Home Depot narrows focus, shutters Landscape Supply stores

ATLANTA —The Home Depot will continue its back to basics push this fall when it closes its 11-store Landscape Supply division. The closings are the latest in a series of moves Home Depot has made this year to focus resources on its core stores. It plans to shutter its 11 stores in Atlanta and Dallas by the end of November.

The concept stores, which sell a large mix of lawn and garden supplies, debuted in 2002, but never really gained momentum. “There are no plans to expand the concept,” said Home Depot spokesman Ron DeFreo in explaining the decision to close the stores. Home Depot plans to hold job fairs for the 380 workers employed by Landscape Supply to help them transition to other careers.

Shuttering Landscape Supply is a relatively minor move, but it indicates that Home Depot is serious about eliminating extraneous retail ventures to focus on its 2,200 core home improvement stores that are still profitable. Home Depot posted $1.5 billion in earnings in its most recent quarter ended July 29, despite a 5.6% decline in same-store sales.

“Landscape Supply and other things like its Flooring Centers were experiments that never really panned out,” said analyst George Whalin, president of Retail Management Consultants. “So they’re just cleaning up things that they tried under the former ceo [Bob Nardelli].”

Home Depot shuttered its Floor Store call center and seven Floor Store showrooms in Texas and Florida in March, resulting in the loss of more than 600 jobs. The stores sold carpeting, tile and wood flooring, but never grew beyond its two-state testing ground in the seven years it was around.

In August, Home Depot completed the sale of its HD Supply unit to three private equity firms for $8.5 billion, a price that was reduced from an original offer of $10.3 billion. The division catered to contractors and other building professionals and had been expanding as recently as 2006 when Home Depot bulked up the division with the $3.2 billion purchase of Hughes Supply. However, the housing slump made the division a burden to the chain and therefore expendable.

The only remaining concept stores for Home Depot are its 33 Expo Design Centers, and even those have been scaled back. The chain had 54 Design Centers at the start of 2006, but closed 15 and converted 5 others into basic stores last year.

Though it’s been wrapping up loose ends, Home Depot has no plans to close any standard stores this year. Ceo Frank Blake said in September that “we’re not going to shut stores to save costs,” though he did acknowledge the housing slump may last longer than expected. He added that the chain also has no plans to reduce its work force.

While Home Depot hasn’t announced plans to close any of its basic stores, Whalin believes that may change in the coming months. “A lot of its stores have to be under-performing and I think they’ll eventually have to close some of them.”