Lowe’s buys well-known brand in a competitive bid to bolster profitability

Lowe’s, based in Mooresville, has carried Stainmaster products for more than a decade. Owning the brand means that Lowe’s now has control over how to price Stainmaster products and expand the label into other flooring categories.

Why it matters: The deal is a way for Lowe’s to grow its product lineup and bolster profitability. Private labels eliminate the national-brand middleman, meaning companies can keep a larger portion of the sales of the products. Furthermore, companies get to decide when to discount the private-label products.

• Private labels are normally cheaper than national brands.
• Think of Costco’s Kirkland brand. Belk has also expanded its private labels such as Crown & Ivy, as I have reported.

“With this acquisition we’re bringing this high-performance brand that’s so known and trusted by our customers into our portfolio,” Sarah Dodd, SVP of global merchandising, tells Axios. Lowe’s has a number of other private labels in its portfolio, including Allen + Roth home decor and Kobalt tools.

Lowe’s also says the deal is a step toward delivering its “total home” strategy. The idea, which the company introduced at an investor update in December, is to make Lowe’s the go-to source for all home-improvement needs. This is part of the broader strategy Lowe’s has to take market share from its main competitor: Home Depot.

“Private brands will be an integral part of our total home strategy,” Dodd says.

• Also part of that strategy is improving offerings for professional customers like contractors. Lowe’s recently announced plans to add “pro zones” to its stores and stock them full of products that pros like.

Details: Lowe’s said in a statement it is getting all brand-related intellectual property from Stainmaster’s parent company, Invista, plus all of its trademarks and sub-brands. Dodd declined to share how much Lowe’s paid for the brand.

Additionally, a number of Stainmaster employees “will be joining the Lowe’s family,” as part of the deal, Dodd says.