Here’s what happened: EGO, a very popular brand of cordless outdoor power tools, has gone from being a Home Depot exclusive to a Lowe’s exclusive. You can still find EGO tools at some other retailers, but not to the same extent that we’re talking about here.
On July 21st, 2020, Home Depot announced to their investors that they were accelerating investments in outdoor power categories and that this would involve a refinement of top brands. Home Depot will be performing a merchandise reset of their outdoor power equipment selection.
As part of all this, according to the news release, Home Depot would be discontinuing the EGO line of outdoor power equipment. You can read more about this here.
On July 22nd, 2020, Lowe’s announced their new exclusive partnership with EGO, and that they will be the exclusive nationwide home center to offer EGO’s popular battery-powered outdoor power tools.
There are a lot of reader comments to both posts, and in those replies there are a lot of guesses as to what happened to prompt these changes..
WHY this big change? Frankly, I don’t expect to learn the answer to this, as details behind exclusivity arrangements are rarely made public. I could of course ask our press contacts for insights, but with near-zero expectations that I would actually learn anything substantial.
I have learned industry secrets here and there over the years, and I would think my discretion is partially responsible for that. It’s a moot point though, because these partnerships involve too high-level decisions and discussions for us to ever learn details about.
I could only guess as to how this could have come to be. What’s frustrating is that my best guesses all seem plausible.
Was it Home Depot’s Initiative?
Here are Home Depot’s core-focus cordless power tools brands:
Of these brands, Dewalt, Makita, Milwaukee, and Ryobi all have a strong presence in the cordless outdoor power tool industry. They all have competitive offerings, and broad selection.
EGO certainly had a place in Home Depot’s cordless outdoor power tools category, and a sizable presence at that, and the fact is that their exclusivity at Home Depot contributed to their growth and success over the years, coupled with their innovative designs, constant improvements, great performance, and excellent quality.
EGO and Home Depot were great partner together, or so it seemed, and I am sure it worked out well to both companies’ benefits.
But what if Home Depot did want to give greater shelf space to some of the brands that make up the bulk of their cordless power tools department?
It is possible that Home Depot pushed EGO out to reset their cordless outdoor power equipment category.
What About Home Depot’s Investor News Release?
However, Home Depot “resetting” their outdoor power tool category indicates what will happen and not necessarily what led up to this. Did they part with EGO, or did EGO part with them? Does this matter with respect to the investor news release? No, and so it’s understandable and even expected for the messaging to be ambiguous about this.
Regardless of the how and why, EGO leaving Home Depot and going to Lowe’s leaves a hole in Home Depot’s selection, but also one they are highly capable of filling.
Home Depot’s release is titled: The Home Depot Accelerates Investments in Outdoor Power Categories, Refines Assortment of Top Brands. EGO is mentioned once:
As part of this merchandise reset, the company has made the decision to discontinue the Ego line of outdoor power equipment.
This language does suggest that Home Depot was the deciding party, pushing EGO out and into Lowe’s arms, but in no way confirms it. It is entirely possible that EGO informed Home Depot that they would not be renewing their exclusivity arrangement and that they have instead signed a deal with Lowe’s, leading Home Depot to discontinue the line a few months before the arrangement was set to end.
With Home Depot and Lowe’s being each other’s biggest competitors, details beyond what was announced so far are unlikely to become public.
Whether EGO left Home Depot, or Home Depot changed the relationship on their side, would Home Depot’s announcement have been any different? Probably not.
Was it Lowe’s Move?
It could be possible that Lowe’s lured EGO away from Home Depot, offering a more favorable deal and promising greater benefits.
Many of Lowe’s Kobalt cordless power tools are made by Chervon, EGO’s parent company, and so they enjoy a strong relationship in that regard. Lowe’s could want to boost their cordless lawn & garden tools selection, and bringing EGO over will certainly do that.
Consider Home Depot’s relationship with the aforementioned cordless power tool brands. Have you seen how dominant Milwaukee Tool has become in Home Depot’s cordless power tools, hand tools, power tool accessories, and safety product categories? They have a huge presence of Ridgid and Ryobi tools and accessories, with these being house brands both managed by TTI North America. Dewalt and Makita are also very visible at Home Depot, with Dewalt in cordless power tool, hand tool, storage, accessory, and clamping tool sections, among others. Diablo is strongly represented in Home Depot’s power tool accessories section. In case you have forgotten, Home Depot has an exclusive partnership with Stanley and FatMax. They also seem to have an exclusive presence of Empire Level too, with perhaps more products on the shelf now that the brand is owned by Milwaukee.
