Lowe's 2014 Annual Report Download - page 13

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We are committed to offering a wide selection of national brand-name merchandise complemented by our selection of private
brands. In addition, we are dedicated to ensuring the products we sell are sourced in a socially responsible, efficient, and cost
effective manner.
National Brand-Name Merchandise
In many product categories, customers look for a familiar and trusted national brand to instill confidence in their
purchase. Each Lowe’s home improvement store carries a wide selection of national brand-name merchandise such as
Whirlpool®appliances and water heaters, GE®, LG®, and Samsung®appliances, Stainmaster®carpets, Valspar®paints and
stains, Pella®windows and doors, Sylvania®light bulbs, Dewalt®power tools, Owens Corning®roofing, Johns Manville®
insulation, James Hardie®fiber cement siding, Husqvarna®outdoor power equipment, Werner®ladders, and many more. In
2014, we added brand name merchandise such as Henry®coatings, Hubbell®wiring devices, GRK Fasteners™, and Progress®
Lighting to our portfolio. Our merchandise selection provides the retail and Pro customer a one-stop shop for a wide variety of
national brand-name merchandise needed to complete home improvement, repair, maintenance, or construction projects.
Private Brands
Private brands are an important element of our overall portfolio, helping to provide significant value and coordinated style
across core categories. We sell private brands in several product categories including Tools & Hardware, Seasonal Living,
Home Fashions, Storage & Cleaning, Paint, Fashion Fixtures, Flooring, Millwork, Rough Plumbing & Electrical, and Lumber
& Building Materials. Some of Lowe’s most important private brands include Kobalt®tools, allen+roth®home décor products,
Blue Hawk®home improvement products, Project Source®basic value products, Portfolio®lighting products, Garden
Treasures®lawn and patio products, Utilitech®electrical and utility products, Reliabilt®doors and windows, Aquasource®
faucets, sinks and toilets, Harbor Breeze®ceiling fans, Top Choice®lumber products and Iris®home automation and
management products.
Supply Chain
We source our products from over 7,000 vendors worldwide with no single vendor accounting for more than 6% of total
purchases. We believe that alternative and competitive suppliers are available for virtually all of our products. Whenever
possible, we purchase directly from manufacturers to provide savings for customers and improve our gross margin.
To efficiently move product from our vendors to our stores and maintain in-stock levels, we own and operate 15 highly-
automated Regional Distribution Centers (RDC) in the United States. Through our RDCs, products are received from vendors,
stored and picked, or cross-docked, and then shipped to our retail locations or directly to customers. On average, each
domestic RDC serves approximately 115 stores. We also lease and operate a distribution facility to serve our Canadian stores.
Additionally, we have a service agreement with a third party logistics provider to manage a distribution facility to serve our
stores in Mexico.
In addition to the RDCs, we also operate coastal holding facilities, transload facilities, and flatbed distribution centers. The
flatbed distribution centers distribute merchandise that requires special handling due to size or type of packaging such as
lumber, boards, panel products, pipe, siding, ladders, and building materials. Collectively, our facilities enable our import and
e-commerce, as well as parcel post eligible products, to get to their destination as efficiently as possible. Most parcel post
items can be ordered by a customer and delivered within two business days at standard shipping rates.
On average, in fiscal 2014, approximately 80% of the total dollar amount of stock merchandise we purchased was shipped
through our distribution network, while the remaining portion was shipped directly to our stores from vendors.
Our Services
Installed Sales
We offer installation services through independent contractors in many of our product categories, with Flooring, Millwork and
Kitchens & Appliances accounting for the majority of installed sales. Our Installed Sales model, which separates selling and
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