The Home Depot, Inc.
 |
| Type |
Public |
| Traded as |
NYSE: HD
Dow Jones Industrial Average Component
S&P 500 Component |
| Industry |
Retailing |
| Founded |
Marietta, Georgia, United States (1978) |
| Headquarters |
Cobb County, Georgia, United States |
| Number of locations |
3,248 (January 2011)[1] |
| Area served |
United States, Canada, Mexico, China |
| Key people |
Frank Blake
(Chairman and CEO) |
| Products |
Home appliances, tools, hardware, lumber, building materials, paint, plumbing, flooring, garden supplies & plants |
| Revenue |
 US$ 67.997 billion (FY 2011)[1] |
| Operating income |
US$ 5.839 billion (FY 2011)[1] |
| Net income |
US$ 3.338 billion (FY 2011)[1] |
| Total assets |
 US$ 40.125 billion (FY 2011)[1] |
| Total equity |
US$ 18.889 billion (FY 2011)[1] |
| Employees |
321,000 (January 2011)[1] |
| Website |
HomeDepot.com |
The Home Depot (NYSE: HD) is an American retailer of home improvement and construction products and services. The Home Depot operates many big-box format stores across the United States (including all 50 U.S. states, the District of Columbia, Puerto Rico, the Virgin Islands and Guam), all ten provinces of Canada, Mexico and China. The Home Depot is headquartered at the Atlanta Store Support Center in Cobb County, Georgia, in Greater Atlanta.[2][3][4]
In terms of overall revenue reported to the U.S. Securities and Exchange Commission, The Home Depot is the largest home improvement retailer in the United States, ahead of rival Lowe's. The store operates out of large warehouse style buildings averaging 105,000 ft² (9,755 m²) with megastores operating in larger facilities (the company's largest store, located in Union, New Jersey is 225,000 ft²).[5]
The Home Depot was founded in 1978 by Bernie Marcus, Arthur Blank, Ron Brill, and Pat Farrah.[6] The Home Depot's proposition was to build home-improvement warehouses, larger than any of their competitors' facilities. Investment banker Ken Langone helped Marcus and Blank to secure the necessary capital.
| “ |
"Bernie and I founded The Home Depot with a special vision -- to create a company that would keep alive the values that were important to us. Values like respect among all people, excellent customer service and giving back to communities and society."[7] |
” |
|
—Arthur Blank
|
In 1979, the first two stores, built in spaces leased from J. C. Penney that were originally Treasure Island "hypermarket" (discount department and grocery) stores, opened in metro Atlanta on June 21. Two more opened not long after, and all four shared the space under the "squiggly" zig-zag roof with Zayre on its right side. The first headquarters was on Terrell Mill Road on the southeast side of Marietta, Georgia, just down from one of the stores at the corner of Cobb Parkway. (That store 33°54′23″N 84°29′14″W / 33.9065°N 84.4872°W / 33.9065; -84.4872 (former location of The Home Depot's first store (Marietta Plaza, 1979)), in the Marietta Plaza strip mall, became Value City, changing to Burlington Coat Factory in 2008; part was also a short-lived Little Bucks, in which Brill had a stake.)
Since the 1990s, its current headquarters (33°51′54″N 84°28′55″W / 33.865°N 84.482°W / 33.865; -84.482 (The Home Depot, headquarters)) is a complex of high-rise buildings on Paces Ferry Road, on the western edge of the Cumberland/Galleria edge city in unincorporated Cobb County, Georgia, across Interstate 285 from the town of Vinings, and served by mail from Atlanta. The tallest is approximately 85 metres (279 ft) high, the fourth-tallest in the Vinings area.[8]
In 2000, after the retirement of Marcus and Blank, Robert Nardelli was appointed chairman, president, and CEO.
