Troubled Housing Market Slows Down Home Depot’s US Plans
The world's biggest home-improvement retailer Home Depot Inc. announced today that it has put the brakes on opening nearly 50 U.S. stores, some that have been in the pipeline for more than 10 years, and will close 15 under-performing stores as it cuts capital spending to improve returns. The closings will eliminate or move 1,300 jobs.
The moves by the home-improvement retailer come amid little if any expectation of a quick rebound in the housing market. Home Depot has been hoping that its year-long turnaround efforts -- a plan that has included layoffs and mending its poor reputation for customer service -- will position it for when a rebound finally occurs.
"By building fewer stores, in the best locations, and making sure our existing stores are profitable, our company will be in a much stronger competitive position," said Chairman and Chief Executive Frank Blake.
Since taking over in January 2007, Blake has sold the company's commercial-builder unit, and closed landscape and floor outlets to focus on retail stores, where customer service trails that of Lowe's Cos. Home Depot lost 33 percent of its market value last year.
The moves will cost Home Depot $586 million, mostly in the first quarter, the company said.
Published on May 1, 2008
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