Home Depot Looking At Europe, Asia

Atlanta, GA, Sept. 2--As Home Depot expands in Mexico and Canada, it's keeping an eye on Europe and Asia for future international opportunities, according to the Atlanta Journal-Constitution. Expansion into Europe and Asia isn't imminent, but America's largest home improvement retailer could be forced to consider opportunities there as its growth potential in the U.S. shrinks. In addition to offering another avenue for growth, successful international expansion would set Home Depot Chairman and Chief Executive Bob Nardelli apart from his predecessors. Co-founders Arthur Blank and Bernie Marcus led the company into Chile and Argentina, but Home Depot pulled out of the countries after failing to establish a successful business. Nardelli said he has no plans to make international expansion his legacy at Home Depot, but it would accomplish the third part of his stated strategy of "enhancing the core, extending the business and expanding the market." International expansion also offers Home Depot an advantage in its battle with Lowe's for dominance in retail's home improvement category. While Home Depot builds stores in Mexico and Canada, Lowe's has no current plans to go international, said Robert Niblock, president of Lowe's. The firm must first expand in new markets such as Chicago and enter cities such as Milwaukee and Minneapolis, he said. "We've just got such phenomenal opportunity here in the U.S. that we think from our shareholders' standpoint our best focus over the next several years is really to focus on continuing our proven expansion program and leave international and those other things off into the distance for the time being," Niblock said. Home Depot, however, is talking of expanding beyond North America. Should Home Depot decide to establish a foothold on a second and third continent, it likely would do so by acquisition in Europe and by "green-field," or ground-up, development in Asia, Nardelli said. "Just like the move into Mexico, whether it's in Europe or Asia, or more in Mexico, it is going to be a market-driven--it is going to be a financially evaluated decision," Nardelli said. Home Depot entered Mexico via its 2001 acquisition of the four-store Total HOME chain. It now has 15 stores in Mexico. In Canada, Home Depot has 96 stores. It entered the Canadian market in 1994, when it acquired 75 percent of Aikenhead's Home Improvement Warehouse for about $162 million. It's the possibility of Home Depot buying a European home improvement chain that's created a buzz on Wall Street. Several analysts believe Home Depot has had discussions with Britain's Kingfisher PLC about acquiring the do-it-yourself retailer, whose B&Q Warehouses were modeled on Home Depot stores. In July, Nardelli met with Kingfisher CEO Gerry Murphy in the U.S. "We do not believe a deal is currently in the works between (Home Depot) and Kingfisher, but longer term we can see the rationale for a hookup between the two," said Michael Baker, an analyst at Deutsche Bank Securities. Home Depot's alternative growth strategies, such as the Home Depot Expo format and Landscape Supply, either have struggled or are not large enough to have a major impact, he said. "We believe the primary driver to a potential combination would be (Home Depot's) lack of compelling growth opportunities in the U.S. as the potential for additional `orange boxes' inevitably slows," Baker said. Nardelli downplayed his meeting with Kingfisher's CEO. In fact, Nardelli said Kingfisher executives met with several other retailers during their recent trip. "They were looking for best practices," Nardelli said. "This was not something unique to Home Depot." Still, Europe's $100 billion home improvement market is hard to ignore.

Other Archived Articles

Housing Markets Improving at a Gradual Pace   Full Article
Washington, DC, Nov. 6, 2014 -- Markets in 59 of the approximately 350 metro areas nationwide returned to or exceeded their last normal levels of economic and housing activity in the third quarter.

Planned Job Cuts Surge in October   Full Article
Chicago, IL, Nov. 6, 2014 -- Planned job cuts jumped 68% in October to the second-highest total this year, according to outplacement consultancy Challenger, Gray & Christmas.

Initial Jobless Claims Fall Again   Full Article
Washington, DC, Nov. 6, 2014 -- Initial claims for unemployment benefits fell by 10,000 to 278,000 in the week ended Nov. 1, the Labor Department said

Grosser Named Tile Person of Year   Full Article
San Antonio, TX, Nov. 6, 2014 -- Tile Council of North America presented its Tile Person of the Year award to Donato Grosser at the Total Solutions Plus event.

NWFA Renews Agreement With Wildlife Fund   Full Article
St. Louis, MO, Nov. 6, 2014 -- The National Wood Flooring Association said it has renewed its Memorandum of Understanding with the World Wildlife Fund.

Tarkett Hosts Second Sustainability Summit   Full Article
Chagrin Falls, OH, Nov. 6, 2014 -- Tarkett recently hosted its second annual Sustainability Summit in Cleveland, Ohio.

Gerflor Acquires Connor Sport Court   Full Article
Chicago, IL, Nov. 5, 2014 -- Gerflor said it has acquired Connor Sport Court of Amasa, Michigan.

Armstrong Illinois Plant Wins Sustainability Award   Full Article
Lancaster, PA, Nov. 5, 2014 -- Armstrong Flooring said its Kankakee, Illinois manufacturing facility has received the 2014 Illinois Governor’s Sustainability Award.

Services Sector Continues To Grow in October   Full Article
Washington, DC, Nov. 5, 2014 -- The services sector of the economy continued to expand in October but at a slower pace, according to the Institute for Supply Management.

Mortgage Applications Fall Last Week   Full Article
Washington, DC, Nov. 5, 2014 -- Mortgage application volume fell last week as interest rates increased, according to the Mortgage Bankers Association.

Businesses Add 230,000 Jobs in October   Full Article
Roseland, NJ, Nov. 5, 2014 -- Private employers added 230,000 jobs in October, payroll processor ADP said.

Earthwerks Names Head of Product Development   Full Article
Houston, TX, Nov. 5, 2014 -- Earthwerks has named Lindsey Nisbet head of product development and marketing strategy.

Linron Names de Beaumont VP Business Development   Full Article
Houston, TX, Nov. 5, 2014 -- Linron Co. has named Gilles de Beaumont, vice president of business development.

Domotex Asia Anticipates Larger Wood, Laminate Area   Full Article
Shanghai, China, Nov. 4, 2014 -- It will require four dedicated halls to house just the wood and laminate exhibitions at Domotex asia/Chinafloor’s 17th annual flooring show March 24-26 in Shanghai, organizers said.

Factory Orders Decline in September   Full Article
Washington, DC, Nov. 4, 2014 -- New orders for manufactured goods fell for second straight month in September on softness in the aircraft sector.

Lexmark Names Wellman Director of Architecture, Design   Full Article
Dalton, GA, Nov. 4, 2014 -- Lexmark Carpet said that Jennifer Wellman has been named director of architecture and design solutions.

Shaw's Tuftex Wins Cool Planet Award   Full Article
Dalton, GA, Nov. 4, 2014 -- Shaw’s Tuftex Division won the 2014 Cool Planet Award, which recognizes Southern California Edison business customers for demonstrating exemplary leadership in energy and carbon management.

Q.E.P. Completes Acquisition of Flooring Trade Supplies   Full Article
Boca Raton, FL, Nov. 4, 2014 -- Q.E.P. said that it has completed the acquisition of Flooring Trade Supplies, an accessory distributor in Sydney, New South Wales.

Stifel Nicolaus Praises Mohawk's Performance   Full Article
New York, NY, Nov. 3, 2014 -- Analyst Stifel Nicolaus says it continues to recommend the stock of Mohawk Industries with a "buy" rating as Mohawk "continues to execute in a very impressive manner given the slower demand environment across the globe."

Manufacturing Expands at Faster Pace in October   Full Article
Tempe, AZ, Nov. 3, 2014 -- U.S. manufacturers expanded at a faster rate in October, according to the Institute for Supply Management.