The Home Depot

Origin

Bernie Marcus ran Handy Dan, the Los Angeles hardware chain of the Daylin conglomerate, from 1972, with Arthur Blank as his CFO. Ken Langone, the investment banker who had taken Ross Perot's EDS public, found Handy Dan in a Moody's manual trading at two years of earnings and bought nearly 20 percent of it. When Daylin's turnaround CEO, Sandy Sigoloff, bought Langone out in January 1978, he fired Marcus, Blank and their audit manager three months later on a trumped-up labor-relations charge. Marcus had already seen Sol Price's new Price Club in San Diego and had described to Langone the store that would put Handy Dan out of business. At breakfast at the Waldorf Astoria the day after the firing, Langone told him he had been kicked in the ass with a golden horseshoe and that they would go build it. Ross Perot agreed to put up $2 million for 70 percent of the company, then lost the deal in an argument over the old Cadillac Marcus drove. Langone raised the same $2 million from forty investors at $50,000 each for 50 percent, kept 5 percent for himself, and left 45 percent for management. Pat Farrah, whose 130,000-square-foot HomeCo warehouse in Los Angeles was the concept at full size, joined as the fourth founder after HomeCo turned out to be insolvent. J.C. Penney sublet four failing Treasure Island discount stores in the Atlanta suburbs; an investor's wife suggested the name; the orange came from circus-tent canvas bought cheap for signage. The first two stores opened on June 22, 1979.