Why Lowe's is closing 51 stores
CEO Marvin Ellison was brought in earlier this year to transform the world’s second-largest home improvement retailer, and that's exactly what he's doing.
Ellison, a veteran of JCPenney and Home Depot, is making some bold moves to improve the financial performance of the company, including the wind-down of at least 51 underperforming store locations.
To focus on its most profitable stores and improve the overall health of its store portfolio, the company says it will:
- Close 20 U.S. stores. Most associates at these stores will be extended opportunities to transition to a similar role at a nearby Lowe’s store. The majority of impacted stores are located within 10 miles of another Lowe’s store.
- Close 31 Canadian stores and other locations.
“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,” said Marvin R. Ellison, Lowe’s president and CEO. “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.”
In an interview with the Charlotte Observer, Ellison said retooling inventory is one of the “retail fundamentals” that has to be addressed first. In recent years, Lowe’s has been cutting costs and working to boost profits at a time when home improvement retailers otherwise have been benefiting from the strong housing market.
Another “fundamental” to be addressed, Ellison said, is supply chain, an area the retailer will work to update and improve in coming months. Part of the modernization of Lowe’s overall, Ellison says, includes hiring in supply chain, technology and engineering.
Lowe’s expects to close the impacted stores by the end of the company’s 2018 fiscal year (Feb. 1, 2019). To facilitate an orderly wind-down, the company intends to conduct store closing sales for most of the impacted locations with the exception of select stores in the U.S., which will close immediately. Lowe’s has partnered with Hilco Merchant Services to help manage the process in the U.S. and ensure a seamless experience for customers.
A list of impacted stores may be found here.