Doug Marrelli

Manager - Lowe’s Global Sourcing

Global Purchasing – Local Retailing

Agenda

Global purchasing – Some things are different

overseas compared with the United States

Local (USA) – How different are things?

Lowe’s – Information

Lowe’s secret

Local retail customer is #1

Global Sourcing challenges

Changes – Then and Now

Q & A

Local USA

Some things at home that make you go hhhmmmmmm

Lowe’s Information

Lowe’s started in North Wilkesboro, NC in 1946

Over 40,000 skus stocked in an average Lowe’s store

Average over 14 Million shoppers per week Approximately 215,000 employees Over 1,550 stores open

(over 176 Million square feet of retail selling space)

Lowe’s Secret

Who makes most of the purchases for the

home?

Lowe’s 2007 Stats

$48.3 Billion Revenue Ranked #48 on Fortune 500 Opened store in Vermont – 50th state Became international retailer – opened

stores in Canada Opened 153 stores in 2007 (which equates to opening a new store

each and every 57 hours)

Lowe’s - near future

2008 – Plan to open another 120 stores

2009 - Plan to open retail stores in Mexico

Always looking for new opportunities

LG Sourcing, Inc.

Started in 1997

Wholly owned subsidiary of Lowe’sCompanies, Inc.

We have offices overseas staffed withLG Sourcing, Inc. employees

Just makes sense to buy direct from manufacturers, as we have continued to

grow

Lowe’s TEUs Per Year

0

50,000

100,000

150,000

200,000

250,000

2000 2001 2002 2003 2004 2005 2006 2007

TEU

Local Retail Customer is #1

Customers demand good valued product(what they want, when they want it)

More and more good value retail products are manufactured overseas

Need to understand what the local retailcustomer wants, find it overseas

Takes some digging

Global currency issues

1/01/07 1 Euro = us$1.325/20/08 1 Euro = us$1.57

Roughly 19% “increase”

1/01/07 1 RMB = us$0.125/20/08 1 RMB = us$0.14

Roughly 17% “increase”

We buy in us$, overseas vendors pay for raw materials in local currency

China – sourcing pressures

Exchange rates

Raw material costs

New Labor laws

VAT rebate changes

Other global sourcing options

Vietnam

Thailand

Malaysia

Cambodia

Etc.

Changes – Then and Now

Then Now

Burma Myanmar

Ceylon Sri Lanka

Dutch East Indies Indonesia

East Pakistan Bangladesh

Container shipping did not exist

Over $5.5 Billion worth of everyday goods

move in and out of US ports EACH DAY

Q & A

Thank you