Market Overview

Why is Lowe's Selling a Competitor's Products?

Lowe's (NYSE: LOW) is a well known company that has assisted millions of Americans in pursuing personal projects and opportunities. However, it has maintained a fairly narrow business model, until now that is.

Zep Inc. (NYSE: ZEP) today announced that 50 Zep Commercial® products will soon be offered in 1,360 Lowe's stores across the United States and on Lowes.com. The additional line of Zep branded professional strength solutions will be available to Lowe's customers by March, 2012.

“We are very excited to make the broad range of Zep Commercial products – and the professional results they deliver – available to our customers through Lowe's,” said Joe Seladi, Group President, Amrep, Inc., a wholly owned subsidiary of Zep Inc. “This agreement reinforces our decade-long relationship with one of the leading home improvement retailers worldwide, and comes in direct response to customer demand for wider availability of our high-efficacy solutions. The Zep Commercial brand provides an ideal solution for Lowe's as they move to enhance their cleaning and maintenance chemical category.”

The Zep Commercial line provides professional strength cleaning and maintenance solutions to small businesses and to homeowners who want to clean like a professional. Zep Commercial products have won industry-wide recognition, including the Golden Hammer Award from Home Channel News magazine.

Lowe's will offer 50 items in the Zep Commercial line, including All Purpose Cleaner-Degreaser, Oxy Carpet and Upholstery Cleaner, Hardwood Floor Cleaner, and High Traffic Floor Cleaner. The products will begin appearing on shelves in time for spring cleaning season. Lowe's also carries Zep Inc.'s Enforcer® brand of insecticide, herbicide and rodenticide products.

Will Lowe's benefit significantly from its new partnership with Zep? Perhaps broadening its offerings is a new breathe of air that Lowe's needs to revitalize its business model. Lowe's is currently trading at about $26.90, up almost 6% for 2012.

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