Home Depot (HD) appears poised to make the first big step away from the Bob Nardelli era.
The Atlanta-based home-improvement giant said Monday that it is considering the sale or spinoff of its wholesale distribution business. Such a move would let the company focus on its retail operations, which have floundered recently amid the housing downturn. Unloading the supply business would be the first major operational change under new CEO Frank Blake, who stepped into the top spot in January following the departure of the much-criticized Nardelli. Nardelli had been a proponent of bulking up Home Depot's nonretail operations. The company, seeking to take advantage of the housing boom, doubled the size of the supply business last year with the $3.2 billion acquisition of Hughes Supply. The supply unit has annual sales of nearly $12 billion, and in the third quarter it accounted for about 15% of Home Depot's top line. Banc of America Securities analyst David Strasser wrote Monday that the possible sale or spinoff "tells us new CEO Frank Blake is focused on value, and taking a fresh look at every aspect of the business." "This also tells us that they may re-look at the opportunity to monetize real estate at some point," Strasser wrote. "While we had long been advocates of the HD Supply business, the market never seemed to warm up to the strategy, viewing it more as a lower-margin, lower-return distraction from retail."TheStreet Premium Services For Personal Service: 877-471-2967
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