Lowe’s Is Closing More Than 50 Stores Across North America

Home improvement retail chain Lowe’s has announced the closure of 20 stores in the United States and 31 Canada as a part of a restructuring program.  These stores are not performing at an acceptable rate, which has contributed to the fact that Lowe’s has not been able to keep up with its nearest competitor, Home Depot.  As such, Chief Executive Marvin Ellison has been planning a turnaround, promising to remove the slowest-selling products and end ventures that have been unsuccessful.

For one, the North Carolina-based company has already started the shutdown of its Orchard Supply chain.  This includes 90 store closures, which will lead to write-downs that value between $390 and $475 million.

Lowe’s still operates more than 2,000 stores in North America, but the most recent store closures should be finalized by February. A rule of thumb for the company is to close stores that are within 10 miles of another Lowe’s store.  They also assure that most workers at affected stores will be extended similar opportunities for transitioning to another store at a nearby location.

All in all, the store closure strategy aims to reduce earnings by an amount between 28 and 34 cents per share.  It is important to note, however, that these numbers have not been included in the forecast, which the company had released back in August. In August, Lowe’s said it can expect to earn between $4.50 and $4.60 per share by the end of this fiscal year (which is February).

The strategy will affect stores in these states:

  • Alabama (1)
  • California (4)
  • Connecticut (1)
  • Illinois (2)
  • Indiana (1)
  • Louisiana (1)
  • Massachusetts (1)
  • Michigan (2)
  • Minnesota (1)
  • Missouri (2)
  • New York (2)
  • Pennsylvania (1)
  • Texas (1)

And these Canadian provinces:

  • British Columbia (1)
  • Alberta (2)
  • Ontario (9)
  • Quebec (9)
  • Newfoundland (6)

Lowe’s has also announced a cut to sales and profit outlooks this year.  The company will release its latest earnings report later this month.

In a release, Lowe’s president and CEO Marvin R. Ellison comment, “While decisions that impact our associates are never easy, the store closures are a necessary step in our strategic reassessment as we focus on building a stronger business.  We believe our people are the foundation of our business and essential to our future growth, and we are making every effort to transition impacted associates to nearby Lowe’s stores.

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