Home Depot - History

History

The Home Depot was founded in 1978 by Bernie Marcus, Arthur Blank, Ron Brill, and Pat Farrah. The Home Depot's proposition was to build home-improvement warehouses, larger than any of their competitors' facilities. Investment banker Ken Langone helped Marcus and Blank to secure the necessary capital.

In 1979, the first two stores, built in spaces leased from J. C. Penney that were originally Treasure Island "hypermarket" (discount department and grocery) stores, opened in metro Atlanta on June 21. Two more opened not long after, and all four shared the space under the "squiggly" zig-zag roof with Zayre on its right side. The first headquarters was on Terrell Mill Road on the southeast side of Marietta, Georgia, just down from one of the stores at the corner of Cobb Parkway. (That store 33°54′23″N 84°29′14″W / 33.9065°N 84.4872°W / 33.9065; -84.4872 (former location of The Home Depot's first store (Marietta Plaza, 1979)), in the Marietta Plaza strip mall, became Value City, changing to Burlington Coat Factory in 2008; part was also a short-lived Little Bucks, in which Brill had a stake.)

Since the 1990s, its headquarters (33°51′54″N 84°28′55″W / 33.865°N 84.482°W / 33.865; -84.482 (The Home Depot, headquarters)) have been a complex of high-rise buildings on Paces Ferry Road, on the western edge of the Cumberland/Galleria edge city in unincorporated Cobb County, Georgia, across Interstate 285 from the town of Vinings, and served by mail from Atlanta. The tallest building is approximately 85 metres (279 ft) high, the fourth-tallest in the Vinings area.

In 2000, after the retirement of Marcus and Blank, Robert Nardelli was appointed chairman, president, and CEO.

Nardelli resigned as Chairman CEO on January 3, 2007, amid controversy over his salary, the company's stagnating stock price, and poor customer service. He was succeeded by executive vice president and vice chairman Frank Blake. Although a longtime deputy to Nardelli at GE and Home Depot, Blake has been said to lack Nardelli's hard edge and instead prefers to make decisions by consensus. Indeed Blake repudiated many of his predecessor's strategies, and it has been reported that the two men have not spoken since Nardelli departed Home Depot.

Nardelli had pushed hard to make the company more efficient, instituting many metrics and centralizing operations, while cutting jobs to meet quarterly earnings targets. While this initially doubled earnings and reduced expenses, it alienated many of the store managers and rank-and-file store associates, and by extension the customers. Nardelli, who regarded home improvement store-by-store sales as less important due to market saturation from competition such as Lowe's, aimed to dominate the wholesale housing-supply business though building up HD Supply, a unit that Blake sold for $8.5 billion in August 2007 since it was not part of Home Depot's integrated business. In comparison to Nardelli whose numbers-driven approach never appreciated the role of the store and its associates, Blake's strategy has revolved around reinvigorating the stores and its service culture (engaging employees, making products readily available and exciting to customers, improving the store environment, and dominating the professional contracting business, an area in which Home Depot's closest rivals trail far behind), as he recognized that employee morale is a more sensitive issue in retail compared to other industry sectors like manufacturing.

In 2007 the Home Depot sold its $13 billion revenue wholesale (trade) division, HD Supply, to a consortium of three private equity firms, The Carlyle Group, Bain Capital and Clayton, Dubilier and Rice (with each agreeing to buy a one-third stake in the division). Home Depot sold their wholesale construction supply business to fund a stock repurchase estimated at $40 billion.