Home Depot CFO Describes ‘Nightmarish’ Exit from China (Atlanta Business Chronicle)

When the home improvement chain said it was closing stores, Chinese employees took over some stores for weekend.

When Home Depot announced last month that it was closing its seven stores in China, employees at four of the stores locked themselves into the stores for the weekend, despite the severance packages and placement services the retailer provided, Home Depot CFO Carol Tomé said in an interview with the Atlanta Business Chronicle.

The news of the store closings also caused a team of home décor installers in China to take three Home Depot executives – the top lawyer, the head of HR and the head of operations – hostage for 80 hours. And in early October, a group of Chinese vendors stormed one of the closed stores and took the head of operations hostage for the second time.

Tomé told the Atlanta Business Chronicle that “China is too big to ignore,” but says that “doing business in China is unusual."

Home Depot acquired the Home Way stores in China in 2006 on expectations that China’s growing middle class would become do-it-yourselfers, but those expectations failed to pan out, she says. And Home Depot’s plan to remake distribution channels by eliminating middle men and dealing directly with manufacturers was hard to implement. In fact, Tomé tells of Chinese suppliers to Home Depot that didn’t have permits to distribute domestically; Home Depot would ship goods to the U.S. and then back to China.

 

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