News

Home Depot changing do-it-yourself landscape

February 21, 2002

ATLANTA - The Home Depot is shifting the dynamics of its business model to make individual stores more profitable, and kiosks will be part of the company's new vision.

Home Depot officials outlined changes in the company's business plan during a conference with Wall Street analysts on Nov. 30. Robert Nardelli, Home Depot president and chief executive officer, pledged to individualize each store and offer new services to make them more responsive in order to improve profitability. Sales have become lackluster in the do-it-yourself home improvement market, Nardelli said.

"The economic boom, the `build-it-they-will-come' world has changed," Nardelli told the Associated Press.

As part of the Home Depot's changes, the company has entered into a strategic agreement with ServiceMaster Inc. As part of the agreement, the companies will team to offer a range of home maintenance and retail services through a line of kiosks that will be located at Home Depot branches.

"An increasing number of our customers are asking us to handle their home improvement projects and home maintenance needs because they don't have the time or desire to take on these projects themselves," Nardelli said in a news release. "ServiceMaster's wide range of residential services and their reputation for offering excellent customer care make them an ideal partner."

The kiosks will offer landscaping, pest-control, home warranty, clearing, and plumbing services. Home Depot will launch a pilot program in 30 stores covering three markets early next year.

Despite changes in the home improvement market, Nardelli predicted Home Depot revenue would increase by at least 15 percent annually for the next two years, with earnings increasing by 18 percent to 20 percent annually through 2005. The company is slated to take in $53 billion in sales during fiscal year 2001.