Atlanta, GA, Oct 31—Home Depot CEO Robert Nardelli said the company, which last week sold its stores in South America, would most likely enter the European market through an acquisition. Nardelli said buying real estate and setting up stores in Europe would be slow and challenging given land and permitting restrictions on the continent.

"If we were to go to Europe, we would go through an acquisition," Nardelli said. "We would look at an opportunistic buy to really branch into Europe."

In light of Home Depot's deals to sell nine stores in Argentina and Chile last week, analysts have said Europe is a viable market for global expansion outside North America.

Nardelli said the decision to leave economically troubled Argentina and Chile was based on "what we viewed was really limited critical mass and ability for expansion in those two countries."

He said the retailer was in the near term excited about opportunities in Mexico, which it entered a few months ago with the purchase of four DIY construction stores. Meanwhile, Nardelli said that in the aftermath of the September 11 attacks on the U.S., Home Depot was staying on track with its business strategy, planning to open more than 200 stores this year and hire 40,000 store associates.

"That's kind of going against the grain of what other companies are having to face," Nardelli said.

He said that while Home Depot was seeing a lot of customer traffic, shoppers have become more discerning with their purchases.

"In some cases instead of new siding, they're buying paint. Instead of buying an entire kitchen cabinet, maybe they're buying new hardware," Nardelli said.

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