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15 Home Depots to be shuttered

May 02, 2008|From Bloomberg News

Home Depot Inc. said Thursday that it would close 15 stores at a cost of 1,300 jobs and scrap plans for 50 new stores as the U.S. housing slump cripples sales.

The company's stock had its biggest gain in a month after saying it would slow expansion of floor space to 1.5% next year from 2.5% this year. The Atlanta-based chain maintained its forecast for a decline in earnings per share of 19% to 24% this year.

Since taking over in January 2007, Chief Executive Frank Blake sold the company's commercial-builder unit and closed landscape and floor outlets to focus on retail stores, where customer service trails that of Lowe's Cos.

Shares of Home Depot rose $1.07 on Thursday to $29.87. The moves will cost Home Depot $586 million, mostly in the first quarter.

Home Depot has now announced three rounds of job cuts this year. Of the 1,300 store jobs being cut this time, 50 are managers and assistant managers. None of the stores being shuttered are in California.

The retailer employs about 331,000 people, two-thirds of them full-timers. Home Depot had 2,193 stores, not including design and specialty centers, at the end of 2007. Of those, all but 243 were in the U.S. The company boosted its store square footage last year by 4.9%.

The retailer said in February that fourth-quarter profit fell 27% and forecast earnings below analysts' estimates after the deepest housing slump in a quarter century showed no sign of receding.

Lowe's, the second-largest U.S. home-improvement retailer, also is scaling back expansion plans.

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