Over at Lowe’s, they have a very strong relationship with Stanley Black & Decker, especially since Lowe’s stores underwent a reset to heavily feature Craftsman tools. Dewalt, Irwin, and Lenox are also owned by Stanley Black & Decker, with these brands being prominent in Lowe’s tool department. You will find some Dewalt tools exclusive to Home Depot and others (such as Xtreme SubCompact) exclusive to Lowe’s.
But, from what I have seen, Lowe’s does not seem to have as many powerful relationships as Home Depot. Stanley Black & Decker’s Craftsman and Dewalt brands are certainly emphasized offerings at Lowe’s, but Lowe’s doesn’t seem as tightly bound to some of their other brands. For example, it does not appear that Lowe’s features Bosch and Metabo HPT cordless power tool offerings with the same energy as Home Depot does Milwaukee and Makita.
Bringing EGO to Lowe’s stores will be a big boost in itself, but I can’t help but wonder what benefits there might in addition to this.
Like EGO, Skil is a Chervon tool brand, and one that was acquired from Bosch a few years ago. Since then, Chervon has been working to revamp the brand. Did you notice that Lowe’s also announced that they will be offering a selection of Skil cordless power tools? This new arrangement is not just about EGO.
A reader emailed in today, sharing their observation that you can no longer purchase Skilsaw tools from Home Depot. Skilsaw is a pro-oriented arm of the Skil brand.
In my opinion, Skil could definitely benefit from a stronger retail presence, and so I could very well imagine Lowe’s pitching a powerful proposal to Chervon, perhaps one where they express interest in heavily featuring and promoting Skil’s cordless offerings during high-sales volume seasons.
Keep in mind that Lowe’s is EGO’s customer, as well as Skil’s customer. Chervon, the OEM for many Kobalt cordless power tools (I say many because a different brand might be making their 80V Max tools) has an existing relationship.
Does Skil exclusivity sweeten the deal, or does it play a big part?
What I’m trying to say is that Lowe’s could have won EGO over from Home Depot with a multi-faceted deal that would bolster their relationship. Lowe’s can benefit from broadening their cordless power tool and outdoor power tool brand and product selections, and Chervon could benefit from the opportunity to do this.
Chervon and Lowe’s already have an OEM relationship for Kobalt’s 24V Max cordless power tools. This new partnership with EGO would have led to a bigger relationship by itself, but adding Skil and maybe also Skilsaw into the mix makes for an enormous deal.
Was it EGO’s Move?
It is also possible for EGO to have said “hey Lowe’s, buddy, we’re thinking of leaving Home Depot – have you got an advantageous place for us?”
The last time I was at Lowe’s, with respect to cordless power tools, they had select Bosch and Metabo HPT offerings, strong showings of Kobalt and Dewalt tools, and emphasized focus on Craftsman tools. There’s room for another brand in there, and there’s room for a premier cordless outdoor power tools to make Lowe’s a bigger power tool and cordless outdoor power tool destination for shoppers.
Chervon has been expanding their still relatively new lines of Skil cordless power tools. Not to digress, but theirs are very good offerings and I am quite impressed with what they have done in a short amount of time. Then again, Chervon is a very experienced cordless power tools company and so this should not have come as a surprise.
However, their business is almost certainly down. When Sears sold the Craftsman brand to Stanley Black & Decker, and when they started closing down stores and losing online shoppers, that must have hurt Chervon quite a bit. The near-demise of a customer the size of Sears – and I’m specifically talking about Sears from a few years ago – would not have been insignificant.
International Tool went bankrupt, and in the proceedings it was said that “Sears was one of the Debtor’s most significant customers.”
Who is a significant customer of Chervon’s Skil brand of cordless power tools?
Skil looks to be enjoying strong sales at Amazon, but is Amazon a strong enough partner through which Skil could become a strong competitor against the other name brands they seek to match or best? Will Amazon help Skil gain appreciable market share?
