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 – 50 th 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  Plan to open retail stores in Mexico  Always looking for new opportunities

LG Sourcing, Inc.  Started in 1997  Wholly owned subsidiary of Lowe’s Companies, Inc.  We have offices overseas staffed with LG Sourcing, Inc. employees  Just makes sense to buy direct from manufacturers, as we have continued to grow

Lowe’s TEUs Per Year

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 retail customer wants, find it overseas  Takes some digging

Global currency issues 1/01/07 1 Euro = us$1.32 5/20/08 1 Euro = us$1.57 Roughly 19% “increase” 1/01/07 1 RMB = us$0.12 5/20/08 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 ThenNow BurmaMyanmar CeylonSri Lanka Dutch East IndiesIndonesia East PakistanBangladesh 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