Home Depot to close 15 stores
Home Depot will close 15 underperforming stores, the company has announced, and remove 50 future openings from the new store pipeline. The closings will include layoffs of about 1,300 employees.
The closings, at locations in the Midwest and Northeast, will generate approximately $547 million in pre-tax charges in the company’s first quarter. The company will release first-quarter results on May 20.
The stores to be closed are as follows:
• Store no. 2015 in East Fort Wayne, Ind.
• Store no. 2032 in Marion, Ind.
• Store no. 2310 in Frankfort, Ky.
• Store no. 379 Opelousas, La.
• Store no. 2819 Cottage Grove, Minn.
• Store no. 6901 East Brunswick, N.J.
• Store no. 6904 Saddle Brook, N.J.
• Store no. 6171 Rome, N.Y.
• Store no. 3702 Bismarck, N.D.
• Store no. 3874 Findlay, Ohio
• Store no. 3865 Lima, Ohio
• Store no. 4552 Brattleboro, Vt.
• Store no. 4932 Beaver Dam, Wis.
• Store no. 4933 Fond du Lac, Wis.
• Store no. 4913 Milwaukee, Wis.
Home Depot said in a statement it still intends to build 55 new stores this fiscal year, including 36 new stores in the United States.
As for other stores in the works, the company said it has “determined that it will no longer pursue the opening of approximately 50 U.S. stores that have been in its new store pipeline, in some cases for more than 10 years. Accordingly, the company will record a charge of approximately $400 million related to capitalized development costs and ongoing obligations associated with those future store locations.”
“This is a continuation of our disciplined approach to capital allocation that we outlined last year,” said Frank Blake, Home Depot chairman and CEO, in a statement. “We will invest in our core retail business, in this case our existing stores, which drive our most profitable sales. Our capital efficiency model will also provide improved returns for our shareholders through dividends and share repurchase.”
Home Depot added that investments in existing retail stores will continue to include “maintenance, merchandising resets and other initiatives to improve all elements of the customer’s shopping experience.”
The company reiterated that its total capital spending for the current fiscal year is projected to be approximately $2.3 billion, down from $3.6 billion last year.
BlueLinx records $10.6 million loss
Building products distributor BlueLinx Holdings recorded a $10.6 million loss in the first quarter, deeper losses than the $189,000 hit taken by the company in the first quarter last year.
Revenues decreased 25 percent to $716.8 million from $957.1 million for the same period a year ago.
Structural product sales took the biggest hit, with sales down 28.1 percent, while sales of specialty products fell 22.5 percent. Head count reductions in the fourth quarter led to an 8.8 percent decrease in operating expenses, but it wasn’t enough to offset downward pressure from the housing market.
“We remain focused on managing cash flow by tightly managing inventories, receivables and our operating expenses,” said Howard S. Cohen, interim CEO for BlueLinx. “Our company is financially positioned to be able to continue executing throughout this housing downturn.”
Earlier this year, former BlueLinx CEO Steve Macadam announced his resignation, with plans to accept a position CEO with EnPro Industries, a Charlotte, N.C.-based provider of engineered industrial products for worldwide manufacturing industries.
BlueLinx ranked first on the Home Channel News Top 150 Distributors Scoreboard in 2007.
DWR will open New York flagship
Design Within Reach (DWR), the San Francisco-based specialty retailer, has announced plans to open a new flagship store in Manhattan.
The new 4,000-square-foot Studio storefront will be opened in Soho and is planned to feature high ceilings and an open floor plan.
“Our new flagship Studio places DWR in the heart of the world-renowned SoHo shopping district,” said Ray Brunner, CEO of Design Within Reach. “[The location] will provide an improved retail layout with a greater selection of our products on display and much higher visibility and foot traffic.”
The new store will feature design based around New York City subway maps, as well as new fixtures and wall graphics for the chain.
The company will close its existing Soho Studio on May 22 in anticipation of the new launch. Most notably, DWR said it will repurpose that 3,500-square-foot space for a new retail concept to be launched in September 2008.