Yesterday Home Depot announced the shutdown of its 34 EXPO design stores, five Yardbirds home improvement stores and seven HD Bath stores, in a bid to further refocus the company.

Once the fastest-growing retailer in history, Home Depot has fallen on hard times in recent years. The company announced that fiscal 2008 sales results would show an 8 percent decline. In a BusinessWeek.com article about its decision to shutter the EXPO locations, Home Depot management said, “Continuing this business would divert focus and resources from the company’s core ‘orange box’ stores.”

That’s a smart realization, and it has been a long time coming. Frank Blake, Chairman and CEO of Home Depot since 2007, has been hard at work trying to clean up the mess the company found itself in after losing its original focus on well-staffed, well-stocked stores catering to retail do-it-yourself customers. While Home Depot wandered, its most aggressive competitor (Lowe’s) focused on stealing market share.

Home Depot still has a lot going for it, including a strong brand, great real estate and immense market power. And in recent months the company’s management team has appeared to recognize how damaging a loss of focus can be. With the economy still in shambles, the road ahead remains rough–all the more reason why Home Depot’s limited resources should be directed to supporting its core concept. The company may be a fixer-upper, but it still has a lot of potential.