Nardelli resigned as Chairman CEO on January 3, 2007, amid controversy over his salary, the company's stagnating stock price, and poor customer service. He was succeeded by executive vice president and vice chairman Frank Blake. Although a longtime deputy to Nardelli at GE and Home Depot, Blake has been said to lack Nardelli's hard edge and instead prefers to make decisions by consensus. Indeed Blake repudiated many of his predecessor's strategies, and it has been reported that the two men have not spoken since Nardelli departed Home Depot.[9][10]
Nardelli had pushed hard to make the company more efficient, instituting many metrics and centralizing operations, while cutting jobs to meet quarterly earnings targets. While this initially doubled earnings and reduced expenses, it alienated many of the store managers and rank-and-file store associates, and by extension the customers. Nardelli, who regarded home improvement store-by-store sales as less important due to market saturation from competition such as Lowe's, aimed to dominate the wholesale housing-supply business though building up HD Supply, a unit that Blake sold for $8.5 billion in August 2007 since it was not part of Home Depot's integrated business. In comparison to Nardelli whose numbers-driven approach never appreciated the role of the store and its associates, Blake's strategy has revolved around reinvigorating the stores and its service culture (engaging employees, making products readily available and exciting to customers, improving the store environment, and dominating the professional contracting business, an area in which Home Depot's closest rivals trail far behind), as he recognized that employee morale is a more sensitive issue in retail compared to other industry sectors like manufacturing. [11]
In 2007 the Home Depot sold its $13 billion revenue wholesale (trade) division, HD Supply, to a consortium of three private equity firms, The Carlyle Group, Bain Capital and Clayton, Dubilier and Rice (with each agreeing to buy a one-third stake in the division). Home Depot sold their wholesale construction supply business to fund a stock repurchase estimated at $40 billion.[citation needed]
Map of Home Depot stores in the U.S., as of August 2011.
Home Depot stores average 105,000 ft² (9,755 m²) in size and are organized warehouse-style, stocking a large range of supplies. Home Depot's largest store is located in Anaheim, California.[12] It is also the second and eighth largest employer in Signal Hill, CA.[13] The company color is a bright orange (PMS 165, CMYK 60M100Y), on signs, equipment and employee aprons.
Its 2005 sales totaled US$91.8 billion (US$77.0 billion in retail sales). Despite the 10% increase in revenue, it dropped three spots to #17 on the 2007 FORTUNE magazine's FORTUNE 500 list (it was #13 in 2005 and #14 in 2006). The Home Depot owned EXPO Design Center, a chain of home decorating and appliance stores, but closed the chain in 2009.[14] In 2006, the Home Depot acquired Hughes Supply which was assimilated into HD Supply serving contractors, which it sold in June 2007. In September 2005, Home Depot Direct launched its online home-furnishings store, 10 Crescent Lane, shortly followed by the launch of Paces Trading Company, its online lighting store. In mid 2006, the Home Depot acquired Home Decorators Collection which was placed as an additional brand under its Home Depot Direct Division. Home Depot Landscape Supply, with only a few stores each in metro Atlanta and Dallas/Fort Worth, was founded in 2002 and closed in late 2007.
On January 2, 2007, the Home Depot and Robert Nardelli mutually agreed on Nardelli's resignation as CEO after a six-year tenure. Nardelli resigned amid complaints over his heavy-handed management and whether his pay package of $123.7 million, excluding stock option grants, over the past 5 years was excessive considering the stock's poor performance versus its competitor Lowe's. His severance package of $210 million has been criticized because when the stock went down his pay went up.[10][15] His successor is Frank Blake, who previously served as the company's vice chairman of the board and executive vice president. Blake agreed to a much more conservative compensation package than his predecessor that is very heavily dependent upon the success of the company.
In 2008 and 2009, with the downturn in the housing market, The Home Depot announced the layoff of several thousand associates, as well as the closing of 54 stores nationwide, including the entire EXPO Design Center chain.[16][17] In the year to February 2009 sales totaled $71.288 billion, more than $20 billion down from the peak of two years earlier due to the sale of HD Supply and falling revenue at the retained business.
Current members of the board of directors of the Home Depot are: F. Duane Ackerman, David H. Batchelder, Frank Blake, Ari Bousbib, Gregory D. Brenneman, Albert P. Carey, Armando Codina, Bonnie G. Hill, and Karen Katen.[18] The Home Depot's board consists of 9 members, with 8 of them being independent directors.
The slogan "More saving. More doing." was introduced by The Home Depot in the March 18, 2009 circular, replacing "You can do it. We can help." which had been used since 2003. Other slogans used in the past 25 years include "The Home Depot, Low prices are just the beginning" in the early 1990s and "When you're at the Home Depot, You'll feel right at home" in the late 1990s and "The Home Depot: First In Home Improvement!" from 1999-2003.
