The Home Depot
The Home Depot corporate headquarters in unincorporated Cobb County, Georgia
|Traded as||NYSE: HD
Dow Jones Industrial Average Component
S&P 500 Component
Marietta, Georgia, United States
|Headquarters||Unincorporated Cobb County, Georgia, 30339 United States|
Number of locations
|2,274 (February 2016)|
|United States, Canada, Mexico|
(Chairman and CEO)
|Products||Home appliances, tools, hardware, lumber, building materials, paint, plumbing, flooring, garden supplies & plants|
|Revenue||US$83.176 billion (2015)|
|US$10.469 billion (2015)|
|US$6.345 billion (2015)|
|Total assets||US$39.946 billion (2015)|
|Total equity||US$9.322 billion (2015)|
Number of employees
|Slogan||More Saving. More Doing.|
It operates many big-box format stores across the United States (including all 50 U.S. states, the District of Columbia, Puerto Rico, the United States Virgin Islands and Guam), all ten provinces of Canada, as well as Mexico. The company is headquartered at the Atlanta Store Support Center in Cobb County, Georgia, in Greater Atlanta.
In terms of overall revenue reported to the U.S. Securities and Exchange Commission, the company is the largest home improvement retailer in the United States, ahead of rival Lowe's. The store operates out of large warehouse-style buildings averaging 105,000 ft2 (9,755 m2) with megastores operating in larger facilities (the company's largest store, located in Vauxhall, New Jersey is 225,000 ft2).
- 1 History
- 2 Operation
- 3 Philanthropy
- 4 Environmental record
- 5 Major sponsorships
- 6 Internationally
- 7 Labor union policies
- 8 Controversy
- 9 See also
- 10 References
- 11 External links
The Home Depot was founded in 1978 by Bernard Marcus, Arthur Blank, and Pat Farrah. The Home Depot's proposition was to build home-improvement superstores, larger than any of their competitors' facilities. Investment banker Ken Langone helped Marcus and Blank to secure the necessary capital.
|“||Bernie and I founded The Home Depot with a special vision – to create a company that would keep alive the values that were important to us. Values like respect among all people, excellent customer service and giving back to communities and society||”|
|— Arthur Blank|
In 1979, the first two stores, built in spaces leased from J. C. Penney that were originally Treasure Island "hypermarket" (discount department and grocery) stores, opened in metro Atlanta (in Doraville and on Memorial Drive in Decatur, both near I-285) on June 21. Two more opened not long after, and all four shared the space under the "squiggly" zig-zag roof with Zayre on its right side. The initial public offering occurred in approximately September 1981 and the company became a New York Stock Exchange traded company on April 19, 1984. The first headquarters was on Terrell Mill Road on the southeast side of Marietta, Georgia, just down from one of the stores at the corner of Cobb Parkway. (That store , in the Marietta Plaza strip mall, became Value City, changing to Burlington Coat Factory in 2008; part was also a short-lived Little Bucks, in which Brill had a stake.)
Since the 1990s, its headquarters (high-rise buildings on Paces Ferry Road, on the western edge of the Cumberland/Galleria edge city in unincorporated Cobb County, Georgia, across Interstate 285 from the town of Vinings, and served by mail from Atlanta. The tallest building is approximately 85 metres (279 ft) high, the fourth-tallest in the Vinings area. The three buildings are marked B, C, and D — the "missing" building A is actually store #121 on Cumberland Parkway, which the complex overlooks immediately across I-285.) have been a complex of
In 2000, after the retirement of Marcus and Blank, Robert Nardelli was appointed chairman, president, and CEO.
Nardelli had pushed hard to make the company more efficient, instituting many metrics and centralizing operations, while cutting jobs, benefits, and associate pay to meet quarterly earnings targets. While this initially doubled earnings and reduced expenses, it alienated many of the store managers and rank-and-file store associates, and by extension the customers. Nardelli, who regarded home improvement store-by-store sales as less important due to market saturation from competition such as Lowe's, aimed to dominate the wholesale housing-supply business through building up HD Supply, a unit that Blake sold for $8.5 billion in August 2007 since it was not part of Home Depot's integrated business. In comparison to Nardelli, whose numbers-driven approach never appreciated the role of the store and its associates, Blake's strategy has revolved around reinvigorating the stores and its service culture (engaging employees, making products readily available and exciting to customers, improving the store environment, and dominating the professional contracting business, an area in which Home Depot's closest rivals trail far behind), as he recognized that employee morale is a more sensitive issue in retail compared to other industry sectors like manufacturing.
