Report: Flooring Scandal Hits Home Depot

Atlanta, GA, August 1, 2007-- Four merchandising managers at The Home Depot Inc. have been fired for allegedly accepting kickbacks totaling as much as $1 million to supply stores with flooring products bought from certain foreign vendors, the company said Tuesday.

Jerry Shields, a spokesman for Home Depot, described the three men and one woman as lower-level managers. They were terminated two weeks ago for "not following company ethics and business conduct," Shields said.

He could not say how long the employees had worked for Home Depot. The products involved tile and other flooring made by foreign vendors, Shields said, without elaborating. He did not identify the vendors other than to say they were based in Asia. The employees were not identified.

Home Depot, the world's largest home improvement store chain, said in a statement that it was cooperating with authorities and the matter was under investigation. It wasn't immediately clear if any criminal charges had been or will be brought.

"It is important to note that this matter does not have a material effect on our consolidated financial conditions or results of operations," Home Depot said. "Maintaining our ethical standards is of utmost importance to The Home Depot and is something we enforce strongly."

According to the Atlanta-based company, an unidentified person brought the matter to the company's attention and it started reviewing the situation immediately. Officials would not identify who the tipster was.

The company said it is believed the employees received as much as $1 million in kickbacks.

Home Depot operates more than 2,000 stores in the United States, Canada, Mexico and China. Besides tile, other types of flooring the company sells include wood and carpeting.