Reportedly, Home Depots board finally sacked the chairman and chief executive. Don’t shed too many tears for him, however, as he seems to have done pretty well with a “platinum parachute” cushioning his departure. A couple of paragraphs from the New York Times article: http://www.nytimes.com
“Time ran out on Mr. Nardelli on Tuesday, after the board, at a hastily arranged meeting, decided that he should go — with a $210 million exit package.
“It was a surprising turnaround for Home Depot’s board, which had publicly supported Mr. Nardelli as recently as two weeks ago even as questions about his compensation, business strategy and autocratic management style mounted.
“What ultimately divided the board and its chief executive appeared to have been Mr. Nardelli’s compensation. Over six years as chief executive, he had taken home $64 million and was on track to earn hundreds of millions more. In recent months, people close to the board say, directors sought to rein in the compensation under the terms of his current contract. Mr. Nardelli, these people said, had challenged that effort.”
Replies
Looks like Nardelli was the best mathmatician of the bunch.
He was not making the money fast enough, so he got them to fire him and give him almost 20 years salary all at once...
Sure does dwarf the 300-some odd dollars they ripped me off for, on the credit card.
Get over it....... The angry going eat you up. ~Brownbagg '06
It will be interesting to see whether HD actually changes its spots now.
We trades,emn have known for years that HD is a suckie place to try to do business. It's the DIY market that has kept them in business and growing.
The growth has finally stopped so I wonder if the DIYs have started to catch on
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From what I heard, the shareholders were raising he!! about the lack of growth and the board finally had to act. Apparently, the buy-out package ($210 million) caused even more hate and discontent.
I doubt if HD will change much.
>From what I heard, the shareholders were raising he!! about the lack of growth... <
Among other things such as this CEO being a No-Show at the annual share holders meeting that also did not include a Q& A session. Not good for the value of their stock.
Screwed up thing about a company being publicly traded is that their primary business concern is the price of their stock and investor confidence and not customer experience.
edit to correct: My memory failed me, it was the board of directors that was kept home while Nardelli was the only one to show at the meeting.
Edited 1/4/2007 8:25 pm ET by john7g
Yea with their "You can do it and we can show you how " campaign, I bet got more people in trouble then you can count.
Not to mention their general practices with the hidden cost.
Hopefully they will change their practices and go back to what made them successful such as their return policy.
You guys all know my Rotozip story. Last tool I ever bought in that hole.
They also need to clean the place up, get rid of all the illegals hanging out in the parking lot. Not bagging on the illegals this time but they are a nuesence and they been known to use the parking lot and bushes as a bathroom, Plus the crime and intimidatation factor for women going into the place.
One thing I can say about the Blowes here is they dont let them on the property. They have to go down the street to hang out.
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Now the money everyone pays for product at HD goes to his severance pay. I have a hunch that the greedeaters hired him hoping to make more money. When they realized that it is customer service and not cutting people which makes a business successful then they fired him.For the greedeaters it is all about money not longevity or people.
Don't buy at Lowes or Home Depot... Support your local lumber yard and hardware/tool stores.
My local lumberyard, Friedman Bros., also does installs which directly compete against me.
It seems other HD employees now are trying to follow Nardelli's lead.
View Image
We trades,emn have known for years that HD is a suckie place to try to do business. It's the DIY market that has kept them in business and growing.
Lowes must want the DIY trade. Early morning at HD, lots of trades, trucks, vans, etc. and hordes of illegals all over the parking lot. Two registers open.
Early morning at Lowes, no trades, no trucks, my van, no hordes of illegals. Two registers open.
You would think HD would open another register. We're in there trying to get the day started. Like they care?
The ToolBear
"Never met a man who couldn't teach me something." Anon.
The HD I go to when I'm working in the area opens at 8:00 - but trades know they can get in the Contractors door just after 7.
By the time 8 am rolls around, 4 or 5 tills are open, not including self check-out.
Most of the old-timers greet me by first name - but then, so do the folks at the other 2 yards I patronize. Mind you, I take the time to learn their names and always greet them by name as soon as I see them.Quality repairs for your home.
