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Monday, March 22, 2010
As you may know, Home Depot recently wrote down its valuation of HD Supply to $0. HD Supply's private equity owners also took write-downs last year. And we hear that private equity is not "enthralled" with the cash position of the company relative to its expense rate (and in this economy, not too much of a surprise). So it was a matter of time before some structural and personnel changes were to occur.
As reported in Home Channel News, "John Stegeman, the former president and CEO of Ferguson Enterprises, to lead its HD Supply Canada, HD Supply Electrical, HD Supply Plumbing/HVAC, HD Supply Waterworks and HD Supply White Cap businesses." We understand that Joe D'Angelo will be directly running the remainining businesses ... Facilities Maintenance, Utility, PVF and others.
The segmentation is interesting ... contractor businesses in one grouping, industrial and maintenance businesses in another grouping (or, as someone said, "unprofitable businesses and profitable businesses".)
With the business being nicely segmented, could this be positioning the company for further restructuring, or divestiture? Reportedly, HD Supply's electrical division may also be undergoing leadership change. While HD Supply has historically been a relatively nominal distributor in the electrical space, its size and potential has warranted industry awareness, but could it be a casualty of the economy (and/or an opportunity for someone else?)