Lowe's To Shutter Underperforming Stores In U.S., Canada
Lowe’s Cos. is closing a number of stores that it deems underperforming, which the company says is part of its "ongoing strategic reassessment" that will allow it to focus on its most profitable locations.
In the United States, Lowe's is closing 20 stores, most of which are within 10 miles of another Lowe's store. In Canada, Lowe's is closing 31 stores.
The U.S. closures are scattered geographically, including four stores in California and two each in Illinois, Michigan, Missouri and New York. The New York closures are the only two Lowe's locations in Manhattan — one on the Upper West Side and one in Chelsea.
The company is closing one store each in Alabama, Connecticut, Indiana, Louisiana, Massachusetts, Minnesota, Pennsylvania and Texas.
"The store closures are a necessary step in our strategic reassessment as we focus on building a stronger business,” Lowe's President and CEO Marvin Ellison said in a statement. “... we are making every effort to transition impacted associates to nearby Lowe’s stores.”
The move represents a relatively small number of stores considering the overall scope of the company, which operates more than 2,370 locations in the U.S., Canada and Mexico.
Lowe’s expects to close the impacted stores by the end of its 2018 fiscal year (Feb. 1, 2019). The company intends to hold store closing sales at most of the locations, with the exception of a few stores in the U.S. that will close immediately. Lowe’s has tapped Hilco Merchant Services to help manage the process in the U.S.
This isn't the first time Lowe's has trimmed its portfolio and staff in the name of competitiveness.
Last year, the company laid off about 125 tech workers, mostly at its Mooresville, North Carolina, HQ. Nearly 100 corporate tech jobs were eliminated in late 2016, and in early 2017, the company cut about 2,400 full-time jobs, mostly at its stores. Then it eliminated another 500 corporate jobs, mostly in Mooresville, but also in Wilkesboro, North Carolina.
During Lowe's Q2 earnings call in August, Ellison said the company was exiting its Orchard Supply hardware operations, expecting to close all 99 stores by the end of FY 2018. Those locations are in California, Oregon and Florida, as well as one distribution facility.
The company also decided to cancel $500M in planned capital projects for 2018.
"Specifically, we’re eliminating projects that were not focused on improving our core business, did not deliver productivity for our associates and did not meet our hurdle rate," Ellison said. "Instead, we will reallocate that $500M to our share repurchase program."