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HomeDepot, the worlds largest building materials retailer, exits China

2021-10-23 08:18:15
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On the afternoon of September 13, Home Depot suddenly closed all seven building materials stores in China. As the second largest retailer in the United States after Walmart and the world's largest home building materials supermarket, Home Depot's move caught people off guard. So far, Home Depot's high-profile landing in China in 2006 has come to an end. From the acquisition of "Home World" at the end of 2006, in the more than four years since it entered the market, Home Depot has successively changed three presidents of China, but still has not found its own profit model.

Home Depot China announces to close seven remaining stores in China

Home Depot once refused to pay rent to owners at nine of its stores at the same time. According to Home Depot insiders, at that time, except for Tianjin Youyi Road store and Xi’an Lianhu store, all other Home Depot stores in China were in a state of loss. Even the Qingdao store, which is in the middle and upper reaches of all stores, is on the verge of deficit. It is reported that in 2008, the sales of Qingdao store was 99.67 million yuan, according to the average gross profit rate of Home Depot 18%, the profit amounted to nearly 18 million yuan. However, after deducting the value-added tax of 3 million yuan, and operating costs of more than 5 million yuan, such as rent, labor costs, and electricity costs, and sharing the headquarters expenses, the profit space is limited.

Poor management is Home Depot's own problem. An industry insider pointed out that "it has an unclear strategy in China. After taking over from Home World, the personnel adjustment was too large, and the operation and management were chaotic, resulting in continuous losses or poor profitability." Because of this, "The U.S. headquarters has no confidence in the Chinese business. When the owner invests in the renovation of the property, Home Depot has no intention to cooperate with the owner at all. Moreover, Home Depot does not have any budget to cooperate with the owner to do this. The management of the U.S. headquarters also has no intention of They thought about it, so they made a simple decision to close the store."

Frank Blake, global president of Home Depot, said in an interview with Reuters: "We haven't found the right profit model in China, and there is not enough demand for DIY home building materials in the Chinese market. In the future, we will either find a way to make money in China or leave China. "

In China, consumers have always hired workers to decorate their homes, and almost no one can assemble them at home like American consumers. Do-it-yourself retailers face stiff competition from China's vast home improvement market, which sells many different brands and offers services under one roof, with stores several times the size of a Home Depot store.

Unlike traditional retailers such as Walmart, price is not an advantage for building materials supermarkets such as Home Depot. Consumers are still accustomed to go to Home Depot and other building materials supermarkets to compare material prices, and then go to the local building materials city to "purchase" those building materials products of the same category and lower prices.

Coincidentally, a few months ago, Maison Paris, another Fortune 500 and a famous building materials supermarket, decided to terminate early and withdraw from the Chinese market due to operating difficulties and huge losses. Home Depot closed its stores and Maison Paris' performance plummeted, all of which show that the world's largest foreign home building materials retailers seem to be "unacceptable" in the Chinese market.

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Home Depot, an American company, was founded in 1978. It is the world's largest building materials and home furnishing retail company. The American "Home Depot" is the third largest retail group in the world after Wal-Mart and Carrefour. It has more than 1800p chain stores in the United States, and the number of global chain stores reaches 2234. , In 2004, the sales of more than 75 billion US dollars. Home Depot has been named the "Most Popular Specialty Retailer" by Fortune magazine for nine consecutive years. In 2007, it ranked 17th in the US Fortune 500, and in 2006, it ranked 43rd in the global Fortune 500. A company I admire" No. 13.

Maison Paris is part of the Saint-Gobain Group, the French Saint-Gobain Group Building Materials Distribution Division, and is a leader in European building materials distributors. It has more than 3,800 stores in more than 20 countries including France, the UK, Germany, the Netherlands and China. At the same time develop new materials in the future. Saint-Gobain Group is a European and world leader in all its industries and is one of the top 100 industrial groups in the world. Saint-Gobain is listed on exchanges such as Paris, London, Frankfurt, Zurich, Brussels and Amsterdam. Group sales in 2006 amounted to 41.6 billion euros.

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