Frank Blake, who stabilized and then strengthened Home Depot after the tumultuous tenure of his predecessor, is stepping down Nov. 1 after seven years as CEO of the world’s largest home-improvement retailer.
The new CEO will be Craig Menear, Atlanta-based Home Depot announced Thursday after the stock market closed. Menear, 57, has been president of the company’s U.S. retail operations since February, establishing him as Blake’s likely successor, and is a 34-year retail veteran.
Blake will remain chairman of the board.
Blake, 65, is credited with steering Home Depot, Georgia’s biggest company by revenue, through the housing bust by refocusing the company on its core retail business. He shed the company’s wholesale businesses, championed by his predecessor Bob Nardelli, which became a drag on the company’s financial performance as developers and builders went out of business.
Blake made other tough calls, including ending the company’s unsuccessful experiment in the Chinese market and laying off thousands of workers when sales and earnings flagged. Even through that, however, he is credited with restoring morale among many of the 300,000-plus employees who Nardelli had alienated.
But it was Blake’s focus on improving customer service in the stores that drove up sales and profits after the recession, and propelled the company’s stock to huge gains. Total shareholder return, including dividend reinvestment, has exceeded 150 percent during his tenure — far outstripping the S&P’s average return.
Blake also abandoned what had been the company’s main growth strategy — opening new stores. Instead, he drove sales by redeploying that capital into better management, execution and computer systems at existing stores and distribution centers.
Earlier this week, the company reported a 14 percent increase in fiscal second-quarter net income after a strong spring selling season. During fiscal 2013, Home Depot posted sales of $78.8 billion and profit of $5.4 billion.
“Blake gets an A+ for his performance,” said Ken Bernhardt, a retired Georgia State University marketing professor who is on several for-profit and nonprofit boards.
“He got profits going in the right direction,” said Bernhardt. Blake “completely restored the service culture” at the retailer and “got rid of distractions,” such as the company’s wholesale business.
“He managed through the bad economy and positioned (Home Depot) to be successful as the economy strengthened,” Bernhardt said. “That didn’t just happen.”
Menear rose to the top job after successfully leading a $250 million investment to streamline and improve the productivity of key distribution centers that supply some of the company’s 2,265 stores.
Since becoming president of U.S. retail in February, Menear has been responsible for all merchandising departments, services and strategy. He also oversees the retailer’s online business, marketing and its supply chain network.
“Craig has taken on increasing leadership responsibility over the last several years and has excelled in all his roles,” Blake said in a statement.
Before joining Home Depot in 1997, Menear held merchandising positions at IKEA, Builders Emporium, Grace Home Centers and Montgomery Ward.
