Home Depot CEO Frank Blake is stepping down November 1, ending a seven-year tenure during which the home improvement chain handily outperformed its main rival, Lowe’s.
The company said on Thursday that Blake will be replaced by Craig Menear, a 17-year Home Depot veteran who has led U.S. retail operations since February. Menear had long been seen as a leading contender to succeed Blake.
“Craig has taken on increasing leadership responsibility over the last several years and has excelled in all his roles,” Blake said in a statement. “As a long-time Home Depot veteran, Craig lives our values and embodies our culture.” Blake will remain active with Home Depot by staying on as company chairman.
Home Depot gave no reason for the change. But it had been expected for some time.
While Home Depot’s retail stores have performed well, the company is pushing to build up its online sales, which are growing fast but remain just 3.5% of overall sales. Under Menear, online revenue rose 50% to $2.3 billion in 2013, and the number of items available online grew seven-fold to 700,000. He also got kudos for taking Home Depot’s self-branded merchandise to 15% of total sales. Both online and private label have been priorities for the company.
The CEO change was well received by Wall Street. “We believe that Home Depot’s successes since 2009… have been based, in large part, on its impressive merchandising strategy,” Barclays Capital Market analyst Alan Rifkin wrote in a note, saying that Home Depot was “in good hands” with Menear.
Blake, a former General Electric executive, oversaw Home Depot’s business development operations from 2002 until he moved into the corner office. On his watch, Home Depot has beaten smaller rival Lowe’s (LOW) in 19 of the last 20 quarters in terms of comparable sales. Blake’s successful tenure came from his focus on Home Depot’s main retail business, including decisions to drop unsuccessful initiatives. For example, in 2012, he killed off an expansion into China that had failed to gain much traction. He preferred to find growth from improving Home Depot rather than pursue an aggressive store opening program of the kind that has hurt other retailers.
Blake succeeded Robert Nardelli, whose tenure left employee morale low. Blake undertook a major overhaul of Home Depot’s supply chain and technology systems, plowing billions of dollars into improving operations and freeing up workers to go work the sales floor and give customers better service.
Since Blake’s CEO stint began, Home Depot shares (HD) have a return of 148% compared to 51% for the broader S&P index.