Its 2005 sales totaled US$91.8 billion (US$77.0 billion in retail sales). Despite the 10% increase in revenue, it dropped three spots to No. 17 on the 2007 FORTUNE magazine's FORTUNE 500 list (it was No. 13 in 2005 and No. 14 in 2006). The Home Depot owned EXPO Design Center, a chain of home decorating and appliance stores, but closed the chain in 2009.
In 2001, it acquired distributor Your Other Warehouse (YOW), which still operates as its own division. In 2006, the Home Depot acquired Hughes Supply which was assimilated into HD Supply serving contractors, which it sold in June 2007. In September 2005, Home Depot Direct launched its online home-furnishings store, 10 Crescent Lane, shortly followed by the launch of Paces Trading Company, its online lighting store. In mid 2006, the Home Depot acquired Home Decorators Collection, which was placed as an additional brand under its Home Depot Direct division. Home Depot Landscape Supply, with only a few stores each in metro Atlanta and Dallas/Fort Worth, was founded in 2002 and closed in late 2007.
On January 2, 2007, the Home Depot and Robert Nardelli mutually agreed on Nardelli's resignation as CEO after a six-year tenure. Nardelli resigned amid complaints over his heavy-handed management and whether his pay package of $123.7 million (excluding stock option grants) over the previous five years was excessive, considering the stock's poor performance versus its competitor Lowe's. His severance package of $210 million was criticized because when the stock went down, his pay went up.
His successor, Frank Blake, previously served as the company's vice chairman of the board and executive vice president. Blake agreed to a much more conservative compensation package than Nardelli, that is very heavily dependent upon the success of the company. Although a longtime deputy to Nardelli at GE and Home Depot, Blake was said to lack Nardelli's hard edge and instead preferred to make decisions by consensus. Indeed, Blake repudiated many of his predecessor's strategies, and it has been reported that the two men have not spoken since Nardelli departed Home Depot.
In 2007, the Home Depot sold its $13 billion revenue wholesale (trade) division, HD Supply, to a consortium of three private equity firms, The Carlyle Group, Bain Capital and Clayton, Dubilier and Rice (with each agreeing to buy a one-third stake in the division). Home Depot sold their wholesale construction supply business to fund a stock repurchase estimated at $40 billion.
In 2008 and 2009, with the downturn in the housing market, The Home Depot announced the layoff of several thousand associates, as well as the closing of 54 stores nationwide, including the entire EXPO Design Center chain. Associates at EXPO were allowed to re-apply for Home Depot jobs after the layoffs, and did not lose any tenure if hired back. In the year of February 2009, sales totaled $71.288 billion, more than $20 billion down from the peak of two years earlier due to the sale of HD Supply and falling revenue at the retained business. In 2012, they proceeded to close the big-box style stores that they had in China, however smaller stores that specialized in custom products and focused on more intimate interactions between customers and associates remain open there.
In August 2014 it was announced that Frank Blake would step down as CEO and would be replaced by 57-year-old Craig Menear. The change occurred on November 1, 2014. Blake would continue with the company as Chairman. Menear joined The Home Depot in 1997, and served in various management and vice-presidential positions, until 2003, including Merchandising Vice President of Hardware, Merchandising Vice President of the Southwest Division, and Divisional Merchandise Manager of the Southwest Division. He subsequently served as Senior Vice President of Merchandising from August 2003 to April 2007. He then served as an Executive Vice President of Merchandising from April 2007 to February 2014. Until becoming CEO, Menear served as President of U.S. Retail from February 2014 to November 1, 2014.
The company had a data breach in September 2014. One major reason for the data breach was the practice of entering credit card numbers directly into computers at the service-desk and pro-desk, and in specialty departments including flooring, kitchen cabinets, appliances, and millwork, rather than using POS credit card terminals directly. The practice was stopped and Home Depot offered a year of free credit monitoring through AllClearID for any customers who requested it. There were also reports of credit card numbers being stolen when used to make purchases on Homedepot.com.
