It’s a well-known story of Atlanta business lore. Fired from California hardware chain Handy Dan, Bernie Marcus and Arthur Blank came to Atlanta to launch their own home improvement stores.
A supersized version. A sprawling warehouse with thousands of products, low prices, helpful staff — and bright orange everywhere.
But many might not be aware that a forgotten newspaper ad would tarnish Home Depot’s first day of business on June 22, 1979.
Marcus and Blank were squeezing by when they launched the first two stores, on Memorial Drive and Buford Highway, said journalist Chris Roush, who wrote the 1999 book “Inside Home Depot.”
The founders didn’t have enough money to fully stock the massive stores, so they used empty paint cans and boxes on the highest shelves. Nor could they afford a major television campaign to announce their grand opening.
So Home Depot placed a two-page ad in The Atlanta Journal and The Atlanta Constitution, set to run one day before on June 21.
But somehow the ad never published.
“It was a disaster! Because you’re not really open if nobody knows about it! There would be no customers come Friday morning because there was no ad Thursday,” Marcus and Blank wrote in their 1999 book, “Built from Scratch.” Marcus narrated this chapter, a Home Depot spokesperson said.
It was a wobbly start for an Atlanta company that now dominates the home improvement market. Home Depot today operates more than 2,300 stores and is closely watched as an economic indicator of the U.S. housing market and consumer spending.
Credit: AJC
Credit: AJC
Marcus called the newspaper, filled with despair about the missing ad.
“My voice was choked with emotion, a ferocious mix of anger and growing panic. I was watching our lives go down the drain. No sales, no cash flow. Payroll was already eating us alive. The clock was ticking with vendors who wanted to be paid,” Marcus wrote in the book.
He told the newspaper: “‘You killed us. We are trying to get this company off the ground and you single-handedly put us out of business,’” the book recalls.
Credit: source
Credit: source
The Atlanta Constitution and The Atlanta Journal would run the grand opening ad the same day the stores opened, on June 22.
And for weeks, the papers gave Home Depot prime advertising space to make up for the omission, according to the book.
“So out of something that was really bad, something really great arose,” Marcus wrote in the book.
Credit: source
Credit: source
But that first day of business was rough.
Marcus and Blank sent their kids and wives into the store parking lots, handing out dollar bills to lure customers. “But things were so bad without the newspaper ad that we literally couldn’t give the dollar bills away,” the book states.
Marcia Jaffe worked as sales manager at the paper at the time. She said in an interview she still trembles thinking about the error.
“They brought in all these people,” she said, referring to Home Depot. “They staffed up. Everybody was dressed in orange and ready to go. Lord, it was bad.”
Jaffe, who writes today for The Atlanta Jewish Times, said she covered Marcus for years after. He never forgot that advertising debacle, she said.
“He always looked at me and waved his finger and said, ‘You’re the one who left the ad out,’” Jaffe said, although she said she didn’t think it was her fault.
Credit: sou
Credit: sou
At the time, for startups like Home Depot, the daily newspaper was an essential marketing tool, said Roush, a former business journalist for The Atlanta Journal-Constitution who covered the company.
“Sales in the very beginning were not good,” he said. “People didn’t know Home Depot. People didn’t know the name. People didn’t know what the store was offering.”
In fact, the early ads would try to explain. For example, a 1980 ad in The Atlanta Constitution (when Home Depot opened its fourth store) described the “new warehouse style retailing.”
Credit: sou
Credit: sou
A turning point for Home Depot, Roush said, was when the company had huge sales of products such as garage door openers or ceiling fans for “really insane low prices.” That got people in the door, he said.
Home Depot would go public in 1981, and later that decade, surpassed rival Lowe’s as the largest home improvement retailer.
Home Depot today has a market cap of nearly $350 billion. The company plans to open 15 to 20 new stores per year, CEO and President Ted Decker said at a December investor meeting.
“When we first opened our doors in 1979, this company started with a dream and a focus on people,” Crystal Hanlon, Home Depot’s senior vice president of culture and values, said in a statement to The Atlanta Journal-Constitution. Hanlon started as a cashier in 1985.
“Our growth happened because, from the very beginning, our founders focused on taking care of our associates, listening to our customers and earning trust in the communities we serve,” Hanlon said. “People have always been at the heart of our business.”
Editor’s note: This story was updated to attribute portions of the 1999 book “Built from Scratch” to Bernie Marcus, who narrated a particular chapter.
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