Wednesday, February 3, 1999

Hardware store
wars: Eagle eyes
Middle St. site

The proposed store would be
near City Mill and the soon-to-be
opened Home Depot

By Peter Wagner


Watch out Home Depot and City Mill.

Eagle Hardware & Garden Inc. is negotiating to buy an eight-acre parcel on Middle Street, not far from the 145,000-square-foot Home Depot store to open this year in Iwilei and from longtime isle retailer City Mill's largest store.

Landowner Yee Hop Realty yesterday confirmed it is close to a deal with Renton, Wash.-based Eagle on property at 611 Middle St. The site, adjacent to the city's bus maintenance facility, is occupied by about 20 small businesses in old warehouses.

"Eagle has been doing a lot of ground work, environmental studies and the like," said Mike Chun, president of Yee Hop. "They're pretty deep in it, but nothing has been signed."

Chun said he expects to close the deal within the next several days.

Eagle yesterday would not confirm the location, saying only it is looking at property on Oahu to build a second store.

The site totals about 11 acres but Chun said Eagle is considering about eight acres of the property.

While no formal notices have been given to tenants, some are already looking for a new home.

"We're starting to look around," said Sterling Kaya, vice president and manager of Hana Paa Hawaii. "We know we're going to have to move."

Eagle has a 150,000-square-foot store at Waikele on Oahu and a 120,000-square-foot store at the Maui Marketplace on Maui.

In a deal announced in November, the 32-store chain is to be bought by North Wilkesboro, N.C.-based Lowe's Companies Inc. in a $1 billion stock swap. Lowe's is the second-largest, do-it-yourself warehouse chain behind Atlanta-based Home Depot Inc.

Home Depot, meanwhile, recently began hiring 170 employees for its Ala Kawa Street store, expected to open in fall near Dole Cannery.

The Home Depot store will be about a block away from City Mill's flagship 60,000-square-feet store on Nimitz Highway. The retailer, which celebrates its centennial this year, has seven stores in Hawaii.

City Mill gearing up for fight

Star-Bulletin staff

It may be tough to celebrate 100 years in business with a stale economy and two big mainland competitors breathing down your neck.

But City Mill, a mainstay in the Honolulu hardware business since 1899, isn't about to buckle.

"We're not just sitting around," said Steven Ai, company president and grandson of City Mill founder Chung Kun Ai. "We're renovating our stores, increasing customer service and expanding our product offering. We're going to be a tough competitor."

Ai also said City Mill is looking for two to three new locations on Oahu. He wouldn't say where or when City Mill hopes to open stores. But Ai said he won't go head-to-head with Home Depot, to open just down the street from City Mill's flagship store on Nimitz Highway, or Eagle Hardware, negotiating for a site nearby.

"Why is it that a Costco, a Foodland and a 7-Eleven can all co-exist?" Ai said. "They don't go head-to-head, even though they sell many of the same products."

Convenience is a key strategy at City Mill, Ai said, with multiple locations to bring products closer to markets. Ai said he's not surprised to hear that Eagle may move nearby. "We've been hearing for the last three or four years they've been looking at a site in town," he said. "We've been adjusting our strategy accordingly.

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