Home Improvement retailer Lowe’s Canada announced November 20 that it plans to close 34 stores across Canada early in the new year, including B.C. locations in Surrey, Osoyoos and Prince George, because they are “underperforming.”
Shares in the North Carolina-based parent Lowe’s Companies Ltd. (NYSE:LOW) closed up nearly 4% on the news. The venture operates more than 2,200 home improvement and hardware stores that employ approximately 300,000 associates, so the retrenchment is a tiny fraction of the company’s footprint. It has about 600 corporate and independent affiliate dealer stores in Canada.
Investor bullishness may also have stemmed from the company also announcing US$17.4 billion in quarterly net sales, which was essentially flat year over year. Net earnings increased nearly 67% in the quarter to US$1 billion, from $629 million in the same period a year ago. The company also increased its earnings guidance.
Lowe’s Cos. Ltd. is the second largest home-improvement retailer in the world, after Home Depot (NYSE:HD), which has been increasing sales yet disappointed investors yesterday (November 19), when it announced earnings and guidance that failed to meet expectations and the company’s share price slumped more than 5%.
The Lowe’s Canada part of Lowe’s Companies Ltd. operates banners such as Lowe’s, RONA, Réno-Dépôt, Ace and Dick’s Lumber, and it has struggled in Canada since it took over Rona in a $3.2-billion transaction in 2016.
The Surrey location at 6965 King George Boulevard, set to close on February 19, is one of four Lowe’s Canada locations in Metro Vancouver.
Other local stores are at:
•2727 East 12th Avenue, Vancouver;
•1225 Sumas Way, Abbotsford; and
•1085 Tanaka Court, New Westminster, which was the company’s first store in B.C.
Lowe’s Cos. Ltd. has a history of announcing that it will close clusters of stores.
In November 2018, it announced plans to shut 27 stores, including nine in Quebec – most of which were branded Rona.
In 2011 when the company made much fanfare about opening in New Westminster’s Queensborough district, the move followed what was then a recent announcement that it would close 20 U.S. stores and lay off 1,950 employees.