Core retail stores stay open

The housing slump won’t force cutbacks at Home Depot, CEO says.

ATLANTA (AP) — The Home Depot Inc. doesn’t plan to make any broad-based job cuts or reduce the number of its core retail stores in the face of a persistent housing slump that isn’t expected to improve anytime soon, Chief Executive Frank Blake said Friday.

Blake told The Associated Press in an exclusive interview that the focus of the Atlanta-based company on customer service means more employees, not fewer, will be needed.

“We’re making investments, notwithstanding the downturn,” Blake said. “I think that’s absolutely the right thing to do for the business. It’s going to lead to long-term success.”

Though Home Depot said earlier this week it was closing its 11 Landscape Supply stores and in the past it has shut a number of its Expo design centers, Blake said there are no plans to close any of the company’s more than 2,000 core retail stores.

“We’re not going to shut stores to save costs,” Blake said. “We don’t need to.”

Blake said he recognizes that with profits and sales down and the company’s stock price down more than 12 percent on an adjusted basis since he replaced Bob Nardelli as CEO in January, investors may be uneasy. That’s especially an issue because Home Depot has taken aggressive moves to boost its stock price, including selling its wholesale distribution business and launching a major stock buyback program.

“What keeps me up at night is getting the company running in a way the company needs to run,” Blake said.

Right strategy

Despite the stock performance, Blake insisted that Home Depot’s strategy to focus more attention on its core business is the right strategy for the world’s largest home improvement store chain.

“I think it’s entirely fair and appropriate that I’m assessed in terms of the stock price,” Blake said. “It’s a right metric for folks to use.”

Asked if he is concerned about the company’s stock price, something his predecessor was graded on during his six years at Home Depot, Blake said he believes that eventually the investment community “will say this is a great stock to own.”

“I recognize that we’re in a very tough market,” Blake said. “It’s an obvious statement. We’ve been very transparent with the investor and analyst community.”

Blake also said that the company has been candid with investors about its future.

“Don’t expect our new store footprint to be a great growth engine going forward,” Blake said. “Don’t expect acquisitions to be a growth engine, we sold that business. What you should expect as an investor, we’re going to invest in our core business.”

Blake said he has been pleased with the strength of Home Depot’s culture, though he knows there are always areas in the company that can be improved.

“Every day you recognize you have 325,000 people and lots of transactions and lots of stores,” Blake said. “So, kind of getting the alignment in our organization, getting everybody to have confidence in the direction we’re moving is an enormous undertaking.”