Home Depot Girds for Continued Weakness - NYTimes.com

The leadership of Home Depot has decided to move from a culture of expansion to one that is less vulnerable to consumer and credit slowdowns.

When the collapse of Lehman Brothers froze the credit markets last September, Carol Tome quickly ordered hundreds of Home Depot’s store managers to transfer all their spare cash to headquarters — literally cleaning out their registers and each store’s safe.

In fact, Home Depot’s closest competitor, Lowe’s, is taking the opposite tack, continuing to open outlets at a brisk clip in hopes of closing the gap with its much bigger rival. Lowe’s reported a smaller decline in first-quarter earnings than analysts had expected on Monday, ahead of Home Depot’s report on Tuesday.

“Expansion is risky today,” said David H. Autor, an economist at the Massachusetts Institute of Technology, “but it is also a less expensive time to do so in terms of buying land and hiring labor than it will be when the economy comes back. And maybe even in today’s constrained economy, Lowe’s does not have enough outlets.”

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