Living The American Dream: Interview With Home Depot Co-Founder Ken Langone

Watch billionaire financier and Home Depot CEO Ken Langone share his rag to riches story.

Home Depot, World's Largest Home Improvement Retailer is Not Improving in China

Image from MSNBC News

Homed Depot had announced that it will close all remaining 7 big box stores in China and will cut 850 jobs. The company will continue to retain two recently opened specialty stores, a paint and flooring store and a home decorations shop in Tianjin. It will also continue to employ 170 store associates. The company says that it will focus more in Chinese market to online shopping.

What happened?

Sometime in December 2006, Home Depot entered China and acquired a local 12-store home improvement retail chain, the Home Way. At that time, the Chinese economy was great and business opportunity was seemed endless.

In recent years, China's economy has slowing down. Retailers are facing pressure in China, where the slowest growth in three years. Retail sales growth in August rose just more than 13% from a year earlier, slower than a 17% climb in August last year. Well, that is an excusable reason. I think that every business, both local and abroad is experiencing some tough economic challenges.

Image from PRNewswire.com

One more reason is that China is a "do-it-for-me" market and not a "do-it-yourself." Home Depot's approach to home improvement is the Do-it-Yourself concept. It works well in the US, but not necessarily overseas. This is one of the main struggles of Home Depot prior to acquiring the Home Way in 2006 and even more evident after the first 4 years of its operation.

With China's thriving cheap labor, why would I do it, if I can pay others for me? Most Chinese prefer apartment-based living which leaves a scarce demand for products such as lumber, and other building materials. I think that Home Depot has failed to translate the "do-it-yourself" ethos in a totally foreign culture.

Sometimes, when you take a business concept abroad, it just doesn't match up with local culture.

Now that Home Depot has created a void in home improvement market niche in China, I am sure another business will fill the gap: Why IKEA Took China By Storm, While Home Depot Failed Miserably

Postal Service Cuts 35,000 Jobs This Year

Planning to look for a job at USPS? Not a good idea.

Because USPS plans to close or consolidate more than 250 processing plants starting May or June. That speaks more than 35,000 jobs in danger of lay offs this year. The job cuts would include 30,000 full time positions and 5,000 non career employees. In the State of Washington alone where I live, it plans to cut more than 300 jobs

Wonder if how many processing plants will shut down in your city? Read this complete list (in PDF)

Top 10 Cities Affected by Organized Retail Crime

The Midtown Atlanta from the Northwest near the Cobb County/Fulton County border on the Chattahoochee
River. The city was among the top 10 places being affected by organized retail crime.

It was a staggering result from a recent NRF survey.

Of the 129 retail companies surveyed this year, nearly all (94.5%) have been the victim of organized retail crime in the past 12 months, a 6% increase over last year and the most in the survey’s history. Retailers said thieves are becoming more brazen and dangerous that, on average more than one in 10 organized retail crime apprehensions (13%) lead to some level of violence.

Here are the cities that retailers were most affected by organized retail crime rings:

• Atlanta, GA
• Chicago, IL
• Dallas, TX
• Houston, TX
• Las Vegas, NV
• Los Angeles, CA
• Miami, FL
• New York, NY/Northern NJ
• Philadelphia, PA
• Phoenix, AZ

Survey also indicates cargo theft poses a big problem for retailers. Organized retail crime has been highlighted in the past as thefts in stores. Now, half of retailers (49.6%) say they have been a victim of cargo theft in the past 12 months. Theft also occurs en route from the distribution center to the store (57.4%), between the manufacturer and the distribution center (39.7%), at the distribution center (22.1%), and as merchandise moves from one store to another (22.1%).

NRF's Senior Asset Protection Advisor Joe LaRocca appeared live on CNBC to discuss the result of the survey on Organized Retail Crime (ORC). Watch him in this video:

What is Organized Retail Crime?

Organized retail crime (ORC) refers to groups, gangs and sometimes individuals who are engaged in illegally obtaining retail merchandise through both theft and fraud in substantial quantities as part of a criminal enterprise. These crime rings generally consist of "boosters" - who methodically steal merchandise from retail stores - and fence operators who convert the product to cash or drugs as part of the criminal enterprise.

According to congressional testimony and industry experts, ORC losses total an estimated $15-30 billion annually.

Download complete Organized Retail Crime report here.



About the Survey

The 2011 NRF Organized Retail Crime survey was conducted from April 19 – May 10, 2011 by the National Retail Federation. Senior loss prevention executives at 129 retail companies completed the survey with the purpose of identifying the depth of organized retail crime throughout the entire industry. This year’s survey features responses from executives representing department/large box stores, discount, drug, grocery, restaurant and specialty retailers.


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Father's Day Spending this Month is up says NRF

But still trails behind Mother's Day spending.

