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Home Depot
Type Public (NYSE: HD)
Founded 1978 (Atlanta, Georgia, USA)
Headquarters Vinings, Georgia, USA
Key people Frank Blake, CEO & Chairman
Industry Retail (Home Improvement)
Products Home improvement products such as appliances, tools, hardware, and
garden supplies & plants.
Revenue $90.837 billion USD (2006)
Net income $5.761 billion USD (2006)
Employees 355,000
Website www.homedepot.com
The Home Depot (NYSE: HD) is an American retailer of home improvement and
construction products.
Headquartered in Vinings, just outside Atlanta in unincorporated Cobb
County, Georgia. The Home Depot employs more than 355,000 people and
operates 2,164 big-box format stores across the United States (including the
50 U.S. states, the District of Columbia, Puerto Rico, the United States
Virgin Islands), Canada (ten provinces), Mexico and China.[1]
The Home Depot is the largest home improvement retailer in the United
States, ahead of rival Lowe's.
History
The Home Depot was founded in 1978 in Atlanta, Georgia by Bernie Marcus and
Arthur Blank after the two got fired from their positions at Handy Dan. The
company grew rapidly, with sales topping $1 billion annually by 1986. In
1997, Home Depot expanded to Chile and Argentina with unexpected success
during these countries' economic booms. But due to labor union influences in
countries historically moved by economic socialism (unlike the highly
capitalism-oriented economy in Mexico), Home Depot wanted to pull out and
avoid conflict of interests with their governments. Home Depot remains
active in South America, but increasingly focuses on its twelve new stores
in China opened in 2006 with better results and success in a communist, but
free-enterprise motivated country. [2] In 2000, after the retirement of
Marcus and Blank, Robert Nardelli was appointed chairman, president, and CEO.
Nardelli was replaced in January 2007 by Frank Blake. [3]
The Home Depot today
Home Depot stores are large, averaging 105,000 ft² (9,755 m²) and
warehouse-style, stocking a large range of supplies. The company color is a
bright orange (PMS 165, CMYK 60M100Y), on signs, equipment and employee
aprons.
Its 2006 sales totaled US$90.8 billion. 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 also owns EXPO
Design Center, a chain of higher-end home decorating and appliance stores.
In 2006, The Home Depot acquired Hughes Supply which is to be assimilated
into HD Supply serving contractors. In September 2005, Home Depot Direct
launched its high-end online home-furnishings store, 10 Crescent Lane,
shortly followed by the launch of Paces Trading Company, its high-end online
lighting store. In mid 2006, Home Depot acquired Home Decorators Collection
which was placed as an additional brand under its Home Depot Direct
Division.
On January 2, 2007, 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 golden parachute severance package of $210 million has also been
criticized because when the stock went down his pay went up.[3] [4] His
successor is Frank Blake, who previously served as the company's vice
chairman of the board and executive vice president. Shareholders expressed
relief at Nardelli's departure but doubt whether the incoming CEO Frank
Blake can run a retail business as large as Home Depot.[4] [5]
Board of directors
Current members of the board of directors of Home Depot are: Greg Brenneman,
Richard H. Brown, John Clendenin, Claudio González, Milledge Hart, Bonnie
Hill, Laban Jackson, Lawrence R. Johnston, Ken Langone, and Tom Ridge.
Marketing
The slogan "You can do it. We can help." has been used by the Home Depot
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.
Exclusive brands
The Home Depot carries several exclusive brands, including:
* Eco Options (store brand)
* Hampton Bay (lighting, ceiling fans & patio furniture)
* Pegasus (kitchen and bath items)
* Glacier Bay (faucets and bath)
* Husky (tools)
* Vigoro (fertilizer)
* Ryobi (power tools)
* Millstead
* Mill's Pride
* Workforce
* Thomasville cabinetry
* Behr (paint)
* Ralph Lauren paint
* RIDGID[6]
Fuel Centers
Starting in 2006, Home Depot has started testing with Fuel Centers at some
of its stores. The first centers located in Hermitage and Brentwood (both in
Tennessee), and Acworth, Georgia are expected to earn $5-$7 Million per
year. 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 also offer car washes, which
are large enough to accommodate full size pickups.
