As Behemoth Loses Leader, Dealers Should Take Stock and a Cue
The giant that was thought to have enough strength years ago to crush local kitchen and bath dealers has just lost its leader. After six years at the helm of the world’s largest home improvement chain, Bob Nardelli abruptly resigned as chairman and CEO of the Home Depot Inc. last Wednesday, and received a hefty severance package worth about $210 million. Home Depot said Nardelli was being replaced by Frank Blake, its vice chairman, effective immediately.
On the day of Nardelli’s departure shares of Home Depot stock rose 91 cents, or 2.3%, to close at $41.07 on the New York Stock Exchange, near the upper end of their 52-week range of $32.85 to $43.95. Before Wednesday’s news, Home Depot’s stock had been down more than 3% on a split-adjusted basis since Nardelli took charge.
What can independent kitchen and bath dealers learn from this? That even giants like Home Depot can hit bumps in the road, and that dealers can survive and thrive despite a giant like Home Depot in the marketplace.
Indeed, as Home Depot changes its leadership and strategy to better itself in the New Year, dealers should also take stock of what’s good and what’s bad in their firms, and plot a new path to profitability for 2007.
Whether it’s as simple as updating a Website and sending out press releases about just-completed kitchen and bath projects to gain visibility in the community or as hard as deciding on how much to invest in new software and hardware, a new advertising strategy or a new employee or two, dealers should look at their operations and take stock of what needs to be done in 2007 to reinvigorate their employees, generate client interest and boost their bottom lines.
Now, with the holidays over and another year finished, is the perfect time to do that.
Dealers can also take heart that, despite the continued housing slowdown, the kitchen and bath sector is still strong, and consumers still have a very strong interest in improving their homes and investing in the resale value of their homes.
For instance, take a look at the 2007 Forecast. See what the experts from some of the kitchen and bath industry’s leading associations are predicting for the industry this year, and decide for yourself, and for your firm, what the best ways are to capitalize on the factors that are causing a call for cautious optimism in the face of the inevitable housing market slowdown: favorable demographics, lifestyle factors that continue to lead consumers to focus on kitchens and baths, and the residual strength of the nation’s remodeling market.