Home Depot stores average 105,000 ft2 (9,755 m2) in size and are organized warehouse-style, stocking a large range of supplies. Home Depot's two largest stores are located in Union, New Jersey, which encompasses 217,000 ft2 of space, and in Anaheim Hills, California where it encompasses 204,000 ft2. The company color is a bright orange (PMS 165, CMYK 60M100Y, HEX FF6600), on signs, equipment and employee aprons. It was announced in August 2014 that Craig Menear will take over for Frank Blake as CEO while Blake will remain the chairman of the board.
Board of directors
Current members of the board of directors of the Home Depot are: F. Duane Ackerman, David H. Batchelder, Frank Blake, Ari Bousbib, Gregory D. Brenneman, Albert P. Carey, Armando Codina, Bonnie G. Hill, and Karen Katen. The Home Depot's board consists of 9 members, with 8 of them being independent directors.
The slogan "More saving. More doing." was introduced by The Home Depot in the March 18, 2009 circular, replacing "You can do it. We can help." which had been used since 2003. Other slogans used in the past 25 years include "The Home Depot, Low prices are just the beginning" in the early 1990s and "When you're at the Home Depot, You'll feel right at home" in the late 1990s and "The Home Depot: First In Home Improvement!" from 1999–2003.
US Stores division
Long-time employee Marc Powers became the head of Home Depot's US stores division in 2014. He took the place of Marvin Ellison, who left to become the chief executive of J.C. Penney. In January, 2016 Home Depot announced the departure of Powers as division head, to be replaced by another veteran employee, Ann-Marie Campbell, one of Powers' deputies. The change in leadership is effective as of February 1, 2016. Ms. Campbell has been employed by Home Depot for over 30 years, beginning as a cashier in a branch in South Florida. Her most recent role was as president of Home Depot's northern and western divisions.
The domain homedepot.com attracted at least 120 million visitors annually by 2008 according to a Compete.com survey. In the US HomeDepot.com has 5 Call centers located in Kennesaw, GA; Atlanta, GA; Marietta, GA; Ogden, Utah and Tempe, AZ.
The Home Depot exclusively carries several major brands, including:
- Chem-Dry (carpet cleaning, upholstery cleaning, tile and grout services)
- Behr paints
- Rheem (water heaters)
- Homelite (outdoor and power tools)
- Martha Stewart Living Omnimedia (outdoor furniture, indoor organization)
- Ryobi and Ridgid (power tools)
- American Woodmark cabinetry
- Thomasville Furniture Industries cabinetry
Additionally, the retailer has its own house brands:
- Husky (tools)
- Workforce (tools, shelving, storage cabinets, extension cords, worklights, tarps, paintbrushes)
- Glacier Bay (kitchen sinks, faucets, etc.)
- Hampton Bay (ceiling fans, lighting, outdoor furnishings, and outdoor shelters)
- Commercial Electric
- Home Decorators Collection
In 2006, the Home Depot started testing fuel centers at some of its stores. The first such "Home Depot Fuel" convenience store (C-Store) was located in Brentwood, Tennessee followed a month later by a center about 20 miles (32 km) away in Hermitage, both suburbs of Nashville. Four additional prototype stores were built within the year at Acworth, Georgia; Smyrna, Tennessee; Greensboro, Georgia; and then Winchester, Tennessee in that order. The centers were expected to earn $5–$7 million per year, though the actual number was reported to be much higher. The fuel centers sell beer, hot food, and snacks along with providing diesel fuel and gas at a separate island. This allows contractors with large trucks to be able to fill their vehicles. The fuel centers offer car washes, which are large enough to accommodate full-size pickup trucks and other large commercial vehicles.
The Home Depot Foundation is the philanthropic arm of the company created in 2002. It has contributed over $200 million in time, labor, money, and supplies to a number of causes, including Habitat for Humanity, California-based City of Hope National Medical Center, and playground construction organization KaBOOM! Home Depot supports the U.S. Military community with a 10% military discount.
The Home Depot has partnered with the Georgia Emergency Management Agency's Ready Georgia campaign, leading both supplies and facility use to this statewide effort to increase emergency preparedness among Georgia's children. The company also provided ready kits and other prizes for an art and essay contest for Georgia elementary school students.
