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360 VIEW Menards enards is a big-box enigma in the U.S. What We’ll Cover home improvement industry. Older than Home Depot and smaller M than both Home Depot and Lowe’s, 154 The History of Menards the Wisconsin company has stayed quietly regional and privately owned for more than 50 years and counting. At the same time, the bold lettering on 156 Who Is John Menard? Menards-sponsored race cars, the iconic “Save Big Money” jingle, and the founder’s reputation are not quiet. Founder John Menard cannot avoid public 158 A Snapshot of Menards scrutiny, as he lands on Forbes’ annual list of American billionaires year after year and appears at NASCAR races to watch his race car driver son, Paul. But, as a private company, the third-largest home 160 Menards in Recent Years improvement retailer in the U.S. does not release financial information, unlike its publicly traded competitors and independent cooperatives such as 164 SWOT Analysis Ace Hardware and True Value. In addition, Menards’ leadership has mostly avoided requests for media interviews and closely controls 166 The Financials information the company releases. Hardware Retailing has been among the media outlets that have contacted the company for more information without receiving a response. 168 Menards on Its Home Turf A comprehensive look at how Menards operates is difficult to get, and people who haven’t worked in executive roles within the company know little about it. 169 Menards’ Market Because few public documents are available and and Opportunities Menards did not provide interviews, Hardware Retailing writers compiled information from existing research and approached retail industry observers for added insight. The information in this 360-degree overview was gathered On the following pages, you will find the results of by Hardware Retailing staff from a variety of resources that their work in a 360-degree look at the company. are attributed throughout. 152 HARDWARE RETAILING | May 20120188 May 2018 | HARDWARE RETAILING 153 360 The History of Menards The year 1962 was a busy one in American products worldwide. Target became a national industry in 1958.7 As more machinery was An early experimentation for the retailer was retail. That year, entrepreneur Sam Walton opened company known for its trendy products and introduced into dairy farming, he recognized using an efficient delivery system to supply the first Walmart store in Rogers, Arkansas;1 in strategic business partnerships with fashion a need for low-cost agricultural buildings to its stores. Menards was the first DIY home Minneapolis, the first Target retail store opened;2 designers and companies such as Starbucks. house livestock and equipment.7 Within a improvement company to use the “hub-and-spoke” and John Menard incorporated Menards as a Both general merchandise retailers went on to year, Menard’s pole building construction system, with all deliveries originating from the Wisconsin company.3 become public companies with stockholders business was already gaining a reputation in company’s distribution facility in Eau Claire.4 Walmart would grow its discount model around the world. Eau Claire, Wisconsin, where Menards’ corporate Home Depot and Lowe’s would later adopt astronomically and permanently transform Throughout the nearly 50-year boom of discount headquarters is now located.7 similar distribution strategies, and a Forbes the way businesses buy, sell and transport retailers and home improvement competitors, As consumers started requesting lumber and analyst speculates that the companies were Menard kept his business closer to the vest. He building materials, Menard entered into the inspired by Menards to implement similar maintained controlling ownership, and as a result, building materials business, calling his retail outlet methods in their businesses. kept the independence of growing and experimenting Menard Cashway Lumber and opening the first Menards supplied all of its stores from its with retail concepts in relative privacy.4 retail location in 1964.4 distribution center in Eau Claire until 1998, when a In the home improvement sector, Lowe’s Cos. The company expanded into manufacturing more second center opened in Plano, Illinois, according to had been steadily growing in the Southeast for substantial building materials on-site, opening a truss the company. Menards now operates 11 distribution nearly two decades when Menards incorporated. plant in the late 1960s.7 The truss plant eventually centers in eight states, including two in Wisconsin Lowe’s opened for business in 1946 and, developed into the Menard Building Division and and three in Iowa.7 just one year prior to Menards’ incorporation, manufactured steel siding and roofing, interior and went public in 1961.5 Home Depot entered the exterior doors, decking and treated lumber and 1 corporate.walmart.com 7 home improvement marketplace with two stores other materials. Menards sold the Menard