Why Home Depot is failing in China: 4 theories

The massive home improvement chain is shuttering all seven of its big-box stores in China — even while competitors like Ikea are making money hand over fist

A 2006 event in Beijing announces Home Depot's expansion to China
(Image credit: AP Photo/Elizabeth Dalzie)

This week, Home Depot announced that it would close all seven of its big-box stores in China, all but ending an investment that will cost the company some $160 million. (The home improvement chain will retain two, much smaller specialty stores in China, as well as an online presence.) Home Depot, like almost every big company on the planet, saw a huge opportunity in China, where an expanding middle class has opened up a vast new market and the potential for profits. So what went wrong for the Atlanta-based company? Here, four theories:

1. The Chinese economy is slowing down

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