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Struggling Home Depot changes focus
Source: Agencies |
September 17, 2012, Monday
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Print Edition
Print Edition
HOME Depot Inc, the world's largest home improvement chain, will close all seven of its big box stores and cut 850 jobs in China as the retailer changes its focus in the Chinese market to online and specialty stores, and becomes the latest retailer to feel the chill from China's slowing economy.
Last week, British fashion house Burberry Group Plc warned a slowdown in China could hit earnings. The warning came as recent Chinese data signaled a further slowing of the world's second-largest economy.
Chinese home appliance retail chain operators such as Suning Appliance Co and Gome Electrical Appliances Holding Ltd, seen by some as China's answer to Best Buy Co, are also slowing their expansion to focus on raising efficiencies at existing stores and refining their e-commerce operations.
China's retail sales of consumer goods grew 13.2 percent year on year in August to 1.67 trillion yuan (US$263.84 billion), compared with a rise of 18.1 percent in December, official data showed.
Home Depot will retain two recently opened specialty stores in Tianjin and is "developing relationships with several of China's leading e-commerce websites," the company has said in a statement.
"China is a do-it-for-me market, not a do-it-yourself market, so we have to adjust," spokeswoman Paula Drake said.
The firm entered the rapidly-growing Chinese market in late 2006 through its acquisition of a 12-store Chinese chain called The Home Way. But it has struggled to expand ever since as it was a relatively late entrant.
Last week, British fashion house Burberry Group Plc warned a slowdown in China could hit earnings. The warning came as recent Chinese data signaled a further slowing of the world's second-largest economy.
Chinese home appliance retail chain operators such as Suning Appliance Co and Gome Electrical Appliances Holding Ltd, seen by some as China's answer to Best Buy Co, are also slowing their expansion to focus on raising efficiencies at existing stores and refining their e-commerce operations.
China's retail sales of consumer goods grew 13.2 percent year on year in August to 1.67 trillion yuan (US$263.84 billion), compared with a rise of 18.1 percent in December, official data showed.
Home Depot will retain two recently opened specialty stores in Tianjin and is "developing relationships with several of China's leading e-commerce websites," the company has said in a statement.
"China is a do-it-for-me market, not a do-it-yourself market, so we have to adjust," spokeswoman Paula Drake said.
The firm entered the rapidly-growing Chinese market in late 2006 through its acquisition of a 12-store Chinese chain called The Home Way. But it has struggled to expand ever since as it was a relatively late entrant.
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