Home Depot Plans New Initiatives
Atlanta, The Home Depot’s plan to open 400 to 500 stores over the next five years marks a real estate slowdown for the No. 1 home-improvement chain. The new pace of less than 100 stores per year contrasts with 204 new stores in 2000 and 183 new stores in 2004, for instance.
However, the company will pick up the pace in the services side of the business, which will grow to about 5% to 6% of the company’s overall sales by the year 2010. That effort was lifted by the company’s recently announced plan to acquire Hughes Supply Inc. for $3.2 billion, the company’s largest acquisition to date. Home Depot also views the Internet business as a $1 billion business over the next five years.
The Home Depot announced a range of new initiatives for 2006 at its annual meeting with the investment community. “Over the next five years, The Home Depot expects to maintain and grow its leadership position in home improvement retail worldwide,” said Bob Nardelli, chairman, president and CEO. “At the same time, we expect to become the nation’s largest diversified wholesale distributor, become number one in services and will dramatically increase our direct-to-consumer channels. Our 2006 initiatives demonstrate that we are well on our way to accomplishing our 2010 goals.”
The company’s 2010 targets include: annual sales growth of 9% to 12%, earnings per share growth of 10% to 14%, 400 to 500 new store openings and an aggressive growth trajectory for Home Depot Supply.
The company plans four convenience store openings in the first half of 2006.
Bain Capital to Acquire Burlington Coat Factory
Burlington, N.J., Burlington Coat Factory Warehouse Corp. agreed to be acquired by a private investment firm. The 367-store chain said it signed a definitive merger agreement to be acquired by affiliates of Bain Capital Partners, LLC in a $2.06 billion deal.
Under terms of the agreement, Bain Capital will acquire all of the outstanding shares of Burlington Coat Factory Warehouse Corporation for $45.50 per share in cash, for a total consideration of approximately $2.06 billion. “We are thrilled that a transaction with Bain Capital delivers significant value to our stockholders,” said Monroe Milstein, Burlington Coat Factory’s Chairman, President and CEO. “We are very proud of what the Company has accomplished over the past 30 years.”
“Burlington Coat Factory is a well-managed retail business with a strong consumer following, high-quality product offerings, and good growth prospects,” said Jordan Hitch, a managing cirector at Bain Capital. “We are delighted to have the opportunity to partner with the experienced management team to build on the company’s track record of success in merchandising and store operations and to continue to grow the store portfolio.”