I've been out of the office for a week. Now it's time to get caught up with some of the bigthat hit the wires during the past seven days.
Last Thursday, Home Depot dropped a bombshell, announcing that it was not only going to cut back on store openings by abandoning plans to open 50 stores this year, but it was also going to close 15 beyond. Now, 15 stores for Home Depot, as Marketwatch points out, is less than 1 percent of its store count. So it's not like the firm is massively scaling back. But I'm sure that's small consolation to any shopping center owners that happen to own a with one of those 15.
The decision to stop its expansion is more worrying, however. Owners with projects in the pipeline are fiercely jockeying for tenants. Home Depot is often an anchor in large open-air centers. This will put more pressure on builders to delay or scrap projects. It's not that easy to find alternates for 130,000 square feet of space--which is the size of the average Home Depot location. Put another way, those 50 stores could have accounted for 6.5 million square feet of retail space.
Aside from the real estate implications, it shows that one of the nation's 10 largest retailers continues to struggle. The problems started during the tenure of previous CEO Bob Nardelli who was criticized for overextending the company's operations by venturing into some wholesale lines that the company has since sold. Further, the firm has been stung by the burst housing bubble as home improvement projects drop by the wayside.