Lower profit margin does not mean the Home Depot Supply division was losing money, it just means that it was making less money than Home Depot could allegedly make if it were to simply focus on importing products from other countries.
Do you see a dangerous pattern emerging here? No new United States business can be created that uses United States Labor and United States resources and still score as high a rating with Wall Street as a U.S. business that imports products and/or services from other countries.
At some point, do we dare ask if Wall Street's institutional practices and objectives are violating the constitution of the United States by aggressively advocating the outsourcing of all goods and services to other countries over the blue collar citizens of the United States? -A.M. ------------------------------------------------
[quote name='Home Depot Story' date='Feb 13. 2007'] Strasser said Home Depot's stock should react positively to the news.
''This tells us new CEO Frank Blake is focused on value, and taking a fresh look at every aspect of the business,'' Strasser wrote. [/endquote]
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Increased value for whom? Perhaps increased value for those who are already worth millions and salivate for millions more from their Wall Street Stock holdings. How is this "fresh look" achieved, by focusing on the import retail business while downgrading the importance of the local blue collar worker. -A.M. --------------------------------------------------
[quote name='Home Depot Story' date='Feb 13. 2007'] But Mark Rowen, an analyst with Prudential Equity Group, said in a research note of his own that without HD Supply as a growth vehicle, investors soon could start to focus more intensely on Home Depot's core retail segment, which he believes is close to reaching store saturation in the United States. [/endquote]
Mark Rowen is a smart person. What Mr. Rowen is saying is the diversity of products and services Home Depot provides all over the United States fuels a huge amount of local economies by serving both the consumer with goods they can immediately use, and the blue collar worker with core products they require to do skilled labor, to have a job!
Home Depot is a company that has become an essential economic cog and valued member of local communities throughout the United States, whereas the same cannot be said of Walmart, which actually assisted in the rise and fall of a small town rubbermaid plant located in Wooster, Ohio several years ago. The rubbermaid plant was disassembled and the assembly line manufacturing components were sold to China, over a thousand workers in Wooster Ohio lost their jobs.
What Wall Street is saying to Home Depot is, "Be like Walmart and offer retail only products made from other countries or we will downgrade your Wall Street Value". What Mr. Rowen has intelligently pointed out is that companies that help the local community create and maintain jobs have an intrinsic value that cannot be easily measured by Wall Street. Ironically, it's smaller profit divisions within a company like Home Depot Supply that actually help stabilize a local communities economy and as a result help other Wall Street Stocks meet their bottom line because the local economy sustains more jobs, which results in more overall spendable income. -A.M. ----------------------------------------------------
[quote name='Home Depot Story' date='Feb 13. 2007'] ''We believe that Home Depot will continue to struggle with the effects of a difficult housing market in the near term, as well as intense competition from archrival Lowe's longer term,'' Rowen wrote. [/endquote]
Another excellent point by Mr. Rowen. Home Depot has a competitive edge because it offers a diversity of goods and services. Once Home Depot "cuts and runs", they may gain an instant increase in stockholder value for the investors who want to make a quick buck by selling their Home Depot stock. Afterwards Home Depot will simply blend in with their competition and most likely no longer hold any advantage. Meanwhile the blue collar workers who lose their jobs because of less supply availability won't be able to buy any product from Home Depot at all. -A.M. ----------------------------------------------------
[quote name='Home Depot Story' date='Feb 13. 2007'] Overall, Home Depot currently operates 2,159 stores in the United States, Canada, Mexico and China. [/endquote]
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