ATLANTA -- The Home Depot closed its seven big box stores in China, laying off 850 employees, who will receive severance packages and job placement assistance.
In December 2006, The Home Depot acquired The Home Way, China’s first “big box” home improvement retailer. It eventually expanded to seven stores, which averaged 90,000 square feet, in three cities in China.
An after-tax charge of $160 million will be taken in the third quarter for impairment of goodwill and other assets; Home Depot reported $70.4 billion in revenue last year, and $3.9 billion in earnings. The stores were operating for six years.
"Closing stores is always a difficult decision," said Frank Blake, chairman & CEO. The Home Depot. will maintain two recently-opened specialty stores - a paint and flooring store and a Home Decorators Collection store, both in Tianjin, more tailored to Chinese consumers, who are not do-it-yourself homeowners. It also employs 170 as buyers for its other stores around the world.
"We've learned a great deal over the last six years in China, and our new approach leverages that experience," said Blake in a statement announcing closure of its remaining China stores.
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