Published: Fri, November 22, 2019
Markets | By Otis Pena

Lowe's says they will close 34 underperforming stores across six provinces

Lowe's says they will close 34 underperforming stores across six provinces

As Lowe's Companies (LOW) closes 34 stores and restructures its struggling Canadian business, one retail expert says the company may consider exiting the Canadian market entirely if operations don't improve.

North Carolina-based Lowe's bought Rona in 2016 in a deal valued at $3.2 billion.

Lowe's operates 2,004 home improvement and hardware stores in the US and Canada, as of November 1, the chain reported.

Three years on, Lowe's has announced the shutdown of a total 65 locations in Canada, sparking further backlash in a province sensitive to foreign takeovers.

Two Reno-Depots in Ontario and Quebec are also part of the 34 stores that are affected by these closures.

The Home & Garden RONA on Pinebrush Road will be closing its doors early in the new year. The deal was approved by the federal government with the Economic Development minister at the time saying about Lowe's, "They're very committed to jobs here in Canada, they're very committed to having senior management here in Canada".

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The North Carolina-based company has been undergoing a wider restructuring since Ellison stepped into the CEO role in July of a year ago. The company reorganized the corporate support structure in Canada to better serve their stores and decide proper product assortments on simplified Canadian store banners to provide a better consumer experience.

With 34 locations closing across the country, there are bound to be many employees affected by the closures.

Lowe's could attract more "regular shoppers" by distinguishing itself from Home Depot, he added, stressing "the softer side of home improvement". The company said it "strongly disagrees" with the conclusion.

Lowe's third-quarter earnings of US$1.05 billion, or US$1.36 per share, beat the US$1.35 per share that analysts surveyed by Zacks Investment Research.

The release also states employees impacted will be supported through the transition, with eligible employees being offered a chance to transfer to a nearby store.

Lowe's expects full-year earnings of $5.63 to $5.70 per share, up from a forecast of $5.45 to $5.65 per share.

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