AaronR ConstructionVancouver, Canada
How come the common joe doesn't get such a package when being fired? It seems more than one exec always manages to ensure a sweet firing package deal to ease the pain of being unemployed. I'm sure it hurts sooo much all the way to the beach on his private island.
They negotiate the firing package when they get hired. That's when they have the leverage.Rebeccah
Kind od like a pre-nuptial agreement ;-)
"Kind od like a pre-nuptial agreement "
Except that most people who get married don't get screwed as much as the shareholders of HD did.
Pity.
I wonder if the shareholders will be that effected. The way HD has grown over the years this might be small change to them. You would think that they figured the $210 million was worth getting back control of the company.
I really dislike HD so I would like to think it hurt, but it probably didn't
Welcome to corporate America. Common Joe's raise is determined largely by profitability of his department. Except if they do really well. I wouldn't be surprised to hear that the executives raises are pre-negotiated just like the "platinum parachute". Probably set to some high minimum, with extras on top of that too.
I remember some years back when British Telecom was in negotiations to buy MCI. The deal fell through. One big sticking point was how high the American executives salaries were.... Like the US execs were making 2 to 4 times the amount that their British counterparts were. On the bright side, those guys have to live their job - literally. None of this going home at 5:00 kind of stuff. Their lonely wives are left at home with no one to preform services around the house except some hired tradesmen.
>>lonely wives are left at home with no one to preform services around the house except some hired tradesmen.
I know you didn't mean that to sound like what it sounds like...!
All joking aside, the common "joe" doesn't have the experience to run a $82billion company. It's not something you go down on the corner to pick up someone to run! (I'm sure that may come as a surprise to some!!) Nardelli came from one of, if not the best management training programs in the world: GE. HD depot was a world-class mess when he got there. He attempted to standardize something that was not easily standardized. LOWEs has gotten it right, right from the start. Consumers are heading to Lowes more and more, and professionals are heading back to the local service oriented suppliers for lumber as well as for tools. Also, the internet has cut into the tool market big time. Nardelli is not the first who has been nipped by good ol' boyism and provincial mentality.
Also, when he signed, $210 million was no big deal... I personally think their futures should be linked to stock performance, period. But fat chance!"The nearest thing to eternal life we will ever see on this earth is a governmental program" -Ronald Reagan
Nardelli's coming up through GE might have been a disadvantage. Despite Jack Welsh's hyperactive publicity department, GE in many of its units is a hideboundand authoritatian organization. I personally in the past have had quite a bit of experience working with them, up to almost the highest levels (never met Welsh, and only ever spent time with one of his top lieutenants, but lots of folks from that level down). GE makes some good products, without a doubt, and some that are not so good, but in the end, GE itself is a huge conglomerated portfolio of command and control manufacturing and finance companies. Welsh was not a master BUSINESS manager, so much as he was a master PORTFOLIO and EARNINGS manager. His guys were of similar mold. Not much end-user or trade orientation at all. They are not suited to retail and distribution.Note that as big as it was, their recently sold GE Supply also called GESCO did not really make a mark on the distribution world. Nobody ever listed them as a feared competitor.The problem is that Boards like to think that guys who run large organizations can run ANY large organization. In reality, high level guys and gals in old organizations are often master politicians and bureaucrats first, and business people second.
I have worked in plants, U.S. Army for 20 yrs, aviation (FBO EXVP/Gen mgr, manufacturer's rep, and now repair and remodeling, I must agree.
(Edit to add:) I think the Boards should never buy in to anything that overly ridiculous though unless there are darn near spectacular results required. Those results should not be achieved by gutting the workforce or outsourcing either.
While I applaud the "working Joe" contribution to the company success it is like the oarsman making the boat move, the person either moving the tiller or telling someone else to move it has the most influence on the result. Compensation should be in line with that.
Another comparison is the general compared to the private on the frontline. The guy with the rifle is most likely to die but who has the most responsibility? The decisions the commander makes will surely have a larger impact in the overall outcome.
