Home Depot’s Blake: time to focus
Atlanta Home Depot CEO Frank Blake was credited with saying all the right things about the world’s largest home improvement retailer when he took over the reins from Bob Nardelli in January. Chief among them was the message of focus on the store and focus on the customer.
In today’s difficult home-improvement market, the focus on the basics of retailing continues, he told Home Channel News.
"A downturn is a painful thing, and all things being equal, you’d just as soon not go through it," he said at the company’s headquarters. "But it also tends to concentrate the mind, so you get to take a look at your business. And it forces you to be much sharper about what makes a difference to your customer and what doesn’t make a difference to your customer."
Earlier this month, the company reported comp-store sales decline of 6.2 percent amid a housing market downturn described as worse-than-anticipated. The company earned $1.09 billion in the quarter ended Oct. 28, down 27 percent from the year-ago period.
In a market where home improvement retailing is being tested, Home Depot is moving away from a jack-of-all-trades approach to business. Blake pointed to a handful of examples. The closing of the company’s floor stores, the shuttering of HD Landscape Supply and the -- the most obvious example -- the sale of HD Supply.
Home Depot is guided by the attitude of focus, he said. "You downscope what you try to do," he explained. "You try to do fewer things better, rather than a lot of things OK."
At the Home Depot Store Support Center, the company's Atlanta headquarters, every day presents opportunities that might lead to revenue and value. "But you have to say, 'that’s not core to our business right now,' " Blake said. "Now is a good time to focus on what we need to focus on -- our core retail company."
For Blake, that focus means the five priorities: associate engagement, store environment, product availability, product excitement and pro-customer engagement. Voluntary employee attrition is down 24 percent, investments in store maintenance are up 2.5 times compared to 2005 levels and supply chain initiative is rolling out in Canada, according to the company.
“I’m really thrilled with the job Craig Menear [executive vp of merchandising] and his merchant team is doing,” said Blake. “We’ve got a merchant running merchandising and that hasn’t been the case here for awhile, and I think that’s starting to make a real difference.”
“Across each one of the priorities we laid out we’ve made some notable progress,” he said. “We still have a long way to go but we’re making progress.”