The Home Depot has stated on their website that they have a commitment "to the environment and pledge to continue to be an industry leader in looking for products and services that are respectful of our world". The Home Depot introduced a label on nearly 3,000 products in 2007. The label promotes energy conservation, sustainable forestry and clean water. Home Depot executives said that as the world's-largest buyer of construction material, their company had the power to persuade thousands of suppliers, homebuilders and consumers to follow its lead on environment sustainability. "Who in the world has a chance to have a bigger impact on this sector than Home Depot?" asked Ron Jarvis, vice president for environmental innovation at Home Depot. This program is following The Home Depot's promise in the late 1990s to eliminate the number of sales of lumber from endangered forests in countries including Chile and Indonesia. Home Depot has since worked with environmental groups to create a variety of green programs. For example, Home Depot planted thousands of trees at its headquarters in Atlanta to offset carbon emissions. In 2007, The Home Depot Foundation (the company's charitable foundation) committed to investing $100 million over the next decade to build over 100,000 green affordable homes and plant 3,000,000 trees.
Additionally, The Home Depot promotes compact fluorescent light bulbs in its stores. As part of this effort, the company created the largest recycling program in the United States for the bulbs. In March 2013, Home Depot locations in Canada stopped accepting compact fluorescent light bulbs for recycling.
Since 1991, the company has become a large supporter of athletics, sponsoring the United States and Canadian Olympic teams, and launching a program which offered employment to athletes that accommodates their training and competition schedules. The Home Depot ceased to be a sponsor of the Canadian Olympic Team in 2005.
Since 1999, The Home Depot has been a major sponsor for Joe Gibbs Racing in NASCAR. Their arrival into the series coincided with Tony Stewart leaving the Indy Racing League to join what is now the Sprint Cup Series. Stewart drove The Home Depot-sponsored #20 car for Joe Gibbs Racing until 2008, winning 2 of his 3 series championships in the car, and was succeeded by Joey Logano, who took the car to victory lane twice. After Matt Kenseth joined the team, The Home Depot's status as the #20's primary sponsor was taken over by Dollar General, but the company still served as its most frequent secondary sponsor through its Husky Tools division. On June 23, 2014, the company announced it would end its NASCAR sponsorship after 2014.
The Home Depot was the title sponsor of The Home Depot Center in Carson, California, home to both the Los Angeles Galaxy and Chivas USA of Major League Soccer, and Los Angeles Riptide (Major League Lacrosse), and many past major sporting events. The venue is now called StubHub Center.
In 2006, The Home Depot partnered with Duke University's Edmund T. Pratt Jr. School of Engineering to create "The Home Depot Smart Home". The smart home is a live-in laboratory for ten upper-class engineering students that allows them to immerse themselves in the work. The goal of the project is to help provide innovative solutions for the home in areas such as security and home monitoring, communications, energy efficiency, entertainment, environment and health.
In January 2007, The Home Depot became the official Home Improvement sponsor of ESPN's College Gameday.
Seventy-three percent of The Home Depot's campaign contributions went to Republican candidates in the 2005–2006 US elections. "Home Depot's PAC gives money based on a candidate's voting record, committee assignment and leadership position," said company spokesman Jerry Shields. The CEO in this period was Bob Nardelli, a friend of U.S. President George W. Bush. Nardelli hosted a garden reception/fundraiser for Bush at his Atlanta home on May 20, 2004.
Home Depot Canada is the Canadian unit of the Home Depot and one of Canada's top home improvement retailers. The Canadian operation consists of 182 stores and employs over 28,000 people in Canada. Home Depot Canada has stores in all ten Canadian provinces and serves territorial Nunavut, Northwest Territories, and Yukon through electronic means (Online Sales). The Canadian head office is located in Toronto.
The Canadian unit was created with the purchase of Aikenhead's Hardware. Home Depot management has an ambitious plan to overtake its biggest competitor, RONA, which has about four times as many stores. However, some of RONA's stores are smaller than the typical Home Depot store. In terms of big box stores, the Home Depot has more stores than RONA, (not including other Rona banners such as Réno Dépôt or Cashway). As of 2007, RONA pulled ahead of The Home Depot in total retail sales, due to aggressive consolidation efforts by RONA, combined with the loss of The Home Depot's industrial supply division, HD Supply, in July 2007. The Home Depot now faces competition from Lowe's as they have moved into the Canadian market effective the end of 2007; Lowe's now has 35 outlets in Canada.