What makes it higher this year is the topic.


Well, one possible answer has come from BIG Research that conducted the survey. Spending on Dad has taken a backseat for the past few years, but many families "are planning to make up for lost time this Father's Day" says NRF President Matthew Shay.

On average, wives and kids will spend $106.49 for dads compared to last year's $94.32 (that is $12.17 more than last year).

Another possible reason is based on the U.S retail sales trends and demographics. As many of us know, US retail sales rise for 10th month in a row. If we apply that as rule of thumb, dads will get better pampering this month from their families.

In a broader sense, economic analysts say that US spending is back on track and rapidly catches up where it slided down in 2007.

In my opinion, whether or not the trending is going up this month, the more important is that we give due recognition to millions of dads. There's no other time it makes more sense to celebrate the "man who makes it all better than Father's Day."


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Martha Stewart Hires Blackstone Group for her Comeback

In a statement released today, famous business magnate Martha Stewart, also the founder of Martha Stewart Living Omnimedia (MSLO) will rejoin the board of directors of the company in June 6 of this year. Shares of Martha Stewart Living shot up 32% following the news.


Martha Stewart, the company’s largest shareholder, also was pleased about the move to hiring Blackstone Group to “take our business and iconic brand to the next level" the statement said. Blackstone Advisory Partners, the investment banking arm of the Blackstone Group, was hired for the task to "review and respond" to investors who have expressed an interest in partnering or investing with MSLO.

Once chairman and chief executive office of Martha Stewart Living, She had to relinguish her position and left the board after her conviction in 2004 for obstruction of justice and served 5 months in a federal prison. 

Martha Stewart wearing the Home Depot orange apron. Photo
courtesy of eEcostyle.com 

The reason why I brought up this news is somewhat interesting. Blackstone has been helping to revive the once dying business empire of Martha Stewart Living after three years of falling revenue. In fact, the results are somewhat promising. But did you know that it is the same private equity firm which MSLO has hired to take up its business branding to a higher level, that acquired a controlling interest at RGIS LLC in March 2007?

After the inventory company had lost $27 Million recently in a FLSA class action settlement case to tens of thousands of current and former employees, I am interested to know how Blackstone Group will be able to help the inventory provider regains back lost financial and business opportunities to a higher level. Although I am not crossing my fingers but it will be a challenging task to perform. 

About Blackstone Group:

The Blackstone Group is a global alternative asset manager and provider of financial advisory services. The firm's asset management businesses include the management of corporate private equity funds, real estate funds, mezzanine funds, proprietary hedge funds and closed-end mutual funds. Blackstone also provides M&A and reorganization advisory, as well as private placement services.

It is one of the largest private equity firms and alternative asset managers in the world, with more than $98 billion in assets under management and such notable holdings as Hilton Worldwide, Equity Office Properties Trust, The Weather Channel, and Universal Parks & Resorts. Blackstone has 17 offices around the world.

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Osama is Alive! At Least in Some Retail Stores

Well, immediately after that breaking news about Bin Laden's death, many of us have mixed feelings about the end of the US' Most Wanted Man. But for many retail stores, the message is very clear: it is a great opportunity to make money... while the news is still hot.

In tough economic times, it takes a lot of creativity to make money.

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McDonald's to Hire 50,000 Employees...in 1 Day

Image courtesy of McDonald's Corporation

Dubbed as, "National Hiring Day", McDonald's Corporation plans to hire up to 50,000 workers nationwide on April 19. You don't have to wait for that day to submit your job application. You may do it now.

This is probably the more ambitious hiring event of the company since the economic slowdown 3 years ago. Currently, the company has more than 14,000 restaurants and more than 600,000 workers across the United States.

Positions for hire vary from management positions, store crew, and logistics positions according to its website. Management positions can have as high as $50,000 a year salary, and store crew positions can have $8.50 an hour depending on the State you live. Current federal minimum wage is $7.25 an hour.

The McDonald's headquarters complex, McDonald's Plaza,
located in Oak Brook, Illinois.

Although many labor and economic analysts say that it is too early to predict, massive hiring all over the nation is a good sign that the economy is in its way to recovery. Just recently, the US Department of Labor and Statistics announced that there was a gain of 216,000 new jobs created in March alone, pushing the unemployment rate improves by 1% from 9.8% last year to 8.8% this month, the lowest level in 2 years.

So, if you are interested, log on to its website and try your luck. You may find yourself working for this $34 billion company in no time.


Important data about McDonald's Corporation:

Revenue:                    US$24.075 billion
Operating Income:      US$7.473 billion
Net Income:               US$4.949 billion
Total Assets:              US$31.975 billion
Total Equity:               US$14.634 billion
Employees:                 650,000 Current


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