Home Depot Slashes Jobs, Closes Specialty Stores

In what is being viewed by analysts and Wall Street as a positive move for the company, Home Depot has decided to trim some of its most troubling fat by eliminating its Expo stores and a few other specialty stores that had under-performed for an extended period. Even during the housing boom, stores like Expo that focused on high-end decor and finishings were having a hard time creating adequate profit margins. Home Depot has decided that the time is now to eliminate those stores and to continue bringing further efficiency to their core stores.

As the housing slump continues to drag on around the country, sales have fallen at Home Depot as well as its competitors in the home improvement industry. With 7,000 jobs now off the books and the closing of nearly 50 store locations, Home Depot will be taking huge paper losses in the fourth quarter of 2008 and for the year as a whole.

But analysts like the move and Wall Street responded by boosting shares of Home Depot over 5%, up to $22.85 per share. Few expect to see a significant uptick in the housing market before 2010, so companies like Home Depot are taking actions now to ensure their financial health through at least another down year, before things hopefully begin to turn around in 2010 and beyond. The company still seems to be on rather firm financial footing and will open 12 new stores as scheduled in 2009.