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Headlines abounded yesterday of Home Depot Inc (NYSE: HD) taking a big haircut on the sale of its supply business. However, taking the big haircut now could mean more money in shareholders' pockets further down the road.Conversely, another retailing behemoth, Wal-Mart Stores Inc (NYSE: WMT), sent out signals yesterday that it may, for the first time, start looking at acquisitions. Sam Walton must be rolling over in his grave.
Wal-Mart's current CEO, Lee Scott, has had a tough time keeping good times rolling at the discount retailer. Whether it is market saturation or poor management decisions, he just cannot seem to get sales growing.
But as Home Depot's board of directors has learned, it is often better to stay focused than to go on an acquisition binge. It will be interesting to see if Mr. Scott wants to learn from Mr. Nardelli's errant ways.
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