Home Depot Inc., the world's largest home-improvement retailer, plans to increase sales to commercial builders to counter a slowing U.S. housing market, Chief Executive Officer Robert Nardelli said in a Bloomberg report.
"We have the largest pipe company in the country," Nardelli said. "While some of it's for housing, the majority of it's for infrastructure. It's in the maintenance and repair area. It's a glove fit to what we do."
Home Depot is seeking sales in new markets as Americans buy houses at a slower pace and spend less on home improvement. While the company combats the faster growth of rival Lowe's Cos., Nardelli is defending against criticism of his pay package and regulatory probes of stock-option grants made to employees more than 6 years earlier.
Home Depot Supply, the company's professional builder unit, grew from almost nothing three years earlier to about U.S. $12 billion in sales this year, accounting for 13 percent of total revenue. The unit will grow to 20 percent of sales by 2010, Home Depot says. The company had $81.5 billion in revenue in 2005.
The division provides revenue less tied to the residential housing market, so it's more stable than the company's main market, homeowners and contractors. The National Association of Realtors this week forecast that existing-home sales will fall 7.6 percent in 2006, and economic conditions may deteriorate as the year progresses, Nardelli said.
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