The domain homedepot.com attracted at least 120 million visitors annually by 2008 according to a Compete.com survey.[19]
The Home Depot exclusively carries several major brands, including:
Additionally, the retailer has its own house brands:
- Husky (tools)
- Workforce (tools,shelving, storage cabinets, extension cords, worklights, tarps, paintbrushes)
- Glacier Bay (Kitchen sinks, faucets, etc)
Starting in 2006, the Home Depot has started testing with fuel centers at some of its stores. The first such "Home Depot Fuel" convenience store (C-Store) was located in Brentwood, Tennessee followed a month later by a center about 20 miles (32 km) away in Hermitage, both suburbs of Nashville. Four additional prototype stores were built within the year at Acworth, Georgia; Smyrna, Tennessee ; Greensboro, Georgia; and then Winchester, Tennessee in that order. The centers are expected to earn $5–$7 million per year, though the actual number is reported to be much higher. The fuel centers sell beer, hot food, snacks along with providing diesel at a separate island. This allows contractors with large trucks to be able to fill their vehicles. The fuel centers offer car washes, which are large enough to accommodate full-size pickup trucks.[20]
The Home Depot Foundation is the philanthropic arm of the company created in 2002. It has contributed over $200 million in time, labor, money, and supplies to a number of causes, including Habitat for Humanity, California-based City of Hope National Medical Center, and playground construction organization KaBOOM![21]
Home Depot has partnered with the Georgia Emergency Management Agency's Ready Georgia campaign, leading both supplies and facility use to this statewide effort to increase emergency preparedness among Georgia's children.[22] The company also provided ready kits and other prizes for an art and essay contest for Georgia elementary school students.[23]
In 2005, Home Depot was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.[24][25][26]
The Home Depot has stated on their website that they have a commitment "to the environment and pledge to continue to be an industry leader in looking for products and services that are respectful of our world."[27] The Home Depot introduced a label on nearly 3,000 products in 2007. The label promotes energy conservation, sustainable forestry and clean water. Home Depot executives said that as the world’s largest buyer of construction material, their company had the power to persuade thousands of suppliers, homebuilders and consumers to follow its lead on environment sustainability. “Who in the world has a chance to have a bigger impact on this sector than Home Depot?” said Ron Jarvis, who is the vice president for environmental innovation at Home Depot.[28] This program is following Home Depot’s promise in late 1990s to eliminate the number of sales of lumber from endangered forests in countries including Chile and Indonesia.[29] Home Depot has since worked with environmental groups to create a variety of green programs. For example, Home Depot planted thousands of trees at its headquarters in Atlanta to offset carbon emissions. In 2007, The Home Depot Foundation (the company's charitable foundation) committed to investing $100 million over the next decade to build over 100,000 green affordable homes and plant three million trees.
Additionally, The Home Depot promotes compact fluorescent light bulbs in their stores. As part of this effort, the company has created the largest recycling program in the United States for the bulbs.[30]
Barack Obama visited a Home Depot store in Arlington County, Virginia on December 15, 2009 to discuss how businesses and home owners can both benefit financially from energy efficiency home renovation projects. Obama supports home retrofitting projects that, he believes, will create jobs for construction workers many of whom were out of work due to down turn in the housing market, and will also decrease energy consumption.[31]
Since 1991, the company has become a large supporter of athletics, sponsoring the United States and Canadian Olympic teams, and launching a program which offered employment to athletes that accommodates their training and competition schedules. The Home Depot ceased to be a sponsor of the Canadian Olympic Team in 2005.
Company co-founder Blank also purchased the Atlanta Falcons franchise of the National Football League in February 2002. The Home Depot is also the primary sponsor of NASCAR Sprint Cup 2009 Rookie Of The Year Winner Joey Logano of Joe Gibbs Racing in a Toyota Camry. Before Joey, it was the sponsor of 3-time Cup Champion Tony Stewart since his rookie year; in 2009 Tony left Joe Gibbs Racing to own half of Stewart Haas Racing. The Home Depot is also the title sponsor of The Home Depot Center in Carson, California, home to both the Los Angeles Galaxy and Chivas USA of (Major League Soccer), and Los Angeles Riptide (Major League Lacrosse), and many past major sporting events.
