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The Home Depot has added LG Electronics to its majap vendor matrix, and will begin selling a 15-piece assortment of LG-branded laundry pairs, refrigerators, dishwashers, air conditioners and microwave ovens late in the second quarter.
LG becomes Home Depot's third core white-goods supplier, joining GE and Maytag, which helped the retailer launch its appliance offering five years ago.
The deal represents a major coup for both companies, which are both relative newcomers to the domestic majap trade. LG, which brought its sleek, high-end white goods to the U.S. market in 2001, will gain a broad, high profile platform for its brand through Home Depot's more than 1,600 domestic warehouse stores and its recently expanded e-commerce Web site.
In turn, Home Depot, the nation's No. 1 home improvement chain and third largest majap dealer, will use the LG line to diversify its white goods offering and better differentiate itself from archrival Lowe's, which carries the Whirlpool, Electrolux and Bosch brands in addition to Maytag and GE.
Home Depot may also use the alliance to expand its presence in consumer electronics, having already dabbled in small Magnavox-branded LCD TVs.
Conversely, the strategic alignment could be perceived as a setback for fourth-place white-goods retailer Best Buy, which employed LG and Samsung appliances to help differentiate and resuscitate its flagging majap business. The line is also carried by such regional chains as H.H. Gregg and P.C. Richard & Son.
No. 1 majap dealer Sears, which is struggling to maintain its market share lead over both home improvement players, carries LG microwave ovens and a Kenmore-branded French door bottom mount refrigerator OEM'ed by the Korean manufacturer.
“The LG brand has experienced much success and growth in both market and mindshare in the past year in the home appliance category in the United States,” said Michael Ahn, president/CEO of LG Electronics U.S.A (LGEUSA). “In aligning with The Home Depot, we are taking our brand to the next level.”
John Costello, executive VP/merchandising and marketing for Home Depot, said the deal exemplifies the “significant investments in expanding our home appliance offering” that the company continues to make. That investment also included the addition of majaps to its e-commerce offering for the first time last month.
Besides its placement in Home Depot, LG has been making some changes of its own. The company used this month's International Builders' Show to announce its entry into the domestic dishwasher category (see story below), and Teddy Hwang succeeded Simon Kang as president of LGEUSA's digital appliances division, effective this month. Hwang, a 24-year veteran of the company, most recently headed the division's OEM operations in Chicago. Kang, having completed the company's typical three-year rotation, has been re-assigned to a new global position.
In a statement, Hwang said he plans to “continue to build the LG brand and further the momentum that our team has created over the past few years.”
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.