You cannot use some ratio of 1:10 or whatever,as some people suggest for the compensation for different jobs. Joe on the line should be adequately compensated and if he can make it run faster he/she ought to get the just reward. The job should pay what it is worth.
Like you said, these people have to "live and breathe" the operation. I was at the facility at least 10-12 hrs/day and on call 24/7 at the FBO. Our owner/leader decided we needed to have meetings on Saturday morning because his Wal-Mart VP buddies had to do that. Da*n I do not miss it.
Edited 1/6/2007 11:16 am ET by rasconc
"I personally think their futures should be linked to stock performance, period. But fat chance!"After Enron, and a few other scandals, I have heard exactly the opposite. That if their futures are linked to stock performance, period... they will play games trying to make the stock LOOK better. And people lose everything, behind their scams.
Get over it....... The angry going eat you up. ~Brownbagg '06
that's just more blah thinking. follow the herd. People rob banks even though it's against the law. How many companies really get away with this, as did Enron??? By the way, as a money manager, I was not fooled. I did not invest a penny in Enron. I feel bad for those who did, but it was clear to me that it was a scam. Apart from that, as a percentage of all companies, I wish our elected officials had even half the success rate that our corporate offices do. There will always be bad apples, period. But disclosure is the way to solve it. As a shareholder, I want to be on the side of the CEO. When he makes money, I want to be making it as well."The nearest thing to eternal life we will ever see on this earth is a governmental program" -Ronald Reagan
"Time ran out on Mr. Nardelli on Tuesday, after the board, at a hastily arranged meeting, decided that he should go — with a $210 million exit package.
That settles it. At a hastily arranged director's meeting, I decided I'm going to fire myself and give me a $210 billion exit package. My shareholder can just go *&?# himself. I deserve it.
His platinum parachute as someone put it, was negotiated before he took the job, which is normally the ways these guys do it. Don't agree with it, but companies obviously aren't thinking about the day when they'll let the guy go when they are agreeing to such rediculous compensation packages.
If only they could say to him, "Oh by the way -- That $210 million will be in store credit rather than cash." ;-)
-- J.S.
You are fired! now take the 200 million and get outa here! That will teach em no ? Jez holy land of confuzion !
stinky
Yeah. Store credit. Now he can build his own hideaway.
Point 1 -- What most stockholders and MBAs don't understand is that an innovative idea can only expand so far. For instance, someone invents the computer or the cell phone. It takes a while to catch on but then becomes popular. Someone makes millions. Then others join the fray offering improvements/lower prices. Eventually all the consumers have one and sales drop. In the case of dear old Home Depot, they have saturated their market and can go no further.
Point 2 -- A lot of stockholders are day traders. They use computer programs to buy and sell based on fluctuations and they don't even know or care what they are buying/selling. Stock A seems to be going up so I'll buy it. Stock B looks like its going downhill so I'll sell it. The Wall St. Journal had an article [a couple of Fridays ago -- I only buy it on Fridays because of the crossword puzzle] about a computerized trading firm which moved its' headquarters to downtown Wall Street to cut the electronic transmission time a fraction of a second.
Point 3 -- I read a business booka long time ago and the author advised that each year must have better results than last years. This is nice. But it ignores fluctuations in the economy and the saturation point I mentioned above.
Home de Pot has reached its' saturation point and the only way it can expand -- there are only so many DIYers -- is to diversify. In their case they dabble in installation services with dubious success. Tool rentals are more appropriate.
Point 4 -- The upper eschelon of super corporations live in a world of their own. They have nothing to do with what goes on in their stores. They don't care. They are dealing with aquisitions and mergers. Much of their wealth is derived from stock options of which I have a very low opinion. In other words, why?