In 2006, The Home Depot partnered with Duke University's Pratt School of Engineering to create "The Home Depot Smart Home." The smart home is a live-in laboratory for 10 upper-class engineering students that allows them to immerse themselves in the work. The goal of the project is to help provide innovative solutions for the home in areas such as security and home monitoring, communications, energy efficiency, entertainment, environment and health.[32]
In January 2007, the Home Depot became the official Home Improvement sponsor of ESPN's College Gameday.
Seventy-three percent of the Home Depot's campaign contributions went to Republican candidates in the 2005-2006 US elections. "Home Depot's PAC gives money based on a candidate's voting record, committee assignment and leadership position," said company spokesman Jerry Shields.[34] The CEO in this period was Bob Nardelli, a friend of U.S. President George W. Bush.[35] Nardelli hosted a garden reception/fundraiser for Bush at his Atlanta home on May 20, 2004.[36]
Home Depot Canada is the Canadian unit of the Home Depot and one of Canada's top home improvement retailers. The Canadian operation consists of nearly 180 stores and employs over 35,000 people in Canada. Home Depot Canada has stores in all ten Canadian provinces and serves territorial Nunavut, Northwest Territories, and Yukon through electronic means (Online sales).
The Canadian unit was created with the purchase of Aikenhead's Hardware. Home Depot management has an ambitious plan to overtake its biggest competitor, RONA, which has about four times as many stores. However, some of RONA's stores are smaller than the typical Home Depot store. In terms of big box stores, the Home Depot has more stores than RONA, (not including other Rona banners such as Réno Dépôt or Cashway). As of 2007, RONA pulled ahead of The Home Depot in total retail sales, due to aggressive consolidation efforts by RONA, combined with the loss of The Home Depot's industrial supply division, HD Supply, in July 2007. The Home Depot now faces competition from Lowe's as they have moved into the Canadian market effective the end of 2007; Lowe's now has 29 outlets in Canada.
The Home Depot banner in Quebec, where it has 22 stores, reads "Home Depot" without the definite article "the" in order to ensure a more cross-compatible proper name (that does not read like an English sentence) between both the French and English languages. However, Depot is still in English and not in French, which would be Dépôt.
The Home Depot store in Mexico City, Mexico
The Home Depot, the world's largest home improvement retailer, currently operates 91 stores in Mexico[37] and has become one of the largest retailers in Mexico since it entered the market in 2001. The Home Depot increased its presence in Mexico in 2004, with the acquisition of Home Mart, the second largest Mexican home improvement retailer.
The Home Depot Mexico employs more than 7,100 associates throughout the country and has an annual growth rate of 10 percent.[38]
In December 2006, the Home Depot announced its acquisition of the Chinese home improvement retailer The Home Way.[39] The acquisition gave the Home Depot an immediate presence in China, with 12 stores in six cities. Beginning of April, 2011, Home Depot recently shut its last Beijing store, the fifth Home Depot to close in China in the past two years.
There have been reports that the Home Depot is interested in acquiring B&Q, the largest DIY retailer in the United Kingdom, Ireland and China. Speculation of a takeover began in 1999 when the retailer Asda was purchased by Wal-Mart. The Home Depot would have to acquire Kingfisher plc, B&Q's parent company, to acquire B&Q. Kingfisher consists of several European DIY chains, however the Home Depot is only interested in B&Q operations and says that it would dispose of the Castorama chain which operates in France, Italy, Poland and Russia. Several talks have not yet resulted in a takeover deal.[40][41][42][43]
In 1997, Home Depot entered the Chilean and Argentine markets. While the venture was viewed with great optimism by founders Bernie Marcus and Arthur Blank,[44] it eventually proved unprofitable. In October 2001, Chilean partners Falabella bought out Home Depot's share of the five Chilean Home Center stores and rebranded them Sodimac. The company has since expanded across South America very profitably and successfully. Argentina's Home Depots were bought out by Chilean company Hipermercados Jumbo and rebranded Easy stores, a company that has also expanded across South America.
