Lowe’s losing luster

Lowe’s 20 store closures in the US are being seen as a low-water mark.

The home-renovation chain, which made the announcement last week, including 31 in Canada, amounts to the second round of closures in Marvin Ellison’s short tenure as chief executive of the retailer, and analysts say they might not be the last.

Lowe’s said it would go into further details in the next earnings release on Nov. 20.

Bill Fahy, senior credit officer at Moody’s, said the majority of stores that are closing are within 10 miles of another Lowe’s location.

“Twenty stores is “not all that many. Consumers still have a Lowe’s store to go to. If all of a sudden I’m losing a store, I might have to go to the competition,” Fahy said.

Wells Fargo analysts added the closures are “not surprising” and “more could be coming.”

“[It] could suggest the beginning of a broader initiative to improve profitability via real estate rationalization,” analysts led by Zachary Fadem wrote.

Fahy expects more detail about company strategy during its Dec. 12 investor day.

The company announced in August that it would close its Orchard Supply Hardware stores, located in California, Oregon and Florida, and its distribution facility by February.

Ellison became CEO in July, jumping from the top job at struggling department store chain JC Penney.

Shares are up 4.2 percent year to date.