The Home Depot Inc. Overview

The Home Depot Inc.

Introduction

The Home Depot Inc. (Home Depot) is a retailer of home improvement products. It provides a range of goods, including furniture, appliances, hardware, electrical goods, kitchen and bathroom products, flooring and paint goods, and lawn and garden products for both indoor and outdoor use. The business provides a number of services, such as installation services, home delivery, e-retail, and credit card services. HDX, Husky, Hampton Bay, Home Decorators Collection, Glacier Bay, Vigoro, Everbilt, The Home Depot, LifeProof, and PetProof are just a few of the names that Home Depot sells its goods under. It sells its goods on a number of e-commerce websites, including blinds.com, thecompanystore.com, homedepot.com, homedepot.ca, and homedepot.com.mx. The business has operations in the US, Canada, and Mexico. Atlanta, Georgia, in the US, serves as the company’s headquarter.

History

In 1978, Bernard Marcus, Arthur Blank, Ron Brill, Pat Farrah, and Ken Langone joined forces to co-found The Home Depot. The Home Depot’s plan was to construct home improvement centers that would be much larger than those of their rivals. Ken Langone, an investment banker, assisted Marcus and Blank in obtaining the required funding.

In 1981, The Home Depot started to expand outside of Georgia into Florida when locations in Hollywood and Fort Lauderdale opened. The Home Depot had 19 locations and approximately $256 million in revenue by 1984. On October 31, 1984, The Home Depot purchased Bowater Home Center from Bowater Inc. for $40 million in order to penetrate the Dallas market. In the middle of the 1980s, The Home Depot’s rapid expansion led to a 42% decline in profitability and a $200 million increase in debt. The Home Depot’s financial problems also contributed to a decline in the stock price. Only 10 locations were opened by The Home Depot in 1986 in an effort to alleviate its financial problems, and a public issue of 2.99 million shares at $17 per helped the company restructure its obligations.

The Home Depot surpassed Lowe’s to become the biggest home improvement retailer in the US in 1989. The Home Depot looked for methods to reimagine its market in the 1990s. The EXPO, a successful installation program for high-quality home renovation products like windows or carpets, was introduced in 1991. Home Improvement 1-2-3, a 480-page book, was released in 1995. The Home Depot bought a 75% part of the Canadian hardware company Aikenhead’s Hardware in 1994 for $150 million. Later, The Home Depot stores replaced every Aikenhead’s Hardware location. Sales of $10 billion were made in 1995 while running 350 stores.

The Home Depot paid $245 million in 1997 to acquire Maintenance Warehouse, a provider of maintenance and repair materials based in San Diego.  The Home Depot bought Maintenance Warehouse because it was a top direct mail marketer of maintenance, repair, and operations goods and could reach customers there. The Home Depot purchased Atlanta-based Apex Supply in 1999. Wholesale wholesaler of plumbing, HVAC, industrial pipe, and fittings is Apex Supply. The Home Depot Supply replaced Apex Supply and Maintenance Warehouse as the company’s name in 2004.

Home Depot workers in Harper Woods, Michigan, a suburb of Detroit, voted 115 to 42 against joining the United Food and Commercial Workers in a union organizing drive that year. The Michigan location would have been the first Home Depot to offer union representation if the union had prevailed.

Home Depot Direct opened its online furnishings store, 10 Crescent Lane, in September 2005. Soon after, its online lighting store, “Paces Trading Company,” went live. The Home Depot purchased the Home Decorators Collection in the middle of 2006, adding the brand to its Home Depot Direct division.

For $3.2 billion, The Home Depot bought Hughes Supply, the biggest home store in the US, in 2006. To better service customers who buy from other businesses, Hughes Supply was incorporated into The Home Depot Supply. In January 2007, the Home Depot Supply changed their name to HD Supply. Five months later, The Home Depot sold HD Supply to The Carlyle Group, Bain Capital, and Clayton, Dubilier & Rice, a group of three private equity firms (with each agreeing to buy a one-third stake in the division).

The downturn in the housing market in 2008 and 2009 led The Home Depot to announce the layoff of several thousand associates and the closure of 54 stores nationwide, including the entire EXPO Design Center chain. After the layoffs, associates at EXPO were permitted to reapply for jobs at Home Depot, and they did not lose any tenure if they were hired back. Due to the sale of HD Supply and declining revenue at the retained business, sales in the month of February 2009 totaled $71.288 billion, which was more than $20 billion lower than the peak of the previous two years. They continued to close the big-box fashion stores they had in China in 2012, but smaller stores that specialized in custom products and focused on having more intimate interactions with customers and employees continue to operate there.

In September 2014, there was a data breach at the business. The practice of physically entering credit card numbers into computers at the service desk, pro desk, and speciality areas including flooring, kitchen cabinets, appliances, and millwork rather than using POS credit card terminals directly was a major factor in the data leak. Home Depot suspended the practice and gave any customers who asked for it a year of free credit monitoring through AllClearID. On Homedepot.com, there have also been complaints of credit card details being stolen for use in fraudulent transactions.

Home Depot paid P2 Capital Partners, the private equity division of Goldman Sachs, and the management of Interline Brands $1.6 billion to acquire Interline Brands on July 22, 2015. In August 2016, Interline Brands’ website merged with The Home Depot website, completing the integration between the two companies. The Home Depot now owns Interline Brands’ former businesses.

Hanover Direct sold The Company Store’s online business to Home Depot in 2017. The Company Store was established in 1911 and has five physical locations while focusing primarily on catalog and online sales. The arrangement did not cover the five actual locations.

The Home Depot stated in January 2022 that Craig Menear would continue as chairman of the board while resigning as CEO and president on March 1, 2022. Ted Decker, a former executive vice president, took his post.

Operations

The Home Depot Inc. locations are structured warehouse-style, measuring an average of 105,000 ft2 (9,755 m2), and they sell a wide variety of goods. The two biggest Home Depot locations are in Anaheim Hills, California, with 204,000 square feet of space, and Vauxhall, New Jersey, with 217,000 square feet. Bright orange (PMS 165, CMYK 60M100Y, HEX FF6600) is the company color and is used on signage, tools, and employee aprons.

Controversies

Home Depot settled a disability discrimination lawsuit brought by the U.S. Equal Employment Opportunity Commission in September 2012 for allegedly failing to make a reasonable accommodation for a cashier with cancer at its Towson, Maryland, store before allegedly firing her as a result of her illness. In addition to paying $100,000, Home Depot also agreed to provide other relief.

Lead paint

The Home Depot received a fine of almost $20 million in December 2020 for lead paint infractions.  Lead-induced disruption of heme synthesis causes an increase in aminolevulinic acid, which causes lead poisoning to exhibit symptoms resembling those of acute porphyria. The effects of lead poisoning on personality and mental health can endure a lifetime.

Finances

Home Depot is now rated #26 on the Fortune 500 list of the biggest American companies by total revenue.

The business recorded sales of $38.1 billion for the second quarter of 2020, an increase of 23.4% from the same quarter the previous year. For the three-month period (ending August 2), net earnings increased 27% to $4.3 billion. Due to the COVID-19 pandemic, Americans stayed at home more often, which led to an increase in sales. Home Depot reported $33.5 billion in revenue for the third quarter of 2020, which ended November 1. This is an increase of 24% year over year.