In 2004, Home Depot workers at a suburban Detroit store in Harper Woods, Michigan, rejected a bid to be represented by a labor union, voting 115 to 42 against joining the United Food and Commercial Workers. If the union had won, the Michigan store would have been the first Home Depot to have union representation.[45]
In October 2008 (although he no longer has anything to do with the company), co-founder Bernie Marcus called the Employee Free Choice Act "the demise of a civilization".[46]
The Home Depot was embroiled in whistleblower litigation brought under the Sarbanes-Oxley Act (SOX) law. In July 2005, former employee Michael Davis, represented by attorney Mark D. Schwartz filed a whistleblower lawsuit against the Home Depot, alleging that his discharge was in retaliation for refusing to make unwarranted backcharges against vendors. Davis alleges that the Home Depot forced its employees to meet a set quota of backcharges to cover damaged or defective merchandise, forcing employees to make chargebacks to vendors for merchandise that was undamaged and not defective. The Home Depot alleges that it fired Davis for repeatedly failing to show up for work.
The trial initially was concluded in June 2006, but in April 2007, U.S. Department of Labor Judge Pamela Lakes Wood ordered the case reopened after the Home Depot's law firm Akin Gump Strauss Hauer & Feld revealed that the retail giant's in-house counsel had told them that two Home Depot employees who testified at the trial had lied. Akin Gump sent Wood a letter on September 29, 2006, in which the law firm requested that the testimony be stricken. In response to Akin Gump's revelation, Davis' attorney Mark D. Schwartz asked for the case to be reopened to permit further questioning of the witnesses. On April 6, 2007, Wood ordered the case to be reopened.
Schwartz was quoted by the New York Post as saying, "I have reason to believe these witnesses were intimidated into giving false testimony." The Home Depot called Schwartz's allegations "meritless."[47]
Home Depot has settled the dispute in a stipulation of settlement dated March 28, 2008. In the settlement, Home Depot changed some of its corporate governance provisions. Home Depot also agreed to pay the plaintiff's counsel $6 million in cash and $8.5 million in common stock.[48]
Home Depot has been the subject of an American Family Association-led boycott because it has sponsored gay pride festivals.[49] AFA director of special projects Randy Sharp said, "Home Depot should be like a lot of Fortune 500 companies and simply remain neutral in the culture war -- don't give money, don't give vehicles, don't lend employee support to homosexual activities on Main Street USA."[50]
The Human Rights Campaign thanked "a group of dedicated HRC Partners", including Home Depot, for providing the resources necessary to help pass the New York State gay marriage bill. The Home Depot says on its web site that they are "honored to say we support" HRC and other LGBT advocacy groups.[51]
Update - The Home Depot has tempered its language regarding "Pride Network" diversity. They now state "Pride Network’s mission and focus is to raise internal awareness and understanding of the gay, lesbian, bi-sexual and transgender customer segment and promote inclusion and respect for all associates." [51]
In the wake of the 2011 Joplin tornado in which the walls of a Home Depot collapsed in Joplin after being hit by an EF5 tornado, The Kansas City Star citing engineers criticized Home Depot's practice of using tilt up construction in hundreds of its big box stores (other nearby big box stores in Joplin including a Walmart and Academy Sports which had a different concrete block construction lost their roofs but the walls remained intact). In tilt up construction the concrete is poured on site and lifted into place and then attached to the roof. The engineers told the Star that the practice while normally safe and efficient is dangerous in major storms because once the roof is lifted (as happened in Joplin) the walls collapse in a domino effect. Seven people were killed in the front of the store when the 100,000 pound walls collapsed on them while 28 people in the back of the store survived when those walls collapsed outward. Only two of the slab walls in the Home Depot survived. In contrast 3 people died in the Walmart but 200 survived. Engineers noted that when concrete blocks construction fail, it breaks in pieces and usually not in huge slabs. Home Depot said it fundamentally disagreed with the Star engineers and said it would use tilt up construction when it rebuilds the Joplin store.[52]
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- ^ Congratulations to our “Get Ready Georgia” Art and Essay Contest Winners!, Ready Georgia
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- ^ "Experts challenge Home Depot building design, codes after Joplin tornado". KansasCity.com. http://www.kansascity.com/2011/06/25/2975177/experts-challenge-building-design.html#ixzz1QZoEgC5d. Retrieved June 28, 2011.
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