Home Depot says store closures part of strategy to focus on core cities

When Home Depot closed its mega-store in Beijing two months ago, many thought the world's largest home improvement retailer was on the verge of withdrawing from the highly competitive market in China.

However, Raymond Chou, president of Home Depot China Retail, said the store never gave up on its goal to become the No 1 player in the mainland market.

'That closure helped us find our strategy going forward. Now we will focus on two core markets in Tianjin and Xian. We'll grow from there, get leadership there and then move on to other markets,' he said.

The road has been bumpy for the American retailing giant since it entered the market five years ago, and in January, the company said it was shutting down its 13,000 square metre shop in Beijing's West Fourth Ring Road following 'a financial and commercial evaluation' of the store's performance.

That was the fifth store the company closed after acquiring all 12 stores run by local home upgrader Home Way in six mainland cities. The move triggered widespread expectations that it might also close the remaining stores in Tianjin, Xian and Zhengzhou.

The speculation was wrong, said Chou, who was appointed to head Home Depot China in June last year.