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Big-ticket design business had not been profitable for years
The Home Depot Inc. (Atlanta) has announced it will close 48 design stores, including its 34 remaining Expo Design Centers, and exit that part of the business. In addition, it will streamline its support functions. Those two decisions will impact 7000 employees, or approximately 2 percent of the company's total workforce.
In addition to the 34 Expo Design Centers, Home Depot will close five YardBirds stores, two Design Center stores and a seven-location bath remodeling business. The company said the Expo business has not performed well financially and is not expected to anytime soon. Even during the recent housing boom, it was not a strong business. And it has weakened significantly as the demand for big ticket design and decor projects has declined in the current economic environment. Home Depot said continuing this business would divert focus and resources from its core "orange box" stores.
The company said restructuring its support functions will better align its cost structure with the current economic environment. This includes continuing its shift to a region- and district- based support model in various field functions and reducing headcount in administrative functions in the company's store support centers. These support reductions will impact approximately 2000 employees, resulting in a 10 percent reduction in the officer ranks. No customer-facing positions in Home Depot stores will be impacted.
The company has also initiated a salary freeze among all officers, though it will continue to offer merit increases to non-officer associates, as well as earned bonuses and its existing 401k matching contribution for all associates, including officers.
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