Home Depot announced the closure of 15 superstores and scrapped plans to open 50 others as the world’s biggest do-it-yourself retailer sought to prop up its profits amid the US housing crisis.

The group said that the store closures would affect 1,300 staff, adding that many would be offered jobs at its remaining 2,200 stores.

The closures will prompt the third round of redundancies at Home Depot this year, following 500 job cuts at its Atlanta headquarters in January and a further 1,000 this month in its human resources division.

It will still open about 55 new stores this year, but this is well below the 200 stores it has opened annually in recent years, until 2007, when the figure fell to 100.

The group is bracing for a continuation of the housing crisis, which has reduced demand for home improvement products. It reiterated its expectation yesterday that profits would fall by between 19 per cent and 24 per cent this year.

Frank Blake, chairman and chief executive, said: "By building fewer stores, in the best locations, and making sure our existing stores are profitable, our company will be in a much stronger competitive position."

"We will invest in our core retail business, in this case our existing stores, which drive our most profitable sales," Mr Blake added.

Home Depot’s shares added 60 cents, or 2.1 per cent, to $29.40 in mid-day trading as investors cheered the group’s cost-cutting efforts.

Home Depot announced its store closure plans two days after new data showed that house prices in the 20 biggest cities in the US fell by 12.7 per cent year-on-year in February, according to the latest S&P/Case-Shiller home price index.

On the same day, RealtyTrac reported that house foreclosures had jumped by 23 per cent in the first quarter, against the fourth quarter of last year, and had more than doubled from the year earlier.

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