~Peter
Point 1 -- by that reasoning, Grover Cleveland should have accepted the proposal to close the patent office in 1899 because "everything has been invented already."http://tinyurl.com/y725qbPoint 2 -- this is a wild generalization; what's your source?Point 3 -- Re: saturation. According to the Times article cited in the first post, "During his [Nardelli's] tenure, Home Depot doubled its sales and sharply increased its earnings per share." Doesn't sound to me like "saturation" was the problem.Point 4 -- on this I agree, as far as Nardelli is concerned. He came to HD with zero retailing experience, and despite his intensive travel to HD stores, he only seemed to tick people off, and never did learn anything about retailing........................................................................Nardelli may have had great credentials, but as a manager and a leader he was a turd. I think the market understood this, and further, had no confidence in the direction he was taking the company (e.g. Home Depot Supply).I agree that a $200 mil buyout package is absurd and obscene, but for a company with annual revenues of $90 billion, it is a tiny little blip on the screen.
********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
Would someone mind firing me that way? Please? I'll be good, I wouldn't hang out in front of the store or bother the customers.
"I cut this piece four times and it's still too short."
Seams to me that the real skill in this CEO's bag of tricks is not his management practices but his negotiation tactics.
$200 mill aint all that bad a way to go out, at least it wouldnt be for me!
$200 Mil? A guy could live on that.
"I cut this piece four times and it's still too short."
I'd certainly like to try...
Get over it....... The angry going eat you up. ~Brownbagg '06
I guess I could tighten the belt a little. (:-)
I would have to say that depot in the mid atlantic region has reached saturation. Within 20 miles I can shop at no less then 12 different depot stores. There was a previous company named Hechingers that did the very same thing and they are long since gone. In this market now depot competes against its self for the few customers they haven't pissed off or are forced to shop there. It'll take them years to shrink but expanding in this area is not an option.
Rebuttal
Point 1 -- Nothing at all to do with Grover. At first, the Internet [invented by Al Gore], was bulletin boards and all they could do is transmit words. Then they added graphics, then pictures, then sound, then color, then movies. Not much else to develop. Smell-O-Vision?
Companies would put out products that soon broke or wore out. People didn't buy from them a second time. Eventually everyone who wanted one has a computer that keeps on working. So why upgrade? Hence the drop of sales if you plot it as a curve. There's always replacement due to loss and an expanding population. But the boom times are over.
There is always a possibility for totally new inventions such as cell phones whatever they are. [I think they are just an excuse for people who talk to themselves in public.]
Point 3 -- Like the Chicago wind that sucks your car into following the car ahead of you through an amber light, he was just riding on the coattails of his predecessor. He didn't have to do anything for the first few years and things would have continued in the same direction. Newton's Law of Inertia.
Point 2 -- Some stockholders carefully examine the prospectus of the various companies they are thinking of investing in. I would like to buy one share of Southern Pacific because I like the trains. These are the ones who have a legitimate right to gripe if things turn as sour as a lemon drop. There are other "shareholders" who only know the ticker symbols and the opening and closing. I invented this fantasy myself.
~Peter
Edited 1/4/2007 9:53 pm ET by pm22
"Doesn't sound to me like "saturation" was the problem."See my post just above. He had admitted saturation was a challenge and that he was working on it with alternative strategies - unfortunately for him and stockholders, it didn't work
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
HD has been casting around for a growth strategy for a few years now. They have targeted the trade, but have not figured out how to do that kind of business. I electrical supplies, they opened some experimental HD Supply branches. Those really didn't go anywhere. In the last couple of years, they acquired two very large and well-thought-of electrical distributors -- each of which has quite different business models. In early December attended a meeting of major manufacturers, who, when this topic came up made three points a) HD and Lowes are likely to remain a major factor; b) they really do not know which model can work for them and are acquiring by way of experimentation; and c) HD is probably going to screw up its efforts to cater to the trade on any kind of large scale. Meanwhile, HD opened some high-end consumer/designer mega-showrooms called EXPO. I think I heard that they are pulling back from that experiment, too. One problem with EXPO is that they carry lmost no inventory-so you have to wait a week or two for a drop shipment. ANother, as with most HD utlets, is the lack of support staff.
@@ They have targeted the trade, but have not figured out how to do that kind of business
I've noticed. We are in there early and want to get our stuff and get on to the job. Two registers open, plus the hell that is self-checkout (one bad day I was five seconds from leaving $180 in parts there and going to Lowes) when the trades are trying to get going shows a lack of understanding - or caring.