EGO is a very well-known brand of cordless outdoor power tools. Will Skil become as well-known if they simply continue on their current path?
Chervon could have approached Lowe’s, saying something like: “Hey Lowe’s, have you seen how well our Skil brand has been selling at [Amazon and possibly other retailers]? We’d like to gain more market share. We would like Skil to be a Lowe’s retail exclusive, and we know how much you’ve been eyeing EGO – we’ll give you exclusivity there too.”
EGO is well-known and quite popular, and with strong brand loyalty where many customers will follow the brand to Lowe’s.
Starting with a selection of tools, Skil will now have a retail foothold. And, it’s not just Skil 12V and 20V cordless platforms, but also Skil’s 40V outdoor power tools lineup. This makes for a very mutually-beneficial deal. EGO is established and can bring customers to Lowe’s, and Skil is a burgeoning brand that can benefit from exposure to Lowe’s customers.
Home Depot has no room for Skil in either their cordless power tool or outdoor power tool departments. While Lowe’s has their existing partnerships, I could see this deal as being something they were sold on.
With Skil 12V, 20V, and 40V Max cordless power tools and outdoor power tools at Lowe’s stores, and EGO cordless outdoor power tools, and maybe Skilsaw tools as well, Lowe’s will be a much bigger customer to Chervon than previously. Let’s also not forget about Chervon and Lowe’s existing relationship involving Kobalt 24V Max cordless power tools.
Things could have played out much simpler. Perhaps EGO’s exclusivity arrangement with Home Depot was up for renewal and they asked both Home Depot and Lowe’s for proposals. Lowe’s presented a better deal and EGO signed with them, with Skil part of Lowe’s pitch.
Who Cares Anyway?
Some of you might be wondering who cares, why’d you make me read all that? Well, hopefully if you made it this far you found the topic as interesting to explore as I have.
We know what happened, or at least the outcome – EGO tools will be sold at Lowe’s instead of Home Depot.
This is big news by itself, but there’s also a lot more under the surface of this new deal.
We don’t know what led to this, the why, and that’s an important part in understanding the tool industry and the actions of retail titans. Home Depot and Lowe’s are very influential, as are other retail chains of their size. Knowing the why behind brand partnerships can help us understand how brand offerings might change over the years.
Tool brands’ presence and selection at Home Depot and Lowe’s have changed quite a bit over the 10+ years that I’ve been mindfully watching. Understanding what led to this recent partnership transition, and even if that just means exploring possible explanations, could play a part in tracking how it potentially influences future changes.
Which Scenario is Most Likely?
EGO was a strong seller for Home Depot. But, which party stood to benefit most from continuing their former exclusivity arrangement, and which would benefit most from discontinuing it?
Will Home Depot enjoy greater sales by moving EGO out and replacing their offerings with ones from their other cordless power tool brands? If so, which brands will we see gain greater presence – perhaps Ryobi? Which brand(s) would have been customers’ typical alternate choices if they didn’t go with EGO models at Home Depot?
It’s possible Home Depot is resetting their brand selection, but the question is whether it was their initiative to do so, or if it is in response to EGO leaving.
If you ask me, I think there is a greater probability that either Lowe’s offered Chervon an attractive package deal for an exclusivity arrangement, or that Chervon pitched a deal to Lowe’s.
With EGO as successful as they’ve been, would Home Depot have voluntarily dropped the brand from their lineup?
The brief mention of Skil being a part of things – this very strongly suggests a stronger relationship between Lowe’s and Chervon. If Home Depot decided to part with EGO, and Chervon was shopping for a new exclusivity arrangement, why would Skil be introduced into the mix at all?
In my opinion, it comes down to Lowe’s adamantly wanting EGO, or Chervon wanting Skil at Lowe’s. Maybe there’s a combination of factors, or there could be an entirely different decision path that I am unable to conceive given limited public details.
This might not have any consequence on the Kobalt brand, but it could. If the arrangement goes beyond EGO to also include Skil, why wouldn’t it also have some tie-in to Lowe’s OEM relationship with Chervon?
Let’s Hear Your Theories
Some of you chimed in about other possibilities, and I’m hoping you could elaborate on them. The most interesting theory I’ve seen so far is that this move is somehow connected to Craftsman’s outdoor power tool offerings.
What are your thoughts or theories about this new change in partnerships?