Home Depot has Money for Buybacks, but not Service?
> Rant mode on:
As I mentioned previously, we moved a few months ago, selling one overpriced house and buying another. This means that I have spent an inordinate amount of my precious sparetime at Home Depot, Lowes, Sears, HD Expo, Fortunoffs, etc.
Missus Big Picture has long ago made her preferences known for Lowes over the Depot. Its brighter, cleaner, better organized, more accessible to the average non-professional/non-contractor shopper.
And while Lowes service is not bad, Home Depot is awful -- almost as bad as Sears, where tumbleweeds roll by in the Hicksville store, and staff -- and customers -- are non-existent.
I've been to the 3 different HD's within 15 minutes of the house (the cannabilization issue is best left for another discussion) -- all hours, days.
The Service isn't bad -- it is simply non-existent. No one in the aisles -- electrical, plumbing, lighting, etc. There's usually someone in paint, but thats only because someone has to mix the colors with the base paint. And a handful of souls watering the plants in outdoors/gardening.
Other than that, Nardelli's legacy -- other than the half a billion dollars he made off -- will have been to eviscerate the vaunted customer service of Home Depot, leaving it an orange, hollow shell.
But $22.5 billion for share buybacks? Here's a suggestion: Undo all of Nardelli's slash & burn firings, or you'll have nothing left -- in terms of revenue and income -- except for the buybacks.
Financial engineering is all well and good, but what about focusing on what made you the pre-eminent home improvement store in the first place?
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I couldn't agree with you more. But what about selling HD Supply for $10b and buying back $22b of stock? Let's see, sell future earnings, then spend that money and more (probably borrowed) taking away from future earnings again.
The future does not look bright at home depot. HD Supply as the WSJ article today said, created a good amount of revenue and more importatnly sales growth.
Short term gain, long term loss.
Posted by: A-Mack | Jun 20, 2007 10:40:38 AM
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