Even better, they have just closed the aisle I need to be in. How do they know?The ToolBear
"Never met a man who couldn't teach me something." Anon.
Right. Absolutely right.
And their prices are not any better and sometimes not as good, and good luck getting project coordination, kitting, special deliveries, or the kind of trade credit that any good distributor of anything offers. Lets not even talk about important "B" and "C" items.
They may learn a lot through their acquisitions of successful distributos, or they may just mess up the distributors.
Any bets on that?
You don't give me pencils for free I don't shop here. Target my business my a%%
Pencils?
Come to think of it, the only time I got a freebie from HD was when they sponsored a Habitat for Humanity project of ours. They showed up with gimmies and toys and we looted them. Of course, Weyerhauser showed up with better toys - Stanley 35' tapes, etc. Love to see them again <g>.The ToolBear
"Never met a man who couldn't teach me something." Anon.
Yea, and Lowes is no better. last week I was in the local big blue , contractors check out area.. one checker, two available registers and the line is about 12 guys long.
The "Contractor Service Manager" leaned against the counter the whole time staring off into space.. offered no help to the checker, no help to the guys in line.
Still would have had to buy a pencil if I needed one.
I miss Copelands and still shop Lumbermans
I agree with you about Lowes. I was trying to buy some skylights for a project two yeas ago, and the stock was up overhead. I didn't feel like doing a spider-man act to get them down AND I couldn't find pricing. So I started clerk-hunting. Hunted for 20 minutes (no exaggeration). All I could find were other poor souls who were hunting for clerks. The one guy I found was from the carpet department cna couldn't help me. So I picked up a paging phone on one of their untended desks and did an all-store page, "Now hear this, there are several customers in the windows and lumber aisles who have nearly given up hope of being allowed to buy anything. Is there an employee anywhere in the store who can help or should we all go down the street?" I got a clerk and later complained to the manager. Although I did get a clerk, srvice is no better now than it was then. They don't give a rat's A$$ about individual customers.
srvice is no better now than it was then. They don't give a rat's A$$ about individual customers.why should they, there are getting paid $6 a hour but as soon as somebody needs to know how to plumb or electrified the box stores employees are higher on the ladder than the code checkers.
Well, yes, but I was not really complaining about the employees, so much as the pinheads who understaff and schedule them badly, and fail to train them on products. It is Lowes that does not care.
I am sure lots of the clerks are nice people who would like to help if they knew how, and if there were enough of them in the store to cover it.
you should see what they did to Whitecap and KelWelCo....
worse tha the DIY shams they have..
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
you should see what they did to Whitecap and KelWelCo....
Yea, no shid! We have KelWelCo around here and its gotten horrible. Everytime I stop in there, which isnt going to be very often anymore, they dont have what I want but they offer to order if for me! Hell I can order it, what the hell do they think I come in there damn store for? Plus they never have any popcorn in the machine anymore.
There service is going down the tube faster then Bush's ratings.
Doug
you should see what they did to Whitecap and KelWelCo....
What have they done? I don't get into WC very often. Like stores with posted prices. Prevents register shock.
Our lumber comes out of Ganahls. My stuff comes from HD or Lowes, my choice, or specialty suppliers.
Know the boss was very pissed with them for letting one of the troops open a $10,000 account so he could get a few cans of paint. WTF!
The ToolBear
"Never met a man who couldn't teach me something." Anon.
gotta watch WC's sales department...
they'll pad a ticket in a heart beat...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
That's if you can get the guys attention in the first place.
In another thread, I was B'ing and M'ing about the 6 weeks it took to even place an order for some Miracote epoxy fixin's thru White Crap. Finally had to call Miracote's regional rep to get the order placed.
But going to these rep's also tells you where another distributor is. I found out that Bobcat of the Rockies is also picking up the Miracote line here in Denver. So's White Crap is losing a customer.
