34 Lowes, Rona stores closing across Canada in restructuring
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