Blake Defends Nardelli

Atlanta, GA, March 15, 2007--Frank Blake, chairman and CEO, Home Depot, defended predecessor Bob Nardelli on Wednesday against criticism he received over the company's lagging stock price and even referred to him as a mentor, but Blake was quick to point out the two have differences.

He also told business leaders at a gathering of the Metro Atlanta Chamber of Commerce that the world's largest home improvement store chain has no plans to take the company private.

Blake said he learned a lot from Nardelli, who resigned in January after six years at the helm of Home Depot.

"Bob Nardelli was a hugely important mentor to me," Blake said.

He added that Nardelli was good at setting a target and staying on strategy, no matter what.

As for the Atlanta-based company's stock price, which has declined further since Nardelli left, Blake said, "Bob got a lot of unfair criticism on this."

The defense of Nardelli was striking in that Blake and Home Depot have sought to distance themselves from the Nardelli era since Blake took over. Blake has tried to have a closer relationship with employees, and the company has said it is considering selling its Home Depot Supply unit, which Nardelli had seen as a growth vehicle.

After his talk at the chamber meeting, Blake was asked by a reporter about his defense of Nardelli in light of the shift in strategy he is implementing at the company.

"We're different people," Blake said. "But that doesn't mean I don't have a lot of respect for him."

On other subjects, Blake told the audience that Home Depot has no intention of selling out to private equity groups and taking the company private. Some observers have suggested the company should think about privatization to provide bigger returns for shareholders.

"We're not thinking about going private," Blake said. "We're pleased with our corporate structure. When we look at the amount of investment we need to make in our business and we think about the long-term, we're very pleased to be a public company."

Blake added that Home Depot has no intention to move its headquarters out of Atlanta.

He also said Home Depot is looking at possible international expansion opportunities in India.

"That's a market opportunity we're looking at," Blake said, though he noted that regulatory obstacles would not allow Home Depot to run a retail operation there currently. The company has 12 stores in China.

Blake added that the company will hold its annual shareholder meeting May 24 in Atlanta. Last year's meeting, which was presided over by Nardelli, was held in Wilmington, Del. The company was widely criticized for the tone of the meeting, at which Nardelli didn't allow general questions to be asked, and the board of directors did not attend.

Blake said the full board will be in attendance at this year's meeting.

Blake also addressed customer service concerns that have continued despite improvements Home Depot has made.

He said Home Depot still has work to do, especially in catering to female customers. He acknowledged studies showing that some women feel more comfortable shopping at rival Lowe's.

Blake said Home Depot is working to "set a standard of cleanliness in our stores" and win back customers that may have shifted to its competition.

To show he's serious about addressing customer concerns, Blake responded to critical comments about Home Depot's customer service that were posted on an MSN message board.

"There's no way I can express how sorry I am for all of the stories you shared," Blake wrote in a message posted Tuesday on the Internet board. "I recognize that many of you were loyal and dedicated shoppers of The Home Depot ... and we let you down. That's unacceptable."

He added that the company has taken steps to address the concerns.

"But the real judge of all of these changes we're making is you," Blake wrote. "All I ask is that you please give us the opportunity to win you back."