Smart Growth for Vernon, CT
Home Depot closing stores, scaling-back development

By Howard French
Journal Inquirer
Friday, May 2, 2008

The Atlanta-based Home Depot chain of home improvement stores plans to shut 15 of its least profitable stores around the country, only one of those in New England, company officials said Thursday.

One store in Brattleboro, Vt., is the only New England outlet on the closing list.

There are three stores closing in the northeastern U.S. outside New England, one in Rome, N.Y., with New Jersey losing two stores, one in East Brunswick, and one in Saddle Brook.

The remaining stores to be closed are in Indiana, Kentucky, Louisiana, Minnesota, North Dakota, Ohio, and Wisconsin.

Altogether, up to 1,300 employees will be affected by the closings, according to the statement from Home Depot Chairman and Chief Executive Officer Frank Blake.

“The store managers and assistant store managers at these locations will be offered other store management positions within the organization,” Blake said. “The company will work to place the rest of the associates in other comparable store positions where available,” he added.

“Closing a store is always a difficult decision because it affects both our people and our communities,” Blake said. The decision to slow future store growth is “the right decision and will bring long-term benefits to our associates and to our shareholders,” he said.

“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,” Blake said.

The company will no longer pursue the opening of 50 U.S. stores “that have been in its new store pipeline, in some cases for more than 10 years,” he said. “Accordingly, the company will record a charge of approximately $400 million related to capitalized development costs and ongoing obligations associated with those future store locations,” he said.

It was unclear today whether the plans to scale back development would affect plans for a Home Depot in Vernon. Also as a result of the store closings, the company will record a charge against earnings of about $186 million, including inventory markdowns of $11 million and severance pay of $8 million, according to Blake.

“Continued investments in the company’s existing retail stores will include maintenance, merchandising resets, and other initiatives to improve all elements of the customer’s shopping experience,” he said.

The closing stores represent less than 1 percent of the company’s existing store portfolio, according to Blake. The chain operates 2,258 stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces, Mexico, and China.

Home Depot stock ended the trading day Thursday at $29.87 per share, up $1.07 per share, or 3.7 percent.

Copyright © 2008 - Journal Inquirer