For a $5.1 billion-a-year company, HD Supply has been a little obscure, but that may be changing.
So far this year, the Atlanta-based company – spun off from Home Depot – has plopped down $380 million to buy Hartford-based A.H. Harris, moved into a brand new $100 million headquarters that overlooks I-75, and is looking to add hundreds of employees.
The company's previous headquarters was about a half mile down the street and only half the size of the new digs. The new HQ has more room and a lot more visibility, said Joseph DeAngelo, company chairman and chief executive, during an interview with The Atlanta Journal-Constitution.
Credit: Reann Huber
Credit: Reann Huber
Tens of thousands of drivers passing by below will get a look at the company logo – which can be lit in a variety of colors. Inside too, the building’s design – with its weight room, personal trainer, catered café and dozens of wirelessly connected conference rooms – is meant as a message, he said.
“The statement for this building has to be ‘Play with HD Supply. We’re winners,’ ” DeAngelo said. “We are growing and we earn that growth.”
Yet the company's profile is a lot lower than its one-time parent, $100 billion-a-year Home Depot, whose orange logo and name is one of the nation's best-known. But HD Supply is not a consumer brand and consumers won't see its name emblazoned on packages or boxes.
But it does have about 500,000 customers. It has two businesses, in one, it sells products and services to owners and managers of multifamily, hospitality, healthcare and institutional facilities. In the other, it sells to construction and industrial contractors.
HD Supply is a national business, which means it has a string of distribution centers, including eight in metro Atlanta, a dozen statewide and a total of 44.
The company was sold by Home Depot to several deep-pocketed private equity firms in 2007. Six years later, the company went public.
When it first separated from Home Depot, HD Supply was competing in 12 different businesses. It has gradually pared that down to two, but it's the leader in both.
"If you are not number one, there's a reason," DeAngelo said. "My job is to allocate resources."
HD Supply Construction and Industrial sells to contractors and has $3 billion of a $20 billion market. HD Supply Facilities Maintenance sells products and provides services to big institutions, competes in a $50 billion market. Although the company is the leader, it has less than 10 percent of the total market.
“We have an endless runway,” DeAngelo said. “Three billion out of fifty billion? I’ve got plenty of room to run.”
One way to grow is to acquire companies that are complementary – also in the same business, but not in direct competition. The latest, largest example was the purchase of A.H. Harris, which has work through the northeast, including a recent high-profile construction at LaGuardia Airport in New York City.
Credit: Reann Huber
Credit: Reann Huber
The facilities maintenance market is only growing 1 percent a year. The construction and industrial market is growing about 4 percent a year. But DeAngelo said the company needs to do more than maintain its market share.
Thus far, the company has lived up to that, he said. “We want to guarantee strong, double-digit returns to our investors. “We always out-grew our markets, and we always outgrew our markets profitably.”
DeAngelo, who has a treadmill in his corner office, talks a lot about fitness and health, about making sure employees take care of themselves.
“If you feel great, you’ll do great work,” he said.
But when it comes to performance, there is not a lot of subjectivity, he said. “I think you can measure everything. The biggest thing you can measure is, are you out-growing your competitors?”
HD Supply has 11,000 employees overall, 1,200 of them in Atlanta. The company’s main competitors right now are Grainger, Ferguson, Wesco and Fastenal. But Amazon’s tentacles have increasingly reached into HD Supply’s lane by offering supplies to contractors.
Most Atlanta-area business leaders praise the idea of an Amazon arrival — at least publicly. But when it comes to the possibility of Amazon choosing Atlanta for its second headquarters, DeAngelo talks less like a civic cheerleader and more like a competitor.
“Bring them on,” he said.
HD Supply's new $100 million HQ:
— 225,600 square feet
— 85 wirelessly linked collobaration spaces
— 8 stories of offices
— 6 stories of parking
— 1 fitness room with weights and cardio machines
— 2 locker rooms (male and female)
— restaurant with coffee bar
— 6 electric-vehicle charging stations
— 6,500-square-foot event space, capacity 500
Source: HD Supply
