Frank Blake, Former Home Depot Chairman & CEO, joins Yahoo Finance’s Alexis Christoforous and Brian Sozzi to discuss how retailers can survive the coronavirus pandemic.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back to "Yahoo Finance Live", where we have a early morning rally underway on Wall Street right now. I want to welcome to the program Frank Blake. He is the former CEO of Home Depot.

Frank, good to see you here. You were the-- you were the head of Home Depot during a trying time, during our great recession of 2008 and 2009.

I'm sure it can be difficult to sit back during a crisis such as this and say, you know-- and not say to yourself, what would I do if I were CEO right now, as you watch this pandemic unfold and the corporate response. What are your feelings, specifically your feelings on how Home Depot has responded thus far?

FRANK BLAKE: Well, first, good morning, Alexis. It's great to join the show. In part [INAUDIBLE], in terms of how Home Depot is doing, I think Home Depot is doing an outstanding job, an outstanding job now taking care of its associates, its employees, also an outstanding job taking care of its customers and interacting with the community.

I [INAUDIBLE] this crisis is so very different than 2007 and 2009, just in terms of the extent of the impact on the economy, the breadth of the impact, and the time frames. I mean, we could see the housing market starting to slow in the summer of 2006. And then that accelerated through, really, 2009 and into 2010.

But as dramatic and difficult as it was, you had some precursors. This was on the country in a matter of weeks or months and then just precipitous, so very, very different in terms of the crisis. Some of the actions are the same. But I'd say this is much more difficult to deal with.

BRIAN SOZZI: Frank, how do you think the retail sector will look post-coronavirus pandemic? Look, I was in my local Home Depot this past weekend. I was only being allowed in one side of the store.

I was waiting-- I had to wait in line. I think a lot of people are going to be shocked by how retailers ultimately come out of this and have a whole bunch of new operating procedures.

FRANK BLAKE: So my sense would be, a lot of those operating procedures over time are going to dissipate and that you've got very different circumstances with retailers. You've got some retailers, like Home Depot, Walmart, Target, Costco, that are performing very essential functions during the crisis and, frankly, other retailers that are just completely shut down. And it's a much more difficult circumstance.

And I'd say, you know, we've all known that there was a general-- I mean, obviously the consumer and customer was getting more and more used to buying things online. And that was increasingly growing. I think this will fast forward that transition.

I was talking to someone the other day who's in the, really, digital marketing space, said that what they expected over a three-year time frame has happened over a three-week time frame. So things are-- that shift in behavior to online, I think, is only going to be accelerated by our response to the virus.

BRIAN SOZZI: That switch to online shopping [INAUDIBLE] coming out of this, are we looking at a world where Walmart, Target, Home Depot, and Amazon will have the most strength? And even particular to Amazon, don't they get stronger from an event like this?

FRANK BLAKE: I think Amazon will do-- will come through this event very well. But I also think interesting behavioral shifts-- I think you'll actually see the Walmarts and Targets and Home Depots and Costcos of the world actually gain in relevance during this time period because, you know, shopping behavior is going to change on groceries. Shopping behavior will change on essentials. And those are some of the strengths of Walmart and Target and Costco in particular.

ALEXIS CHRISTOFOROUS: Frank, at the end of the day, is it going to just be survival of the fittest for the retailers when we come out the other side of this? I mean, those retailers who were weak or had not great business models heading into this, will they even be able to survive on the other side? And in the end, will our retail landscape, at least in the short term, be a lot smaller than it was pre this pandemic?

FRANK BLAKE: I think for sure there will be an advantage to having a strong balance sheet. And the retailers who went into this crisis with a good balance sheet are going to be better positioned. And there are some retailers that had more stressed balance sheets. And I think they're going to have a very difficult time coming to the end of it.

Again, none of us knows what the time frame is going to be for recovery. But certainly having strong cash flow and balance sheet going into this was helpful.

BRIAN SOZZI: Frank, I remember when you would write letters to Home Depot associates, I think it was every Sunday-- handwritten notes.

FRANK BLAKE: Yep.

BRIAN SOZZI: As a former CEO, and you talk still-- you are on the boards of a lot of companies. What are you telling these CEOs? How should they treat employees? How do they keep employee morale going?

FRANK BLAKE: That's a great question, Brian. My comment to folks now who are running companies is, this is the time to be most focused on communication, most focused on communication with your employees, most focused on communication with your board and with your customer.

But it starts with your employees and having a very effective cadence of telling your employees what you're doing, what is happening, taking care of them. And I think a number of-- somebody just prior to this segment was talking about some of the companies that are really doing an excellent job in terms of communication.

My commentary is this is-- this is the event that, five years from now, people are going to be looking back on as setting the culture and tone and heart of an organization, recognizing that the leaders of the organization need to be doing the things that everybody you know is going to be proud of your having done five years from now. This is-- it's just a rare time.

You know, usually as leaders, we're much more focused on, frankly, how's-- how are our financials going? What's the quarter looking like? What's the year looking like? And we're sometimes not comfortable with that less cut and dry part of the business. But this is truly where, as a leader, you're putting a stamp on the sole of your organization.

ALEXIS CHRISTOFOROUS: Well said. Certainly a defining moment for all of us and for corporate America, as you just eloquently laid out. Frank Blake, former CEO of Home Depot, thanks so much for being here. Our best to you. Stay safe.