The wake left behind the Nardelli resignation has been very choppy for "Big Orange."    First, a little history.  In late 2006, Ralph Whitworth, a principal of investment fund Relational Investors LLC (who own 1.3% of HD shares) threatened to launch a proxy fight for a board seat if the company refused to revisit its strategy.  At the top of Whitworth's list -- spinning off the low-margin supply (wholesale distribution) business.

On February 5th, HD announced that David Batchelder, a Relational principal, will join the board effective February 22nd.  The official release is below:

http://ir.homedepot.com/ReleaseDetail.cfm?ReleaseID=228470

One week later, on February 12th, the company announced that it will "evaluate strategic alternatives for its HD Supply(SM) business..."  For more info, read below:

http://ir.homedepot.com/ReleaseDetail.cfm?ReleaseID=229509

Sound familiar?  Apparently, Mr. Whitworth carries some clout with HD, as not only did he get the seat, but the reassessment of the wholesale distribution strategy. 

Finally, to add insult to injury in what has been a tumultuous beginning for Frank Blake, 4th quarter 2006 net earnings were down 28% from 4th quarter 2005.  Blaming disappointing results on the "macroeconomic factors" of a drop in existing home sales and new home starts in 2006, Blake told investors to expect that "re-investment in the company's retail store base"  will lead to long-term benefits for the company.  Motley Fool has an interesting article about how Nardelli's strategy to move from a do-it-yourself to a do-it-for-me (DIFM) company may have hurt the company:

http://www.fool.com/investing/value/2007/02/21/home-depot-needs-repairs.aspx

It would seem that Mr. Blake will be earning his money if he can turn this ship around anytime soon.