The Home Depot banner in Quebec, where it has 22 stores, reads "Home Depot" without the definite article "the" in order to ensure a more cross-compatible proper name (that does not read like an English sentence) between both the French and English languages. However, Home Depot is still in English and not in French, which would be Entrepôt de la maison.
The Home Depot operates 106 stores in Mexico and has become one of the largest retailers in Mexico since it entered the market in 2001. The Home Depot increased its presence in Mexico in 2004, with the acquisition of Home Mart, the second largest Mexican home improvement retailer.
The Home Depot Mexico employs more than 11,000 associates throughout the country and has an annual growth rate of 10 percent.
In December 2006, the Home Depot announced its acquisition of the Chinese home improvement retailer The Home Way. The acquisition gave the Home Depot an immediate presence in China, with 12 stores in six cities.
Beginning of April, 2011, Home Depot recently shut its last Beijing store, the fifth Home Depot to close in China in the past two years. In September 2012, The Home Depot announced it was closing all big box stores in China. The Home Depot retains two specialty stores in China, a Home Decorators Collection Store and a paint and flooring store.
As of September 16, 2012 all seven of the box stores in China had been shut down. The Home Depot has no immediate plans to further expand its specialty stores in China. The company is taking a "wait-and-see" attitude towards the Chinese market, but does not want to completely pull out because re-entry into the market would be very costly.
The Home Depot's lack of success in China has been attributed to the disconnect between The Home Depot's do-it-yourself ethos and Chinese culture. In 2012, the Home Depot conceded that it misread the country's appetite for do-it-yourself products. As a spokeswoman for the company said in an interview with the Wall Street Journal, "The market trend says this is more of a do-it-for-me culture". Culturally, manual labor is seen as an activity for lower-class citizens, and some have speculated that The Home Depot could have capitalized on this by offering a do-it-for-me model to Chinese consumers. Chinese consumers prefer to see a finished product, such as a renovated room, rather than light bulbs and lumber. Ironically, the same issue does not exist outside of China, especially in Canada where Chinese Home Depot advertisements and store signage can be found in areas with large Chinese demographics.
There were reports that the Home Depot was interested in acquiring B&Q, the largest DIY retailer in the United Kingdom, Ireland and China. Speculation of a takeover began in 1999 when the retailer Asda was purchased by Walmart. The Home Depot would have to acquire Kingfisher plc, B&Q's parent company, to acquire B&Q. Kingfisher consists of several European DIY chains, however the Home Depot was only interested in B&Q operations and says that it would dispose of the Castorama chain which operates in France, Italy, Poland and Russia. Talks ending in 2005 did not result in any takeover deal.
In 1997, Home Depot entered the Chilean and Argentine markets. While the venture was viewed with great optimism by founders Bernard Marcus and Arthur Blank, it eventually proved unprofitable. In October 2001, Chilean partners Falabella bought out Home Depot's share of the five Chilean Home Center stores and rebranded them Home Store. In 2003, after merging with Sodimac, all stores adopted that brand. The company has since expanded across Latin America very profitably and successfully. It's currently the N°1 Home Improvement company in South America. In 2002,Argentina's Home Depots were bought out by Chilean company Cencosud and rebranded Easy stores, a company that has also expanded across South America. It's currently the N°2 Home Improvement company in South America.
Labor union policies
In 2004, Home Depot workers at a suburban Detroit store in Harper Woods, Michigan, rejected a bid to be represented by a labor union, voting 115 to 42 against joining the United Food and Commercial Workers. If the union had won, the Michigan store would have been the first Home Depot to have union representation.
The Home Depot was embroiled in whistleblower litigation brought under the Sarbanes-Oxley Act (SOX) law. In July 2005, former employee Michael Davis, represented by attorney Mark D. Schwartz filed a whistleblower lawsuit against the Home Depot, alleging that his discharge was in retaliation for refusing to make unwarranted backcharges against vendors. Davis alleges that the Home Depot forced its employees to meet a set quota of backcharges to cover damaged or defective merchandise, forcing employees to make chargebacks to vendors for merchandise that was undamaged and not defective. The Home Depot alleges that it fired Davis for repeatedly failing to show up for work.
