How CEO Frank Blake Rebuilt Home Depot
Frank Blake needed more than a hammer and a few nails when he got the top job at Home Depot. Blake took over in January 2007, just as the financial crisis was starting to fester, and has since rethought its retail strategy.
By Julie Segal
Francis (Frank) Blake needed more than a hammer and a few nails when he got the top job at Home Depot. Blake took over as chairman and CEO of the U.S.s fourth-largest retailer in January 2007, just as the financial crisis was starting to fester. In a surprise appointment the executive vice president replaced Robert Nardelli, who had overseen the Big Orange Boxs dramatic growth during the U.S. housing boom. Nardellis top-down management style clashed with the warmer Home Depot culture instilled by founders Arthur Blank and Bernard Marcus.
Self-effacing and candid, the 62-year-old Blake is the opposite of his predecessor and former General Electric Co. colleague. But he still had to confront some ugly economics. Seeing that the home improvement chain itself needed major repairs, he laid off 11,000 staff, sold HD Supply in 2007 and closed the Expo Design Center division in 2009.
Blake rebuilt Atlanta-based Home Depots supply chain and rethought its retail strategy. To this day he still taps Blank and Marcus for advice on how to improve customer service and stay true to the original values of the company they launched in 1978.
Today things are turning around for Home Depot, which had sales of $68 billion and earnings from continuing operations of $3.3 billion in 2010. Thanks to Blakes renovations, its performed well during this years weak housing and job market. Raymond James Financial upgraded Home Depot shares to a strong buy from market perform after a solid second quarter; net earnings were $1.4 billion, or $0.86 per share, versus $1.2 billion, or $0.72 per share, during the same period last year. Diluted earnings per share grew 19.4 percent over 2010. ....