May 1, 2008 10:38 am US/Eastern
Home Depot Closing 15 U.S. Stores
ATLANTA (AP) ―
The Home Depot is closing 15 of its namesake stores, affecting 1,300 employees. It is the first time the home improvement retailer has ever closed a flagship store for performance reasons.
The Atlanta-based company said Thursday that the underperforming U.S. stores being closed represent less than 1 percent of its existing stores. They will be shuttered within the next two months.
The stores to be closed consist of three in Wisconsin, two in Ohio, two in New Jersey, two in Indiana and one each in Kentucky, Louisiana, Minnesota, North Dakota, New York and Vermont.
A company spokesman said some of the employees will be relocated, while others could lose their jobs.
Spokesman Ron DeFeo said Home Depot has only closed one of its flagship stores previously because of structural damage.
The company reiterated its intention to open 55 new stores in the 2009 fiscal year.
Due to the store closings, Home Depot will record a charge of roughly $186 million, including inventory markdowns of $11 million and severance of $8 million. It also will record a charge of roughly $400 million related to development costs and ongoing obligations associated with the future store locations that it is scrapping.
New store capital spending will be reduced by $1 billion over the next three years, Home Depot said.
Excluding charges, the company reiterated that its diluted earnings per share from continuing operations are expected to decline by 19 percent to 24 for fiscal 2008. Home Depot releases its first-quarter results May 20.
Its shares rose 83 cents, or 2.9 percent, to $29.63 in morning trading.
Home Depot is the world's largest home improvement store chain. It operates 2,258 stores in the United States, Canada, Mexico and China.
(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
CBS News Interactive: Eye On The Economy
Click to enlarge
Stumble It!
Comments