Maybe I'm not a big customer of these guys, but I refuse to let a supplier hold up my project. There's always a sales mgr somewhere that needs his sh*t moved.
WC in thesprings has their catalog in spanish now..
the signs on the shelves are that way too and not bi-lingual...
there are always suppliers out there that will be happy to do business with ya...
saw the new WC flier a bit ago and went over.. nothing in stock and help wanted signs up out front...
KelWelCo was deserted...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
prices up..
service down..
stock not there
special ordering is a forever deal and sucks
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
HD here is 100% up front money on special orders and you get it when it comes in
local yard is nothing down and you pay 15 days after start of month following
HD is a bunch of #### on a good day
yea not mention they usually screw up the special order as well. Dont have that problem at my usual supplier. Not to mention my supplier is very accuarate on the times the spec order will be in too..
View Image Official Jeff Buck Memorial Tagline "
Edited 1/8/2007 9:54 am by Sancho
prices up..
service down..
stock not there
special ordering is a forever deal and sucks
"Brownie, you're doing a great job." G.W. Bush
Obviously it's time for some more executive stock options, backdated, please.
Talking to the clerk in the self checkout hell today - said their hours were cut beginning in Nov. Speculated - to raise $$ for his Going Away present. The ToolBear
"Never met a man who couldn't teach me something." Anon.
I quite doing buisness with HD on a regular basis years ago. I will only go there if there is no other choice.
We in the upper-midwest have a good choice of big box stores, Menards Lowes and the hole HD.
When it comes to lumber or any other buiding materials, it's hard to beat Menards ---you go to the contractors services, get a materials ticket, go pay at the register and DRIVE to the yard and load up. Forget loading a cart, moving the MFing materials cart through the store and then loading it into your truck.
In one of the articles I read about Nardelli, they talked about HOME DEPOT SUPPLY, which is apparently a separate business set up to sell to commercial construction types. The article said it was about 13% of HD's total sales of $90 billion last year, so it is big. But I've never heard anything about it around here. Have any of you?********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
Yes, HD Supply is a wholesale to the trade kind of business, that has underperformed expectations. It is largely made up of acquired distributors. In electrical and plumbing, for example, they bought out Hughes Supply -- a very well run company, and some others. However, they still seem to be in search of a business model that will work for them. They sell electrical, plumbing, janitorial, housekeeping (hotel stuff) and so on.
But this business is NOT run thru the regular HD retail outlets, right?********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
RIght. It runs in its own locations, under the HD Supply nameplate, and also under some of the nameplates of the acquired companies. You can't by regular HD products through HD Supply.
Who constitutes their customer base? I assume it is not smallish contractors, so it must be very large commercial types.********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
I really don't know, but probably a mix. I do a lot of work in the electrical distribution industry and have never heard any one complaining about inroads into their customer base by HD Supply. On the other hand, Hughes Supply was always very well run and quite competitive, and HD owns them now. It remains to be seen if they learn from Hughes or just mess them up.
THe regular distribution businesses could benefit from the expertise and efficiency in the HD supply chain.
HD could benefit by learning that inside sales people and retail associates are similar in skill set whereas there is no equivalent to the outside sales person at HD. The same analogy could be drawn to the good/knowledgeable salesguys at lumberyards - you know that ones that make sure the customer is happy.
(these latter points are probably because any money that "layer" would earn goes further upstream or is not available due to the price point)
http://jhausch.blogspot.comAdventures in Home BuildingAn online journal covering the preparation and construction of our new home.
Edited 1/8/2007 8:17 pm by jhausch
Well, yes and no.
HD itself has broad but shallow stock, specialized in what the trade calls "a" items. This gives them higher turnover and better GMROI on their stock. Full line distributors can't carry stuff that people won't buy, but they do have much deeper stock. This calls for a different purchasing mindset, and different algorithms in the purchasing modules of the business systems.
It is also different in that instead of having all the stock on the floor as does HD, distributors must keep slower moving items in central locations and use very efficient restocking practices. If they didn't do this, the slower items would suck up their inventory dollars and put them in a real jam.
