Amidst the home improvement wars with rival Lowe's (NYSE:LOW), Home Depot (NYSE:HD) has turned to its service business for growth. Last quarter, that segment contributed to the retailer's improving performance by showing 45% year-over-year growth. Bolstering its prospects, Home Depot announced today the purchase of Creative Touch Interiors (CTI), a leading flooring business for homebuilders in Southern California and Las Vegas.
CTI is now part of The Home Depot Supply's Builder Solutions Group, which was launched in 2002 with the strategic acquisitions of Floors, Inc., Arvada Hardwood Floor Company, and Floorworks, Inc. With the purchase of CTI, the Builder Solutions Group now provides its flooring, counter tops, window treatments, and design services from coast to coast. All told, the group operates in 13 states and the District of Columbia.
The CTI purchase extends Home Depot's new strategy of growing its service offerings. Among other recent additions to the company's service business was the November purchase of RMA Home Services, a company that specializes in the installation of replacement windows and siding. Further, Home Depot's foray into services also helps differentiate it from No. 2 home improvement retailer Lowe's, whose not-so-subtle performance has raised the competitive bar.
Home Depot's new strategy looks like a viable pursuit, and could be evidence that there may be some life left in the once-vaunted stock.
Mull over growth in the service business on the Home Depot discussion board - only at Fool.com. Jeff Hwang can be reached at [email protected].