Major sponsorships
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. While remaining supportive of Canadian
Olympians, 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 two time NASCAR Champion (2002, 2005) Joe Gibbs Racing.
NASCAR driver Tony Stewart drives The Home Depot #20 Chevrolet Monte Carlo
SS/Impala SS. 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 January 2007, The Home Depot became the official Home Improvement sponsor
of the National Football League. [1]
In October 2006, The Home Depot partnered with Duke University to create
“The Home Depot Smart Home,” a residential laboratory where Duke students
will research and develop innovative solutions for the home in areas such as
security and home monitoring, communications, energy efficiency,
entertainment, environment and health.[2]
Environmental Record
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." [3] Home Depot has
worked with environmental groups to develop a variety of green programs,
like offsetting carbon emissions from its headquarters by planting thousands
of trees in Atlanta. [4]
In April of 2007 Home Depot announced it's own label, Eco Option, for nearly
3,000 products, from fluorescent light bulbs that conserve electricity and
natural insect killers, to sustainable forestry and clean water practices.
The idea is that the brand name will identify the products as
environmentally friendly. The initiative is expected to include 6,000
products by 2009, representing 12 percent of the chain's sales. [5]
The Home Depot internationally
Canada
Home Depot Canada is the Canadian unit of Home Depot and one of Canada's top
home improvement retailers. The Canadian operation consists of almost 150
stores and employs over 26,000 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 and
catalog sales).
The Canadian unit was created with the purchase of Aikenhead Hardware. Home
Depot management has an ambitious plan to overtake its biggest competitor,
Rona, which has about four times as many stores. However, many of Rona's
stores are smaller than the typical Home Depot store. In terms of big box
stores, Home Depot has many more stores than Rona. Home Depot will also face
competition from Lowe's as they move into the Canadian market in 2007;
Lowe's first Canadian outlets will be located in Ontario.
Mexico
The Home Depot entered Mexico in 2001, and has since become one of the
largest retailers in Mexico, operating more than 50 stores with over 6,600
employees. Most of the Home Depot stores are located in the same
installations in which the extinct Home Marts were located. Border town Home
Depots attract some American consumers to make their US dollar go further in
purchases of mostly same home improvement products in Home Depots of
Tijuana, Mexicali, Ciudad Juarez, Nuevo Laredo and Matamoros. In 2006, Home
Depot began a program to offer Mexican employees to have "guest worker"
incentives for Mexican nationals and Latin Americans to easily, but legally
obtain employment in Home Depots across the US.
China
In December 2006, The Home Depot announced its acquisition of the Chinese
home improvement retailer The Home Way. [6] The acquisition gave The Home
Depot an immediate presence in China, with 12 stores in six cities. Although
China is ruled by the communist party, the government allows Home Depot to
further deregulate its practices, decide on matters liberally on employee
benefits and labor union membership in a socialist country.
Other
Despite no official documents released on Home Depot's desire to enter other
countries markets, the Home Depot was rumored to invested future expansion
to Europe (i.e. the United Kingdom) and East Asia (i.e. Japan), but Home
Depot has a strong "union-free" policy like other major retail companies (Wal
Mart blazed the trail for over 40 years), or may tolerate labor unions in
some states or countries to a certain point. Home Depot had nine stores
across South America from 1997 to 2002, but aborted expansion for new stores
by 2003 due to the region's economic downturn (recession), left-wing
government intervention and labor union influences.
References
1. ^ News Releases. The Home Depot (November 17, 2006).
2. ^ Home Depot Finds The World A Small Place. Forbes.com (March 21, 2002).
3. ^ a b News Releases. The Home Depot (January 3, 2007).
4. ^ a b Home Depot's Surprising Choice for CEO. Business Week (January 4,
2007).
5. ^ Nardelli Bails On Home Depot. Forbes.com (January 3, 2007).
6. ^ Although Ridgid only sells its smaller tools through The Home Depot,
Ridgid's larger tools are apparently not entirely a Home Depot-exclusive
brand.
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