Atlanta-based The Home Depot announced it is closing 48 of its stores in various divisions nationwide, including one in Nashville, as consumers continue to cut back on spending for home décor.
The shutdown of the 48 stores will affect 5,000 employees, or about 2 percent of the company's work force, Home Depot said. The company said it was exiting its Expo Design Center business, causing the shutdown of the Expo store on Powell Avenue, affecting 150 workers.
"Exiting our Expo business is a difficult decision, particularly given the hard work and dedication of our associates in that business and the support of our loyal customers," Chairman and CEO Frank Blake said in a statement. "At the same time, it is a necessary decision that will strengthen our core Home Depot business."
Home Depot saw a 6.2 percent drop in sales to $17.8 billion during the third quarter, which ended Nov. 2, compared with the same period a year earlier. Net earnings in the third quarter declined 30.7 percent to $756 million.
Home Depot said the Expo business has never been a strong business, and sales have "weakened significantly as the demand for big ticket design and décor projects has declined in the current economic environment."
The Nashville store will begin a liquidation sale on Tuesday, starting at an average of 10 percent off, said company spokesman Ron DeFeo. The discounts will increase in percentage over time and the store is expected to close by April 8, he said.
Workers will receive a severance package, with at least 60 days' pay from the last day of work, DeFeo said. Full-time hourly and salaried employees who are enrolled in the company's benefits plan will receive a lump sum payment of at least nine months' worth of the company's contributions to their medical coverage, he said. Employees will also be encouraged to look for other opportunities within the company and will be given job placement assistance, he added.Store types are varied
Home Depot will be shutting down 34 Expo Design Center stores, five YardBIRDS stores, two Design Center stores and seven HD Bath locations. Home Depot plans to reduce its work force in administrative functions in the store support centers by 2,000 employees. These employees make up 10 percent of the company's officer ranks. Home Depot said it would have a salary freeze among all of its officers.
The company said it expects to have a total pre-tax charge of $532 million, of which $390 million will be recognized in the fourth quarter.
Home Depot was one of several companies that announced job cuts on Monday. Sprint Nextel Corp. announced that it planned to eliminate 8,000 jobs, and Caterpillar said it would eliminate about 20,000 jobs.
Real Estate Outlook: Obama Effect
Green Building Creates Jobs that Save Energy and Money
As Tennessee job losses soar, Bridgestone plans cuts