Despite the bruising it has taken in China, Home Depot Inc. will continue to work in the country and to consider other international markets, Chief Executive Frank Blake said Sept. 18.
“We’re not deterred from going overseas. We just learned lessons,” he told Global Atlanta after speaking at the Kiwanis Club of Atlanta‘s weekly luncheon.
The home-improvement retail chain announced Sept. 13 that it would close its last seven big-box stores in China, ending an ill-fated retail foray that began with the acquisition of a 12-store chain in 2006.
Mr. Blake admitted that the company miscalculated Chinese consumers’ desire to work on projects themselves, a mindset that underpins its success in North America.
“It’s a status symbol to have people do the work for you. It’s not appropriate to do it yourself,” he said of Chinese consumers.
The company is tweaking its model in China to focus on Internet sales and specialty stores, according to a statement.
“We’re still working on China,” Mr. Blake told Global Atlanta.
Admitting that the company “sometimes unsuccessfully” goes overseas, he pointed out that Home Depot is the top home-improvement retailer in bothCanada and Mexico, where it operates 180 and 92 stores, respectively. No stores are planned for Europe, he told Global Atlanta.
Mr. Blake attended the Kiwanis Club event to accept its Golden Rule Award, which honored Home Depot employees’ efforts to provide and improve housing for U.S. military veterans.
The father of an Iraq veteran, Mr. Blake said the sacrifices military families face go unappreciated by the broader society. The Home Depot Foundation has already reached a goal set in 2011 to donate $30 million over three years to organizations supporting veterans. This month the foundation allocated $50 million more toward that effort.
After a brief speech, Mr. Blake fielded questions about the company’s stock price and broader operations members of the audience, many of whom were shareholders.
He said the jump in share price to nearly $60 as of Sept. 19 is in part related to investors betting on a recovery in the ailing housing market, which he called the “worst it’s ever been, including the Depression.”
While the market has “stopped the fall,” a housing recovery has yet to materialize, he said.