It shouldn’t be a surprise to anyone that Home Depot is closing stores. The home improvement retailer has been suffering from the same illness as the housing market.
In fact, Wall Street had a positive view on the news that HD is closing 15 stores and canceling plans to open 50 new locations. Why? Citi’s Deb Weinswig says that it is a sign that HD is refocusing on fixing its existing locations.
The reality is also that slowing square footage growth reduces capital spending and cuts the loss of negative cash-flow operations at 15 underperforming stores. But this doesn’t mean that Home Depot is stopping its expansion plans.
In fact, HD reiterated plans to open 55 new stores this year--36 in the U.S. and 19 stores internationally. I would have liked to be a fly on the wall in the meetings when executives decided which markets had the most hope at rebounding or staying strong during this downturn.