US DIY giant The Home Depot is to close its remaining seven big box stores in China and shift focus to specialty stores and online offerings.

The move will cost the company $160 million, including covering severance payments for 850 affected staff and lease termination costs.

The Home Depot has struggled to gain sales momentum in China, a market where the growing middle class find it inexpensive to pay someone to renovate their homes and shun the do-it-yourself concept.

“Closing stores is always a difficult decision,” said Frank Blake, chairman & CEO, The Home Depot in a media statement.

“We are thankful for the dedicated service of our store associates in China, and we wish them all the best during this transition.”

While it is closing its big box stores, The Home Depot is maintaining a team focused on new formats to continue research and development activities. In addition, the company is maintaining two recently-opened specialty stores – a paint and flooring store and a Home Decorators Collection store, both located in Tianjin – and is in the beginning stages of developing relationships with several of China’s leading e-commerce websites, a combination which the company believes is more tailored to Chinese customers’ needs and shopping preferences.

“We’ve learned a great deal over the last six years in China, and our new approach leverages that experience and reflects our continuing interest in providing value to Chinese customers, as well as our shareholders,” said Blake.

The company will continue to employ approximately 170 associates in China, working in the sourcing offices in Shanghai and Shenzhen, which opened in 2002, and working on its new retail formats team and in the specialty stores.

The Home Depot is the world’s largest home improvement specialty retailer, with 2,249 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.