Mooresville, N.C. headquartered home improvement giant Lowe’s Companies Inc. has entered into a significant deal with a company known for its design and installation services, Artisan Design Group. This acquisition, worth $1.325 billion, is part of a broader effort by Lowe’s to expand its Pro offering into a new distribution channel, targeting a highly fragmented market. The deal was finalized on January 19, 2025.
ADG, formed in 2016 through a series of mergers and acquisitions, had approximately $1.8 billion in fiscal 2024 revenue. It serves over 3,200 specialized installers and provides services to major homebuilders and property managers, including flooring, cabinets, and countertops. Currently operating in 18 states, ADG has 132 facilities across multiple districts, including a headquarters in Dallas, Texas.
Marvin R. Ellison, Lowe’s chairman, president and CEO, commented, stating that the new Pro offering will expand the company’s addressable market by over $50 billion by 2033. The acquisition will allow Lowe’s to build on its existing momentum with Pro planned spend and is expected to enhance its growth by approximately $12.7 billion in the next ten years.
The acquisition aligns with Lowe’s strategy to enhance its Pro business, including the updated Pro Loyalty Program. As Lowe’s doubles down on these initiatives, it aims to double its Pro addressable market and increase store sales significantly.
In the Pro market, Lowe’s coincided with a growth in DIY and construction spending. Home improvement retailers are jumping due to interest from construction professionals at companies like Home Depot. However, challenges such as DIY construction takes time and concerns about rising mortgage rates are imposing pressure on customers.
In the fourth quarter, Lowe’s met Wall Street’s expectations with strong sales growth and a revised EPS, despite concerns amid rising interest rates. Home Depot, however, faced mixed results, with revenue increasing by 14.1% and higher EPS despite ongoing challenges.
Overall, the acquisition is bringing-down Pro volume in key regions, while other activities by Lowe’s and Home Depot are affecting expectations.
