Home Depot pulls back on Chinese expansion
The home-improvement chain didn't find enough customer interest in a country where it's more common to call in professionals to have work done.
In many countries, particularly densely populated ones, people don't have or want the huge garages and work benches filled with tools. When they want something fixed, they call a professional to have it done.
Such is life in China, and Home Depot now finds itself in the unpleasant position of closing all seven of its big-box stores there and cutting 850 jobs.
"China is a do-it-for-me market, not a do-it-yourself market, so we have to adjust," Home Depot spokeswoman Paula Drake told Reuters.
There is still a market for home-improvement stores in China, but Britain's Kingfisher has led the way there since the late 1990s, leaving little room for Home Depot, which only arrived in 2006.
Kingfisher says there is plenty of opportunity in China, particularly with new homeowners. In many cities in China, new homes are sprouting up fast and are often sold as empty concrete shells, Kingfisher says on its website. "The new owners are responsible for completing the internal fit-out and decoration themselves," Kingfisher says. "This has fueled the rapid growth of the home improvement market, particularly design, decorating and installation services."
But the Chinese economy has begun to turn down, which undoubtedly factored into Home Depot's decision to close. Chinese home appliance companies are also cutting back on expansion plans until the economy picks up.
Home Depot will keep running two specialty stores it recently opened in Tianjin, Reuters reports, and will look to partner with online shopping sites to increase sales.
More from Top Stocks
- Are stocks headed to all-time highs?
- Bank of America: Never-ending QE winner
- Southwest again takes lead in hiking fares
I usually find after following contractors around;...There are a lot of mistakes and cover-ups..
Most really aren't worth the money they think they are...
Then my wife writes this
A little knowledge, but I am a real pain in the **** to work for. I try to get 40.00 an hour for 3.00 an hour and then these worker people complain!!! Go figure!
They do not claim the cash or check for wages, or don't pay taxes on all of or most of it, then we wonder why the Gov..Is going broke....Mention you have to do a 1099 for business purposes and then watch them scatter or say they will do it for less...Everyone trys to be a Comedian...
MORE ON MSN MONEY
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The Fed may start tapering in just a few months. Here are a few of the likely winners and losers.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.