Lowe’s to shut 51 underperforming U.S., Canada stores
Lowe’s is closing 51 underperforming stores across the U.S. and Canada.
The Mooresville, N.C.based home improvement retailer announced early Monday that it will shut down 20 stores in the U.S. and 31 in Canada in an effort to “focus on its most profitable stores and improve the overall health of its store portfolio.”
Lowe’s said it will conduct store-closing sales, and that all of the affected locations are expected to close by Feb. 1, the end of its 2018 fiscal year. Its two Manhattan stores will close immediately, and the inventory from those stores will be transferred to nearby locations, the company said.
In a research note Monday, Credit Suisse analyst Seth Sigman said Lowe’s decision is “a positive step towards improving productivity of the chain.” Sigman noted that the stores set to close may have been hurt by their proximity to Home Depot stores and other Lowe’s stores.
Of the U.S. stores being closed, 75 percent have another Lowe’s within 10 miles, and 90 percent have a Home Depot store within 10 miles, Sigman wrote.
Lowe’s said affected U.S. workers will have the opportunity to transfer to similar roles at nearby stores.
Lowe’s will offer severance to those who aren’t offered jobs at nearby stores, as well as to eligible Canadian employees, spokesman Steve Salazar said. “We will work hard to ensure this transition is as smooth as possible for our associates and customers,” he added.
Lowe’s currently operates 2,390 home improvement and hardware stores, including 1,740 in the U.S. The majority of the Canadian stores set to close are under the Rona banner, a chain that Lowe’s bought in 2016 for $2.3 billion.
It’s unclear how many workers are affected. Lowe’s said employees in the affected stores were notified of the closures Sunday evening.
Collectively, the stores slated to close were losing more than $34 million a year for Lowe’s, CEO Marvin Ellison told employees Monday morning in an internal memo obtained by the Observer.
“Some of you may ask the question, ‘If these stores are performing so poorly, why didn’t the previous management team close them?’ That’s a great question that I cannot answer,” Ellison said.