“OWN THE PRO” IS ONE OF THE HOME Depot's five business priorities and shorthand for capturing more sales from a customer segment that currently accounts for only 2 percent of its stores' shoppers but 30 percent of its annual revenue. However, the Atlanta-based retailer's recent $10.3 billion sale of its pro-focused HD Supply division, to three private equity firms—which, as of press time, was up in the air—raises questions about how realistic that priority is.
Frank Blake, The Home Depot's chairman and CEO, says the company has added 700 licensed plumbers and electricians to its stores, dedicated to servicing pro customers. But company officials haven't revealed how The Home Depot is addressing other reasons why pros stay out of its stores, such as the lack of jobsite delivery services. And regardless of their lower margins, HD Supply's 12 business units generated $12.1 billion in revenue last year and were Depot's lifeline to the housing industry.
About $1 billion of those sales came from Creative Touch Interiors, whose 24 showrooms provide turnkey interior design solutions for 24 of the 25 largest builders. “The sale of HD Supply will have a positive impact on our customers, since the new enterprise will be more agile and focused,” says its president Tom Lazzaro. HD Supply's two lumber and building materials dealers—the former Cox Lumber in Florida, with 24 yards; and Williams Brothers Lumber in Georgia, with 22 locations—generated an estimated $700 million to $800 million last year.
“This is the right decision for our business, at the right time,” says Joe De Angelo, The Home Depot's COO who is staying on as CEO of HD Supply.
Learn more about markets featured in this article: Atlanta, GA.