Chains Find Sound Reasons To Grow -- Home Stores Plan To Counter Rival's Expansion

Two retailers of home-improvement products have major expansion plans in the Puget Sound area that answer a rival's strategy to put 10 to 12 stores in the region over the next four years.

Last week, Atlanta-based Home Depot said it will open a warehouse-style store in Tacoma next year, another in Seattle in 1993 and as many as 10 more scattered throughout the region by 1995.

This week, two rivals, HomeClub and Eagle Hardware & Garden, said they have big expansion plans of their own.

"One of us will probably do very well, one will do marginally well and one won't do well at all," predicted Dave Heerensperger, founder and president of Tukwila-based Eagle.

"We'll all be competitive on price, I'm sure," said Heerensperger. "The keys will be locations and service."

Eagle, which entered the Spokane market about a year ago, opened stores in Tukwila in August and Bremerton last week. A fourth store in Yakima is to open next week.

Heerensperger said a Bellevue store should open in May, and a Rainier Valley store, located where Sick's Stadium used to be, in June.

Additional store openings in Anchorage and Federal Way are slated for the latter half of 1992, Heerensperger said.

Meanwhile, California-based HomeClub plans to open three stores, in Silverdale, Lacey and Bellingham, in the first quarter of 1992. It already has four stores in the Seattle area - Lynnwood, Kent, Tacoma and Kirkland - and stores in Spokane.

HomeClub is developing the new stores itself, said company President Jim Halpin, because real estate developers are having a hard time attracting capital to do big projects.

"I'd rather not be in the real estate business," said Halpin, "but the money for this kind of development just isn't around. We'd have to wait too long, ifwe waited for developers."

Murray Wachtenheim, chief financial officer of HomeClub, said the company is buying flexibility and control by doing its own development.

Heerensperger agreed it is tougher to get financing for projects now. "Fortunately, I have some investors in the real estate business, and we're able to do our expansion."

All three chains are proponents of a new format in which the retailer puts virtually all inventory on the sales floor inside huge warehouse stores.

All three intend to employ more than 100 people at each store. The three chains will be fighting not only each other for customers but also building-products wholesalers and existing hardware chains such as Ernst Home Centers and Pay 'N Pak. Ernst and Pay 'N Pak typically operate stores one-third to one-half the size of warehouse stores.

Halpin said the intense interest in Seattle stems partly from this region's relative economic strength compared with the rest of the country.

Halpin said his stores' sales to building contractors are down this year, but sales to do-it-yourselfers, which make up about three-fourths of sales, are up. In all, he said, sales are up 9 percent to 11 percent this year compared with 1990.

"There's not as much competition here as in other parts of the country," Halpin said.

"Eventually, there could be a lot more, but who knows?"