now resembled a warehouse more than a small retail store. The products offered were also expanded. Along with the building supplies and large tools, the product line also included home appliances, garden tools, products, and home decoration.
In 1982, Lowe’s recorded its first year when it earned more than $1 billion in sales, garnering over $25 million worth of profit. In 1999, Lowe’s finalized the purchase of Renton. A Washington-based Eagle Hardware & Garden company, acquiring Renton was a step in the right direction. The company soon expanded beyond the country. The first store in a foreign land was opened in Hamilton, Ontario, Canada. Today, the company is the second-largest hardware retail chain in the country.
Lowe’s website claims to be operating in 2.355 locations currently, which includes store locations in the United States, Canada, and Mexico. Lowe’s stores in Mexico closed in 2010. Success continued even if Lowe’s was overtaken by Home Depot to become the second-largest home improvement retail chain.
In 2006, Lowe’s was garnering $43 billion in sales and had over 1,250 stores across 49 states. As of 2020, taking the May–July yearly quarter sales, Lowe’s reported sales of over $27.3 billion. In addition, the company reported the digital sales of the same time period to have risen to up to 135%. This surge was largely owing to the Covid-19 pandemic as customers switched buying physically from stores to online.
Company Shareholders
Lowe’s Companies has institutional investors who are the owners of a significant proportion of the company’s stock. These institutions, if taken collectively, hold more than half the shares of the company, which gives them collective power over the company’s major business decisions but only if they collectively agree on something. Hedge funds do not own the company holdings.
The company’s largest shareholder is the Vanguard Group, Inc., which owns a percentage of the stock amounting to 8.6% of shares outstanding. The second-largest shareholder in the company stock is BlackRock, Inc., the owner of 7.6% of common stock. Finally, about 4.5% of the company is owned by State Street Global Advisors, Inc. It is worth noting that no shareholder has a majority interest, which demands that a portion of shareholders collectively influence the making of a major business decision.
Of all the company’s shareholders, 25 of the top shareholders of Lowe’s, when taken collectively concerning how much of the company stock they own, amount to less than half of the share register. Therefore, not a single individual shareholder has a majority interest. Some insiders are also owners of the company stock. However, the details available for the same are minimal and are not verifiable, but it is believed that the insiders at Lowe’s own less than 1% of the company stock. However, these shares are estimated to be valued at $77 million.
Along with institutional shareholders and insider shareholders, another section of company shareholders whose stake in the company stock cannot be ignored. The general public owns as much as 21% of the stake in Lowe’s company stock. Of course, this is not big enough to earn the general public majority interest. However, it is still enough that the general public can collectively sway company policies’ decisions with other shareholders.
In conclusion, Lowe’s is currently owned by a wide variety of shareholders and is continuing to grow, increasing the company’s value steadily. While it began as a family venture, its name is a testimony to the same. The company continued its success even after the company ownership passed from the hands of the Lowe family and now is one of the biggest companies in the world that cater to home improvement and hardware in the world.
