As Growth Dries Up In US, Home Depot Truns To China

stocks:  (HD)(WMT)

After Wal-Mart’s succesful move into China, it was to be expected that other large US retailers would see the wisdom of turning to China for growth. After two years of negotiating, Home Depot is buying Chinese home improvement chain HomeWay, taking a majority stake for $100 million.

Retail sales are expected to hit $890 billion by 2009.

To expand its presence in China, Wal-Mart recently bought Trust Mart which has 100 stores in 20 Chinese provinces. Wal-Mart’s sales in China are already $2.6 billion a year.

And, Home Depot has ample reason to follow Wal-Mart’s lead. The home improvement operation’s stock trades at about $38, down from down from $51 five years ago.

Labor unions and a powerful central government will always make doing retail business in China risky. But, Home Depot does not have much choice.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.