HD Supply Archives

Commentary: Don’t Count Out HD Supply for the Long Haul

As reported by The New York Times this week, it did not take long for private equity firms to call the new HD CEO and wave some serious money (some analysts estimated $9 billion for a division doing about $12B in revenue in 2006) to take the HD Supply distraction off his hands. That is how the mainstream media and some analysts are painting it.

At one level, it wasn’t surprising based on the departure of the chief exec last month and the arrival on the board of an activist investor none too happy with the company’s wholesale foray into distribution.

For many independent distributors with some memory, it sounds eerily like another lesson in the properties of oil and water. There have been multiple failures of manufacturers trying to run profitable distribution …

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February 10, 2007

Companies

Home Depot Reaches Agreement With Activist Investor

The Home Depot, Atlanta, GA, has reached an agreement with Relational Investors LLC. The investment firm is headed by Ralph Whitworth, who has criticized HD’s executive strategy, including its HD Supply division, and has demanded a place on the board.

As part of the agreement, David Batchelder, a principal of Relational, will join HD’s board of directors on Feb. 22, 2007. Relational has agreed to drop its proxy contest – Batchelder will be appointed to the Leadership Development and Compensation Committee and to the Audit Committee.

Today’s agreement follows actions taken by Relational in December 2006 to solicit proxies for a resolution to be brought before The Home Depot’s annual meeting seeking an independent committee …

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February 6, 2007

Companies

Letter to the Editor: What’s Home Depot’s Growth Strategy?

Dear Editor:

I would like to disagree with MDM’s editorial on Home Depot (MDM Jan. 10, 2007) – on several levels.

1) The job of company management, within certain limits, is to maximize shareholder value. HD stock was over $43 in 2000. According to the inflation calculator provided (on the Web) by the Bureau of Labor Statistics, that adjusts (for inflation) to about $50 in 2006. I would guess it will adjust another dollar higher in 2007 money, so make it $51.

Essentially, HD paid Bob Nardelli more than $450 million over six years to go backwards. The spending power of the money invested in HD stock by shareholders who bought the stock the day he was named Big Cheese DECLINED. You cite Nardelli’s accomplishments. If he’s not responsible for …

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January 25, 2007

Companies

HD Board May Meet With Activist Investor This Week

The Wall Street Journal (subscription required) reported this weekend that Home Depot board members are expected to visit this week with investor Ralph Whitworth, head of Relational Investors, which owns 1.3% of HD stock. Whitworth has been critical of HD’s strategy recently and says that big changes are necessary to boost the stock price post-Nardelli. Bob Nardelli recently resigned his post as CEO.

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Whitworth has been critical of HD’s supply business, telling CNBC’s Closing Bell in January: What we believe is that management should be focused like laser beams on the core business, improving the customer experience, …

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January 22, 2007

Companies

HD Supply to Buy Sioux Pipe

HD Supply Waterworks, a subsidiary of The Home Depot, has agreed to acquire Sioux Pipe, Inc., a water and sewer distributor with two locations in South Dakota.

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With the addition of Sioux Pipe, HD Supply Waterworks creates a presence in South Dakota.

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HD Supply Waterworks supplies products in building, repairing and maintaining water and wastewater systems. It is part of HD Supply, Home Depot’s wholesale division.

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January 9, 2007

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