The Home Depot, the world's largest home improvement retailer, today announced it will exit its EXPO business. The company is also taking steps to streamline its support functions. These decisions will impact 7,000 associates, or approximately two percent of the company's total workforce. Finally, the company also reaffirmed its previous guidance on earnings for the 2008 fiscal year, excluding the charge associated with the actions announced today and the store rationalization charge recognized earlier in the year.
EXPOThe EXPO business has not performed well financially and is not expected to anytime soon. Even during the recent housing boom, it was not a strong business. It has weakened significantly as the demand for big ticket design and décor projects has declined in the current economic environment. Continuing this business would divert focus and resources from the company's core "orange box" stores. Therefore, over the next two months, the company will be closing 34 EXPO Design Center stores, five YardBIRDS stores, two Design Center stores and a bath remodeling business known as HD Bath, with seven locations. These steps will impact approximately 5,000 associates in those locations, their support functions and their distribution centers.
"Exiting our EXPO business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," said Frank Blake, Chairman and CEO. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."
Support ReductionsThe company also announced that it is restructuring support functions to better align the company's cost structure with the current economic environment. This includes continuing its shift to a region- and district- based support model in various field functions and reducing headcount in administrative functions in the company's store support centers. These support reductions will impact approximately 2,000 associates and will result in a 10% reduction in the company's officer ranks. They will not impact any customer-facing positions in Home Depot stores.
Special Note to EXPO CustomersThroughout the process of closing its EXPO stores, The Home Depot is committed to meeting the needs of its customers. The company will complete any construction projects that have been started. In cases where product has been ordered but the construction project hasn't been started, the company will refund the price of installation and the design retainer. The customer can then arrange for their own installation. In cases where a design retainer has been paid but product has not yet been ordered, the customer will receive a full refund of the design retainer, as well as a 10% off coupon that can be used for a product and services discount at a local Home Depot store. All special orders will be completed. Any back orders will be refunded to the customer. Customers with questions should contact their local EXPO or one of the company's call centers at 1-800-259-1042 or 1-800-797-1745.
For the full press release and a list of store closings, click here.
PLEASE NOTE: NO "ORANGE-BOX" HOME DEPOT STORES ARE CLOSING.
Source: Home Depot