In a sign of the times and sagging home sales, The Home Depot, the world's largest home improvement retailer, revealed today, May 1, that it will be closing 15 stores, senior editor Andy Carlo reports.
In a prepared statement, the Atlanta-based retailer said the "underperforming" stores did not meet The Home Depot's "targeted returns" and represent less than 1% of its existing store portfolio. About 1,300 associates will be impacted by the move. Store managers and assistant managers will be offered other positions within the company while associates will be placed comparable positions "where available," the company said.
"Closing a store is always a difficult decision because it affects both our people and our communities," said Frank Blake, chairman and CEO of The Home Depot. "But, as with our decision to slow future store growth, this is the right decision and will bring long-term benefits to our associates and to our shareholders."
The closings will result in a charge of approximately $186 million for The Home Depot, including inventory markdowns of $11 million and severance of $8 million.
Stores being closed include: east Fort Wayne and Marion, Ind.; Frankfort, Ky.; Opelousas, La.; East Brunswick and Saddle Brook, N.J.; Rome, N.Y.; Bismarck, N.D.; Findlay and Lima, Ohio; Brattleboro, Vt.; along with locations in Beaver Dam, Fond du Lac and Northwest Milwaukee, Wis.
In contrast, The Home Depot reiterated its plans to open 55 stores in the current fiscal year and plans to grow its total square footage by 1.5% per year, beginning in 2009. However, the company no longer plans to open approximately 50 other stores, which had been in the retailer's "new store pipeline" – some for as long as 10 years – the company said. Additionally, the budget for new store spending has been reduced by $1 billion over the next three years.
The Home Depot operates 2,258 stores in all 50 U.S. states, the District of Columbia, Canada, China, Guam, Mexico, Puerto Rico and the U.S. Virgin Islands. Last year, the company had sales of $77.3 billion.