Lowe's is planning to close around 51 of its home improvement stores, including 30 in Canada due to underperforming results from those locations. As part of a restructuring initiative, Lowe’s CEO Marvin Ellison plans to close stores whose sales are not reaching expected results. Lowe's main competition is Home Depot whose sales far exceed the sales of Lowes.
Ellison, who joined the company as CEO in May, has already made major strategic decisions, including closing all of its Orchard Supply Hardware stores and slashing inventory at stores. Ellison insured that most employees currently employed at closing locations will be offered similar jobs at nearby stores. Most of the stores being closed are within 10 miles of another store which hopefully will ensure a smooth transition for employees. Share prices are expected to also be effected, with an anticipated earnings reduction of between 28 cents and 34 cents per share.
Cities mostly affected by the closures will be stores in New York, Texas, California and Rona outlets in Ontario, British Columbia and other Canadian regions. Rona, Canada’s biggest home improvement chain, was purchased by Lowe’s in 2016 for about $2 billion, adding about 700 stores under their management. Lowe’s, operates over 2,000 stores in North America, and expects the store closures to be completed by February of 2019 at the end of the fiscal year.