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Home Depot plans closures, layoffs

1,300 employees, 15 stores to be jettisoned

The Home Depot in Dorchester (above) will not close. The only regional store to close is in Brattleboro, Vt. The Home Depot in Dorchester (above) will not close. The only regional store to close is in Brattleboro, Vt. (David Ryan/Globe Staff)
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Bloomberg News / May 2, 2008

ATLANTA - Home Depot Inc., the world's biggest home-improvement retailer, will eliminate 1,300 jobs, close 15 stores, and scrap plans for 50 more as the US housing slump cripples sales.

Home Depot rose the most in a month in New York trading after saying yesterday it will slow its expansion of floor space to 1.5 percent next year from 2.5 percent this year. The Atlanta-based chain maintained its forecast for a decline in earnings per share of 19 percent to 24 percent this year.

Since taking over in January 2007, chief executive Frank Blake has sold the company's commercial-builder unit and closed landscape and floor outlets to focus on retail stores, where customer service trails that of Lowe's Cos. Home Depot lost 33 percent of its market value last year.

"Given the slower economic environment, it's probably an appropriate action to cut their expansion and reduce their expenses," said Walter Todd, a principal at Greenwood Capital Inc. in Greenwood, S.C.

The moves will cost $586 million, mostly in the first quarter, the company said. The only New England store slated for closing is in Brattleboro, Vt.

Home Depot shares rose $1.07, or 3.7 percent, to $29.87.

The job cuts, which represent less than 1 percent of the company's workforce, are Home Depot's third this year. The retailer reduced staff at its Atlanta headquarters by 500 people and said last month it may cut as many as 1,000 jobs as it reduces human-resources departments in stores by half to shift more workers to the sales floor.

Of the 1,300 store jobs being cut, 50 are managers and assistant managers. The retailer employs about 331,000 people, two-thirds of them full-time.

Home Depot had 2,193 stores, not including design and specialty centers, at the end of 2007. Of those, all but 243 were in the United States. The company boosted its store square footage last year by 4.9 percent.

The retailer said in February that fourth-quarter profit fell 27 percent and forecast earnings below analysts' estimates after the deepest housing slump in a quarter century showed no sign of receding. Sales, which dropped for the first time last year, will decline as much as 5 percent during a "challenging" 2008, Blake said in February.

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