Home Depot (HD) has been trying to clean up it's image with customers and investors but just as it seems they may be making strides, more weird negative stuff comes out.
First, they send an email to customers stating they "do not nor have we ever" advertised on FOX's "O'Reilly Factor" despit well, having advertised on it. There is a whole email conversation you can view here. I make no comment on the decision on whether or not they should advertise on the show, my only comment is that before they deny ever have been on it, they ought to be sure they never have.
If that was not enough, word comes out of Atlanta that four four purchasing managers were fired because they were allegedly paid millions of dollars in a kickback scheme to insure certain flooring products made their way onto the company's shelves. Jerry Shields, company spokesperson could not say how long the employees had worked for Home Depot but confirmed the products involved tile and other flooring made by foreign vendors based in Asia. The employees were not identified.
Kent Alexander, U.S. attorney for the Northern District of Georgia from 1994 to 1997, could not speak specifically about the case, but said that federal charges are a possibility anytime an alleged crime crosses state or international lines.
Wire or mail fraud charges are likely in these instances he said. Typically each count of wire fraud can yield up to five years in prison and the government could also see whether international statutes were violated.
Now, CEO Frank Blake did take immediate action upon learning of the scheme and fired the employees and this is good, but the damage is done. On Thursday, the company will hold meetings with employees to reiterate its ethical standards.
Home Depot said that the situation would not have a "material effect" on its financial condition. Just it's public image (my statement)
It just seems that HD is turning into the "gang that couldn't shoot straight". A month ago they announced a massive share buyback but did not give a time frame for it's completion and the only result has been a share price fall and their credit got downgraded by rating agencies. Not the result I am sure they hoped for when they planned it.
Now after these gaffs, it seems Home Depot just cannot get it together to instill trust in itself.