June 08, 2004RetailHome Depot eyes China expansion Home improvement leader hopes to build stores in fast-growing, fragmented market, names Asia chief.
The company named Bill Patterson, who had headed its Central store division since 2002, as president of Home Depot Asia. Patterson said Home Depot, which has more than 1,500 stores in the United States and Puerto Rico, may approach the China expansion as it did with Mexico, where it acquired a chain of stores in 2001 and later built from the ground up. The company has about 40 Mexico stores and more than 100 in Canada. "That strategy is one that has served us very well and is applicable to how we would look at China, a combination of different ways to enter the market," Patterson said. He said Home Depot was focusing on China's estimated $50 billion home improvement sector because it is fragmented with limited competition. Home Depot opened two purchasing offices in China in 2002 to expand sales of imported products. Patterson said Europe, which Home Depot is also eyeing for growth, is a mature market where it was difficult to find sites to build stores. Keith Davis, an analyst with investment management firm Farr Miller Washington, said the China operation could help convince skeptical investors that Home Depot can grow even though its stores are approaching saturation in the United States. "It's going to take a long time to see any effects to the bottom line from an expansion into China, but in the more near term it will hopefully alleviate some concerns about opportunities for growth going forward," Davis said. Home Depot (HD: up $0.58 to $35.91, Research, Estimates) shares gained 1.5 percent in late-afternoon trading on the New York Stock Exchange.
Home Depot eyes China growth, names Asia chief - Jun. 7, 2004 Posted by Craig at June 8, 2004 06:47 PM |