Making Moves

As Menards continues to expand its borders, including into two new states in the United States, the retailer is also to fine-tuning its locations within its already established Midwestern market.

Consider the Menards store in Hoffman Estates, Ill., which serves as an anchor tenant in a strip mall in that village. The retailer announced it would pull out of the location in November of this year, moving business just a mile outside the village’s limits, to Hanover Park, Ill., according to Hoffman Estates’ village manager Jim Norris.

The chess move came as a surprise to Hoffman Estates village officials, who were, in fact, in the market for a second home improvement retailer in the city. Officials had attended the global retailing conference of the International Council of Shopping Centers, with one of the primary goals of securing a second hardware store, Norris said. They came up dry in that regard and now, with the announcement from Menards, the village finds itself with the prospect of no local hardware store at all.

Jeff Abbott, a spokesman for Menards, expounded on the plans in the northern Illinois-Chicago suburbs area.

“We are opening a brand new Menards store in Hanover Park, Ill., in mid-November, 2008,” Abbott said in a statement.

“This new store will replace two smaller stores previously located in Hanover Park and Hoffman Estates, serving these communities plus Schaumburg, Streamwood and the surrounding area. Homeowners, tenants, business owners and contractors in the area will now have easier access to a full-line of building materials and supplies with the addition of this larger form at store in one central location. The new Hanover Park store is another example of our strong commitment to providing the best in home improvement goods and services plus shopping convenience in the Chicagoland market.”

IN SEARS’ BACK YARD

It’s notable that although Menards is moving out of Hoffman Estates, Ill., leaving the village without a hardware store in its borders, that’s not to say the village of Hoffman Estates isn’t served by DIY retailers. Hoffman Estates, Ill., is, of course, best known as the headquarters of Sears Holdings. The prominent national retailer does not have a store in the village of Hoffman Estates because, “logistically, it didn’t make sense,” said Kim Freely, a spokeswoman for Sears. Rather, “We have several locations within 10 miles of here,” she said, including one of the company’s largest stores in Schaumburg, Ill.

Hoffman Estates officials are still hoping for a smaller format hardware store, village manager Jim Norris said. “We think for our community of 55,000 and growing, that in our opinion, we have a need for a local hardware store. We’d like to see a place where residents can go to just pick up the few items they need for their homes, rather than driving to a regional big-box store.”

Menards, a privately held company, is generally tight lipped about its business plans.

“My impression is that their focus has been on the bigger format type stores, and I mean the incredibly large stores,” observed Fred Miller, president of home improvement research firm Consumer Specialists. “I don’t think they’ve fundamentally changed in all these years. They’re very aggressive merchants. They’re willing to try things. They don’t strike me as having a lot of bureaucracy involved, so they’re very flexible and able to try to new things.”

Miller noted that the Midwestern borders of Menards’ territory further isolate the retailer from the stern gaze of Wall Street. Menards is not a public company, and its competitors—Home Depot and Lowe’s—don’t of ten bring up the competition with Menards in investor meetings.

It’s not uncommon for Menards to out grow certain locations, such as in Hoffman Estates, and move to larger box prospects, such as in Hanover Park. What is becoming increasingly notable, however, is Menards’ pen chant for expanding its borders further east, further west and further south.

Wyoming, it seems, is the next state that will enter the Menards sphere. A 160,000-square-foot store, with adjacent lumberyard, is expected to open soon in the city. That Menards location represents an approximately $5 million investment, according to local news reports.

And Kansas, another state currently without a Menards location, is also on the retailer’s radar. A store is reportedly in the planning stages in Manhattan, Kan., a college town of about 52,000 people west of Topeka.

Menards entered Missouri only last year, with a location in St. Joseph., the furthest the retailer has ventured south so far. Another location is planned in Columbia, Mo.

On the northern frontier of its empire, the retailer announced plans for a 170,000-square-foot location in Virginia, Minn., north of Duluth. Duluth is the site of one of the retailer’s large-format stores, and south of that city, in St. Paul, Minn., is a massive 300,000-square-foot double decker behemoth.

Ohio has been the site of the retailer’s expansion east. New locations are under development in the Ohio cities of Mansfield, Massillon, Chillicothe and Sandusky. New stores have been opened recently in Tipp City and Toledo, Ohio.

The addition of Kansas and Wyoming would bring the retailer’s presence to a total of 13 states in the Midwest. Menards was No. 6 on the Home Channel News Top 500 Retail Scoreboard, with an estimated $8 billion in sales, up 3.2 percent from the previous year. The expansion in the Midwest will likely push the retailer beyond the 250-store mark in the coming year.