The Big Orange at 30

There’s a point in everyone’s life when it’s time to settle down. Maybe the same time table applies to retail icons.

Having hit its 30-year milestone—Home Depot’s first store opened in Atlanta in June 1979—a corporate maturity and patience seem to have taken hold in the executive suites.

The ambitious ancillary businesses are history. Case in point: Expo Design Center, which folded its upscale tent in February. Before that, the company divested of its collection of wholesale supply houses under the HD Supply banner in 2007.

Ambitious conquests of faraway markets? “I don’t spend a lot of time worrying about our 10 stores in China,” CEO Frank Blake said. (See Q&A)

With merely five store openings in the United States this year, (competitor Lowe’s is planning about 60), Home Depot is playing a new game. It’s no longer focusing on bigger. In difficult times, it’s focusing on better—better service, better systems better efficiencies.

It’s Blake’s challenge to recapture the magic of the 30-year-old company’s glory days. And each year of his reign the company moves closer to its roots as a warehouse home center retailing.

“I don’t expect quick changes,” he said.

Behind the scenes, a major restructuring of the company’s ability to move and track product is at work. A network of rapid distribution centers (RDCs) will bring Home Depot’s supply chain into the 21st century.

More than that, executive VP merchandising Craig Menear told analysts recently that new assortment management tools haven’t nearly approached optimization. “We’re about 25% of the way there,” he said. That might give competitors pause.

As a company, Home Depot grew up fast. At 30, it’s facing one of the greatest challenges: thriving in a tough recession.

The macroeconomic picture is a worry to the chief executive, both as a businessman and as a citizen. That concern is fueled particularly by depressed spending on housing. “Pro sales are under significantly more stress than DIY-oriented sales,” Blake said.

But like any good businessman, he sees signs of improvement—in his business and in the economy. Specifically, sequentially improving comp-store sales in 36 of the company’s top 40 U.S. markets. Stores in the mid-Atlantic and mid-South regions of the country were performing well, and even hard-hit states like California, Florida and Arizona were showing signs of stabilization.

“We’ve made progress in simplifying store operations, and that’s keeping us more focused on what’s important.”

He added: “We have a long way to go.”