34 Lowes, Rona stores clos­ing across Canada in re­struc­tur­ing

The Peterborough Examiner - - BUSINESS - MICHAEL LEWIS

Lowe’s Inc. says it will close 34 “un­der­per­form­ing” stores in Canada op­er­at­ing un­der the Rona, Lowe’s and Réno-Dépôt names. The clos­ings will start in Jan­uary and in­clude both the Lowe’s Eto­bi­coke out­let and a Rona store in Mississaug­a, along with stores in Aurora, Oshawa and Ajax.

Twenty-six of the stores slated to close op­er­ate un­der the Rona name, part of the home im­prove­ment chain founded in Que­bec 80 years ago and ac­quired by Lowe’s in 2016 for $3.2 bil­lion.

The com­pany said the clos­ings are part of a re­struc­tur­ing that will sim­plify a com­plex mix of mul­ti­ple re­tail brands, but did not dis­close the num­ber of staff that will be af­fected, say­ing some em­ploy­ees may be of­fered the op­por­tu­nity to trans­fer to a nearby store.

Lowe’s has more than 28,000 em­ploy­ees in Canada, while its in­de­pen­dent af­fil­i­ate deal­ers op­er­at­ing un­der the Rona and Ace names have 5,000 more em­ploy­ees.

The clos­ings, an­nounced with Lowe’s third-quarter earn­ings

Wed­nes­day, add to the 31 Cana­dian lo­ca­tions Lowe’s shut­tered at this time last year. The Cana­dian di­vi­sion of Lowe’s cur­rently has more than 600 stores, in­clud­ing 67 stores op­er­at­ing un­der the Lowe’s ban­ner, more than 400 Rona out­lets, 21 RénoDépôt out­lets and 100 stores un­der other ban­ners.

More than a third of the lat­est clos­ings are in Que­bec, where 12 stores are af­fected. Nine stores will be closed in On­tario, six in Al­berta, three in Nova Sco­tia, three in Bri­tish Columbia, and one in Saskatchew­an.

“Clos­ing un­der­per­form­ing stores is a nec­es­sary step in our plan to en­sure the long-term sta­bil­ity and growth of our Cana­dian busi­ness,” Tony Cioffi, in­terim pres­i­dent of Lowe’s Canada, said in a state­ment.

The re­struc­tur­ing also in­cludes in­vest­ments in sup­ply chain ca­pa­bil­i­ties, web plat­forms, ex­ist­ing cor­po­rate stores and an af­fil­i­ated dealer net­work.

The com­pany on a con­fer­ence call with an­a­lysts said some IT func­tions will be amal­ga­mated with cor­po­rate of­fices in the U.S. to elim­i­nate cost du­pli­ca­tion.

Bruce Win­der, a re­tail ex­pert and co-founder of the Re­tail Ad­vi­sors Net­work con­sult­ing firm, said Lowe’s Canada suf­fers from an overly com­plex ar­ray of main and flanker store brands.

It is still strug­gling to play catch-up to Home De­pot, which en­tered Canada in 1994 with the ac­qui­si­tion of the five­store Aiken­head’s Home Im­prove­ment Ware­house in On­tario (then owned by the Mol­son Cos.), and now has more than 180 out­lets across 10 prov­inces.

Win­der wel­comed plans to ease the com­plex­ity of Lowe’s busi­ness model, say­ing sec­ondary brands could be amal­ga­mated or dropped. He said he be­lieves the Rona name will re­main prom­i­nent in Que­bec, but could fade else­where.

A spokesper­son for Lowe’s Canada in an email said the com­pany was not ready to share de­tails of its brand sim­pli­fi­ca­tion strat­egy but re­mains “strongly … com­mit­ted to the Rona ban­ner in the build­ing cen­tre mar­ket seg­ment. This is true for our cor­po­rate net­work across Canada as well as for our dealer net­work. Re­gard­ing Ace and Dick’s Lum­ber, we are cur­rently re­view­ing all our strate­gic op­tions.”

The clos­ings hit Que­bec par­tic­u­larly hard, but Que­bec Econ­omy Min­is­ter Pierre Fitzgib­bon sug­gested the prov­ince will not be able to in­ter­vene in the hope of sav­ing jobs.

Fitzgib­bon said the U.S. gi­ant seemed to re­spect an agree­ment signed with Ot­tawa af­ter Lowe’s ac­quired Rona for some $3.2 bil­lion in 2016.

He told re­porters he could not di­vulge de­tails of the deal, but aimed to call his fed­eral coun­ter­part af­ter the new Trudeau cabi­net was an­nounced Wed­nes­day af­ter­noon.

Lowe’s made a half-dozen com­mit­ments in 2016 that in­volved jobs and the es­tab­lish­ment of a Cana­dian head of­fice for Lowe’s in Bouchervil­le, across the St. Lawrence River from Mon­treal and home of Rona, a now-80-year-old Que­bec hard­ware in­sti­tu­tion.

Bloc Québé­cois Leader YvesFranço­is Blanchet on Wed­nes­day de­nounced the clos­ings and called on the fed­eral gov­ern­ment to dis­close de­tails of the 2016 pledges.

With files from The Cana­dian Press

RENÉ JOHN­STON TORONTO STAR

Clos­ings in­clude the Lowe’s Eto­bi­coke out­let and the Rona in Mississaug­a, along with stores in Aurora, Oshawa and Ajax.

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