The Home Depot Inc. is closing its seven big-box stores in China as the company shifts its focus in that market to specialty stores and e-commerce.

As a result of the store closings, the company will record an after-tax charge of approximately $160 million, which includes impairment of goodwill and other assets, lease terminations, severance and other charges associated with closing the stores.

Home Depot, No. 42 in the Internet Retailer Top 500, will maintain its China-based new formats team to continue research and development activities. In addition, the company will maintain two recently opened specialty stores–a paint and flooring store and a Home Decorators Collection store, both located in the northeast China city of Tianjin–and develop relationships with several Chinese e-commerce sites, a combination the company says is more tailored to Chinese customers’ needs and shopping preferences. Home Depot did not identify the e-commerce sites.

“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,” says Frank Blake, chairman and CEO.

The closings will affect approximately 850 employees, who will receive severance packages and job placement assistance. The company will continue to employ approximately 170 people in China, working in product sourcing offices in Shanghai and Shenzhen, which opened in 2002, and staffing its new retail formats team and specialty stores.

In addition to its e-commerce site, Home Depot has 2,249 retail stores in all 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, 10 Canadian provinces and Mexico.