The trial initially was concluded in June 2006, but in April 2007, U.S. Department of Labor Judge Pamela Lakes Wood ordered the case reopened after the Home Depot's law firm Akin Gump Strauss Hauer & Feld revealed that the retail giant's in-house counsel had told them that two Home Depot employees who testified at the trial had lied. Akin Gump sent Wood a letter on September 29, 2006, in which the law firm requested that the testimony be stricken. In response to Akin Gump's revelation, Davis' attorney Mark D. Schwartz asked for the case to be reopened to permit further questioning of the witnesses. On April 6, 2007, Wood ordered the case to be reopened.
Schwartz was quoted by the New York Post as saying, "I have reason to believe these witnesses were intimidated into giving false testimony." The Home Depot called Schwartz's allegations "meritless".
Home Depot has settled the dispute in a stipulation of settlement dated March 28, 2008. In the settlement, Home Depot changed some of its corporate governance provisions. Home Depot also agreed to pay the plaintiff's counsel $6 million in cash and $8.5 million in common stock.
Patent law controversy
Powell v. Home Depot USA, Inc. (2008cv61862) (2011) was a decision by the United States District Court for the Southern District of Florida concerning patent infringement on a “safe hands” device that Michael Powell, an independent contractor for Home Depot, created in response to injuries to the hands of associates using in-store radial arm saws. The District Court jury returned a verdict in favor of Powell.
In 2011, Home Depot appealed the decision to the United States Court of Appeals for the Federal Circuit, challenging the district court’s denial of its renewed motion for judgment as a matter of law on the issues of infringement, willfulness, and damages. They also challenged the district court’s claim construction, inequitable conduct, and attorney fees determinations. The appellate court found no inequitable conduct and insufficiently egregious misconduct on the part of Powell’s attorney.
Tilt up construction design of stores
In the wake of the 2011 Joplin tornado in which the walls of a Home Depot collapsed in Joplin after being hit by an EF5 tornado, The Kansas City Star citing engineers criticized Home Depot's practice of using tilt up construction in hundreds of its big box stores (other nearby big box stores in Joplin including a Walmart and Academy Sports which had a different concrete block construction lost their roofs but the walls remained intact). In tilt up construction the concrete is poured on site and lifted into place and then attached to the roof. The engineers told the Star that the practice while normally safe and efficient is dangerous in major storms because once the roof is lifted (as happened in Joplin) the walls collapse in a domino effect. Seven people were killed in the front of the store when the 100,000 pound walls collapsed on them while 28 people in the back of the store survived when those walls collapsed outward. Only two of the slab walls in the Home Depot survived. In contrast 3 people died in the Walmart but 200 survived. Engineers noted that when concrete blocks construction fail, it breaks in pieces and usually not in huge slabs. Home Depot said it fundamentally disagreed with the Star engineers and said it would use tilt up construction when it rebuilds the Joplin store.
Home Depot payment system breach
On September 2, 2014, security news reporter Brian Krebs reported that he was seeing evidence of credit card numbers linked to Home Depot purchases being sold online, which he concluded to suggest that The Home Depot's payment systems were breached by hackers. On September 8, 2014 Home Depot confirmed that their payment systems were compromised. According to their press release, this breach affected any customers who made purchases at any Home Depot store from April 2014 to September 2014. Home Depot offered their affected customers free one-year credit monitoring service from AllClear ID. Also in their press release, they made sure to emphasize that there was no evidence to suggest that online customers were affected by the breach. On September 18, 2014, Home Depot released a statement saying that the hackers obtained a total of 56 million credit card numbers as a result of the breach. Since the breach, Home Depot has rolled out new encryption technology for their cash registers and self-checkout systems to protect customers. A class action lawsuit was filed against the company.
In March 2016 Home Depot agreed to pay at least $19.5 million dollars to compensate the more than 50 million consumers affected. The settlement terms included a $13 million fund to reimburse shoppers and a $6.5 million million fund for cardholder identity protection services.
EEOC disability discrimination suit
In September 2012, Home Depot, agreed to pay $100,000 and furnish other relief to settle a disability discrimination lawsuit filed by the U.S Equal Employment Opportunity Commission, for the alleged failure to provide a reasonable accommodation for a cashier with cancer at its Towson, Maryland, store and then for purportedly firing her because of her condition.
- Lowe's, another American home improvement and construction product services, which competes with The Home Depot in the United States, Canada and Mexico.
- Home improvement
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