Home Depot follows retail trend, shuttering stores
Atlanta-based home improvement giant Home Depot said Thursday it plans to close some of it flagship stores due to low performance.
Officials from the world's largest home improvement chain said it would close 15 of its underperforming stores within the next two months. The move will be the first time the firm has ever closed a flagship store due to low performance. It previously one flagship store, due to structural damage, in its 40-year history.
The 15 closures, which represent less than 1 percent of Home Depot's 2,258 stores, will affect 1,300 employees. Locations of stores to be closed are in Wisconsin (three); two in each Indiana, Ohio and New Jersey; and one each in Kentucky, Louisiana, Minnesota, New York, North Dakota and Vermont.
Home Depot said it would still move forward with 55 new stores in fiscal 2009, though the firm said it would scale back new store capital spending by $1 billion over the next three years. It will also no longer pursue the opening of roughly 50 U.S. stores that have been in the 'new-store pipeline,' some as long as 10 years.
'Closing a store is always a difficult decision because it affects both our people and our communities,' said Frank Blake, chief executive officer. '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.'
Home Depot's closures mimic recent announcements by other major retailers, including:
' Ann Taylor, which will close 117 stores in its chain.
' Foot Locker, 140 stores.
' Jewelry chain Zales, 100 stores.
' Leather chaing Wilsons, 158 stores.
' Pacific Sunwear, closing its 153-store Demo chain.
' Disney, said Thursday it's closing 98 merchandise outlets.
Retail trade group the International Council of Shopping Centers predicts that 5,770 stores will close in 2008, up 25 percent from 2007, when there were 4,603 closures.
'This is just the beginning,' retail analyst Jennifer Black of Jennifer Black & Associates told USA Today. 'We’re so overstored.'
Home Depot follows retail trend, shuttering stores
