Home Depot

The Home Depot (), headquartered in Atlanta, Georgia, is a big-box home improvement retailer that aims for both the do-it-yourself consumer and the professional in home improvement and construction. It is the largest home improvement retailer in the world, the second largest retailer in the United States, behind Wal-Mart, and the third largest retailer in the world, behind Wal-Mart and French company Carrefour. The Home Depot operates about 2,000 stores across North America. The company operates stores in the United States (including the 50 U.S. states, Puerto Rico, the United States Virgin Islands), Canada, and Mexico. The Home Depot also operates EXPO Design Center stores in select U.S. markets, providing high-end home design products and services, and 10 Crescent Lane, an online home-furnishings store.

The Home Depot employs more than 325,000 people.

History

Home Depot stores are large, averaging 109,000 ft² (10,000 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.

The company was founded in 1978 in Atlanta, Georgia by Bernie Marcus and Arthur Blank after the two quit their positions at Handy Dan, and grew rapidly, with sales topping $1 billion annually by 1986.

In 2000, Marcus and Blank retired. Robert (Bob) L. Nardelli became chairman, president & chief executive officer of The Home Depot. He had previously spent almost 30 years at General Electric, his career culminating as president and CEO of GE Power Systems.

The Home Depot today

Its 2005 sales totaled US$81.5 billion. Despite the 11% increase in revenue, it dropped one spot to #14 on the 2006 FORTUNE magazine's FORTUNE 500 list (it was #13 in 2005 on $73.1 billion sales in 2004). 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 Decorator's Collection which was placed as an additional brand under its Home Depot Direct Division.

Corporate governance

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, Robert Nardelli, and Tom Ridge.

Exclusive brands

Home Depot carries several exclusive brands:

RIDGID (power tools and professional plumbing tools)
Ryobi (power tools)
Workforce (Home Depot house-brand hand tools)
Thomasville cabinetry
Ralph Lauren paint
Mill's Pride
Hampton Bay (Home Depot house-brand lighting and ceiling fans)
Glacier Bay (Home Depot house-brand faucets)
Behr Paint
Vigoro Fertilizer

Self-checkout

Home Depot has recently added self checkout registers at most of its stores in North America. These automated kiosks allow the customer to scan the barcode of the item they wish to purchase, then insert money to pay for the items, and receive any change automatically. The customer no longer needs to interact with a store employee during checkout, which has allowed Home Depot to redeploy more staff onto their store floors to assist shopping customers in some situations, and reduce overall staff in its stores in others, cutting labor costs and reducing the overhead. Home Depot was a pioneer of these kiosks, although about 50% of customers do not approve of them. It is still a matter of controversy over whether these registers have increased or decreased the store's level of customer service.

Controversies

Shareholder Controversy

At Home Depot's annual shareholder's conference ^* on May 29, 2006, in Wilmington, Delaware, many of the companies shareholders expressed anger and confusion about CEO Nardelli's pay package of $123.7 million, excluding stock option grants, over the past 5 years. Nardelli was awarded this package while Home Depot's stock sunk about 9%, and competitor Lowe's saw a 185% increase on a split-adjusted basis. While some stockholders were prepared to ask some tough and pointed questions to the board of directors, they were hindered by the fact that only one of the board's members actually showed up to the meeting, Nardelli himself. Their comments were kept to a strict time limit, displayed on a large clock. Nardelli refused to acknowledge any shareholder's comments, answer any questions, and he promptly left after only thirty minutes, causing an uproar of anger and rage. Votes on shareholder proposals afterward showed an unusually high level of dissent, with over one third withholding their support for Nardelli's re-election as CEO.

The company's "official" excuse for the absence of the board on the day of the meeting was that "many" of the directors were at headquarters over the past few days for their quarterly meeting and remain there today on company business. But directors had over a month's notice of the meeting, with the date and location of the meeting being posted on April 14th, 2006. Directors are also paid for travel expenses to and from shareholder meetings by the company, with full access to a corporate jet.

Home Depot stock has sunk further since the debacle, from about $43 a share in April to just under $37 a share in early June.

Illegal Drugs Found in Merchandise

Recently, there have been several cases where illegal drugs were found inside some Home Depot merchandise from stores in Massachusetts. One customer found two fifty-pound bricks of marijuana with a street value of nearly $145,000 inside a bathroom vanity that he had purchased from Home Depot. Another customer found three kilograms of cocaine and about 40 pounds of marijuana inside another vanity he had purchased. In this case the street value of the drugs was nearly $250,000. A third customer also found a large amount of illegal drugs inside merchandise he had purchased from Home Depot as well.

Searches by law enforcement at stores throughout the state of Massachusetts uncovered additional cases where drugs were found in Home Depot merchandise. Law enforcement had found that the merchandise containing the drugs had originated from Texas and were distributed to the stores from a warehouse in Massachusetts. They believed that the merchandise was supposed to be intercepted and the drugs removed beforehand, but either the person was not on duty or the packages had been mislabeled. Home Depot announced its intent to fully cooperate with law enforcement.^*

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 to offer employment to athletes that fully allowed for 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. Home Depot's support of La Raza has caused criticism of their hiring practices and advocation of the increasing Mexican and Latin American presence in the United States. 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 Joe Gibbs Racing. NASCAR driver Tony Stewart drives The Home Depot #20 Chevrolet Monte Carlo SS. (From 2002-2003, Gibbs was also a minority partner in the Falcons, thanks to Blank.)

Home Depot Canada

Home Depot Canada is the Canadian unit of Home Depot and one of Canada's top home improvement retailers. The Canadian operations consists of more than a hundred stores and employs over 23,000 people in Canada.

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.

External links

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