The 2020 Mid-Year Economic Update_long

The Home Depot on Interline Brands: You Complete Me

CEO: No plans to continue to acquire more capability.
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With The Home Depot's acquisition of Interline Brands, the big-box retailer says it will fill a hole it's had in serving the professional contractor. "In today's environment, we have the ability in many of these spaces to handle the remodel portion of the business," President and CEO Craig Menear said in a call to discuss the company's second-quarter results. "But we don't do as well on the maintenance and repair portion."

Interline, which is focused on the MRO side, doesn't have the remodel element, Menear said, so bringing the two companies together will let The Home Depot take an "end-to-end approach" with its customers.

But don't look for the same type of acquisition activity the industry saw with the buildup of HD Supply a decade ago. This acquisition targeted support for the pro customers at The Home Depot, Menear said.

"We don't have any intent at this point to continue to acquire more capability," he said. "We believe with the acquisition that we've made that we've actually acquired the capabilities that we want to have, and we'll now focus on our customers in both sides of the organization and grow them."

The core of these moves is heightened focus on the professional contractor customer. "We've been focused on the pro for quite some time," Menear said. "But we do believe we have a fair amount of opportunity to expand our share of wallet penetration with this customer. … We believe [this acquisition] is an opportunity for us to expand the share of wallet."

Menear didn't provide any specific details during the call on how the company planned to integrate Interline Brands into The Home Depot, but during the quarter, The Home Depot created a new outside sales and service team, led by Bill Lennie. Menear says the team will help align its pro, MRO and installation services functions.

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