Distributors also offer an array of other services, sometimes free, and sometimes unbundled, but important either way. These include: help in bidding; project management; special expertise and engineering assistance; special kitting and packaging; etc.
Distributors also serve as bankers to a good many contractors who could not get similar credit elsewhere.
Of course, it is possible that HD will eventually learn these things and build a culture to support them.
In the mean time, if you shop HD operations, you generally WILL NOT find better pricing. I have done the comparison shopping in both lumber and elecrrical supplies. Sometimes they are competitive, but usually their prices are right down the middle, and the independents are less expensive. People are often diverted by HD advertizing and don't realize this.
Anyway, although they sell the same parts, Big Orange and distribution are in two very different kinds of business.
Interestingly, Hughes Supply that was bought out by HD had some of the most efficient warehousing operations in the country.
Edited 1/8/2007 8:38 pm ET by Joe Sullivan
It's fascinating to get the inside dope on this kind of stuff. Thanks for the info.********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
As a HD employee, I am tickled to see everyone's comments about our beloved KNOB BARDELLI, but it should be noted that his severance package was in addition to his wages for the last six years, and that totalled somewhere near $270 million.
So I did some fast math, 270 +210=480 million.
Six years at 2000/hrs a year =12,000 hours (yeah, I know, like he worked 40/week)
$480,00 divided by 12,000 = $40,000 hr !!!
Man that beats the CEO of J C Pennys who was dumped after only six months. Her package worked out to only a measly 10 grand an hour.
Just goes to show that you gotta stick to your job to get the rewards I guess.
I think you may be wrong about the wages part; I am pretty sure I read he had been paid a total of some $65 million for his years on the job.Many of the news stories I read talked aoub this 14 hour days, and the constant trips to HD stores; the only problem was, wherever he went, he pizzed people off. Were you there during the Arthur Blank/Bernie Marcus days?********************************************************
"It is what we learn after we think we know it all, that counts."
John Wooden 1910-
Yes, I have there for 7 1/2 years, (now a District Trainer in S. Wis.) and fondly look back to the days when those two were on HDtv and told us about what was going on.
I believe the figure you gave was the per year figure; see he was supposed to get a 3 million dollar salary, but then gets a $7million bonus, and then gets 'other' compensation of near $20 million PER YEAR! And that's just the stuff they tell us about.
Let's hope Frank Blake is going to turn the ship around 180 degrees!
Here south of Denver, they have had one (Supply) for at least five years. Inside, it wasn't much different that a regular one - other than a whole lot fewer customers. Yesterday as I drove past it, I see it has been shut down.
they bought KelWelCo, WhiteCap and United...
closed United down and took the other two reasonably run companies and consoildated them..
then trashed the CS portion and cut the inventory way back...
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside, thoroughly used up, totally worn out, and loudly proclaiming<!----><!----><!---->
WOW!!! What a Ride!<!----><!---->
Forget the primal scream, just ROAR!!!
Edited 1/8/2007 8:00 pm by IMERC
HD is all over the place right now. Anybody else get their email specials? They're selling excersice machines, bed linens, laptops. Competing with amazon, walmart and every other retailer out there. WTF?
re your comments on growth which are entirely correct -
I watched an interview with this guy a year or so back, maybe two years now - where he was asked about market saturation and what he would do to keep up the growth rates.
His answer was twofold - one that he would be expanding into Europe, and second, that they were lowering the target market from houses with ave income of eighty some thousand per annum to $57K/ because there were an additional X number of such households.That was a glowing red light to me as an investor, not that I have ever ownd HD.Those households have far less disposable income to spend on home improvements. All they can afford is light bulbs and new toilet tank valves instead of new kitchens
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
ROTFLMAO
Welcome to the Taunton University of Knowledge FHB Campus at Breaktime. where ... Excellence is its own reward!
http://www.chron.com/disp/story.mpl/business/steffy/4447444.html
Nardelli Principle at work
By LOREN STEFFY
Copyright 2007 Houston Chronicle
"Being a cowboy aint all ridin and shootin" - Tim Mooney