Dive Brief:
- Lowe’s has agreed to acquire Artisan Design Group for $1.3 billion, the home improvement retailer announced Monday. ADG provides interior design, distribution and installation services for interior surface finishes including flooring, cabinets and countertops.
- The retailer will purchase Artisan Design Group with cash on hand. The deal is expected to close in the second quarter of this year, pending regulatory approval and other customary closing conditions.
- The acquisition will expand Lowe’s pro services, the retailer said.
Dive Insight:
Lowe’s aims to leverage Artisan Design Group’s network as America’s need for homes continues to grow. ADG generated $1.8 billion in revenue in fiscal year 2024 and has a network of more than 3,200 installers, single-family and multi-family builders and property managers.
“With more than 18 million homes needed in the United States by 2033, we expect new home construction will be a major driver of Pro planned spend for the next decade,” Marvin Ellison, Lowe's CEO, said in a statement. “The acquisition of ADG allows us to build on our momentum with Pro planned spend and is expected to expand our total addressable market by approximately $50 billion.”
The Artisan Design Group deal is part of Lowe’s overall strategy to target professional customers. Last year, the company laid out a plan to capture more pro spending and grow the segment. That included expanding jobsite delivery for large orders.
“We’re building on our momentum with pros now that we’ve reached 30% pro penetration,” Ellison said at the time.
In February, the company simplified its loyalty program so that small and mid-sized contractors could earn loyalty incentives easily through the MyLowe’s Pro Rewards program.
“We’re gaining momentum with our pro customer through a flywheel effect that we created with a transformed pro offering with the right brands and products, greater inventory depth, improved jobsite delivery, dedicated service levels, and a best-in-class digital experience,” Ellison said on the company’s fourth-quarter earnings call with analysts.
In Q4, the company reported nearly flat net sales year over year at $18.6 billion, and comp sales saw a slight bump of 0.2%, driven by high-single-digit pro and online comps, holiday performance and hurricane rebuilding efforts. Full-year net sales dipped 3% year over year to $83.7 billion and net income declined around 10% to $7 billion.
