According to The New York Post, Home Depot (HD) is having trouble selling its supply business, HD Supply. The slowdown in the housing market is hurting the company’s efforts to get the $10 billion that they hope the unit will fetch. And, the demand for the firm is compounded by the fact that it is a mish mash of smaller supply companies that were glued together by Home Depot over time. "It’s a hairball," said Sanford Bernstein analyst Colin McGranahan, "a roll up of a roll up."
Home Depot is already struggling with its retail business. Same-store sales dropped 7.6% in the latest quarter.
The performance of HD Supply in the last quarter raises an interesting question. Both sales and net income were up at the unit. Much of the increase came from businesses that the company acquired, but the operation may still be the bright spot in the company’s dark days.
Maybe the company should not sell HD Supply at all.
Douglas A. McIntyre
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