Blake: No Decision On Selling HD Supply

Atlanta, GA, March 23, 2007—Frank Blake, Home Depot's CEO said that the company hasn't decided what to do with its wholesale distribution arm, despite its announcement last month that it would consider selling the unit.

Blake speaking to a Merrill Lynch retailing conference in New York said the company is simply considering alternatives for Home Depot Supply.

"We have not decided one way or another what to do with the supply business," Blake said.

The company said February 12 that it was considering shedding the division - which serves contractors, home builders and other business customers--so it could focus on its core retail business. Some investors figured then that the supply unit would be sold, and they immediately speculated about how much the unit could fetch for Home Depot.

Since then, Blake has suggested at various public events that Home Depot Supply is not necessarily gone just yet.

He was especially firm on the issue Thursday, telling a questioner that the premise that Home Depot will definitely sell the unit is wrong.

"The right thing to do in my mind is to see what are the alternatives out there before we start the integration of the business," Blake said. "I believe we owe to our associates some degree of transparency about what we are doing."

Home Depot has not said whether it has gotten any offers for Home Depot Supply. Blake did not address that issue following his speech at the conference.

Some analysts have said the decision to possibly sell Home Depot Supply could benefit the company by allowing it to focus on generating value for shareholders, while others have suggested it could put the onus back on the company's retail side, where it faces tough competition from Lowe's Cos. (LOW).

Home Depot Supply was a big focus of future growth for former Home Depot Chief Executive Bob Nardelli, who resigned in January after six years as head of the company.

Since taking over, Blake has sought to make some changes and to prove to Wall Street that the company is serious about improving customer service at its more than 2,000 retail stores in the United States, Canada, Mexico and China.

Blake said Thursday that making stores cleaner and improving the shopping experience is a major focus for Home Depot.

"We are making major investments in store maintenance," he said.

He reiterated that 2007 will be a difficult year for the company, but he said he is confident Home Depot will reach its goal of regaining market share that it has lost.