Building 2 corporate.target.com in 1979 and went public in 1981.6 Division in 1994, ending more than 30 years in the 3 Office of the Wisconsin Secretary of State 4 Menards was born out of a growing local pole building business.7 Forbes (multiple articles) 5 Lowes.com demand for pole buildings. Menard began his During that same period, the company operated 6 corporate.homedepot.com business to serve the rapidly changing farm 78 Menards stores.4 7 Menards.com Timeline: From 1958 to the Present 1958 1962 1963 1964 1969 1990s 2000s 2016 In the Beginning Big-Box Boom Business Acumen Retail Outlet New Ventures Growth and Change The Big Time Labor Trouble John Menard starts Menard incorporates3 the Menard graduates The first Menards Menards launches its Menards doubles Menards opens several The National Labor a business constructing company in Eau Claire the from the University of retail location, called truss plant, which became its store count throughout large-format stores, each Review Board rules pole buildings in same year Walmart1 and Wisconsin-Eau Claire Menard Cashway Lumber Menards Building Division this period. The company at more than 200,000 Menards violated federal his hometown of Target2 open their first with a degree in at the time, and manufactured building sells Menards Building square feet, throughout law, its second violation Eau Claire, Wisconsin. retail stores. business administration.8 opens in Eau Claire. materials, such as siding. Division in 1994. the Midwest.10 in as many years.9 The source for the timeline entries is Menards.com, unless noted otherwise. 8 University of Wisconsin-Eau Claire Alumni Association 9 Milwaukee Journal Sentinel 10 Time magazine, March 19, 2013 154 HARDWARE RETAILING | May 2018 May 2018 | HARDWARE RETAILING 155 360 Who Is John Menard? The story of Menards is incomplete without a short including groceries, diapers and toys, alongside biography of founder John Menard, who not only traditional home improvement departments such as built the company, but has also directed its course electrical supplies and lumber and building materials. for decades. Menard stands out as eclectic, with a Born in 1940, Menard was the oldest of eight penny-pinching approach to business but a famous, children and “learned the value of hard work and expensive interest in car racing.11 In addition, frugality” while doing chores on his parents’ dairy he has provided material for tabloid-style writing farm in Wisconsin, Mary Van de Kamp Nohl writes due to friendships and fallings out with other in Milwaukee Magazine. billionaires, including President Donald Trump.12 In the 1950s, Menard was a young man working to In a 2013 article, Forbes reports that Menard told pay for college in Eau Claire who saw an opportunity the magazine he no longer runs his retail chain. for entrepreneurship.7 However, “insiders say he still oversees the smallest Menard set out to start his own business when he details, from the material for store parking lots to left his high school job to construct pole buildings. His answering company mail,” Forbes says. customers asked to buy building materials,so he went Perhaps confirming active involvement in the into retail, opening the precursor to today’s Menards company, Menard made a public appearance with stores, Menard Cashway Lumber.11 car dealer Tom Kelley in March to announce a In business, Menard is detail-oriented, thrifty business partnership that would include expanding and an opportunist, similar to many retail two Menards stores in Indiana.13 entrepreneurs who built large companies in the Regardless of how active he is in the company 20th century.11 Like Sam Walton, who founded currently, Menard, at nearly 80 years old, is the Walmart, Menard has been carefully frugal, wealthiest Wisconsin resident and one of the richest opting for a lowest-price-possible retail model people in the U.S.4 and negotiating heavily with vendors to slash product costs.11 11 Milwaukee Magazine, April 30, 2007 Also like Walton, he is willing to try 12 Indianapolis Monthly, Indianapolis Business Journal selling a broad array of products in his stores, 13 The Journal Gazette, March 7, 2018, Fort Wayne, Indiana University of Wisconsin-Eau Claire 156 HARDWARE RETAILING | May 2018 360 A Snapshot of Menards At the end of 2017, Menards operated Menards’ first major 306 stores in 14 states. Iowa radio station piece of equipment was owner Bob Holtan a 1946 Chevy truck. wrote the lyrics to Menards’ “ Save Big Money” 45,000+ Store Employees in the U.S. John Menard’s son, Paul, earned $3.25 per hour at about age 10 stapling papers in jingle in the 1970s. Menards’ accounts receivable department. Sources: Menards and Menards.com Source: Menards.com Source: USA Today, Sept. 14, 2015 Source: City Pages, Jan. 13, 2015, Minneapolis Menards has sponsored NASCAR Unlike primary competitors Home Depot teams and drivers, including and Lowe’s, Menards has been a private John Menard’s son Paul, since company since its inception.