Lowe’s has recently announced that they are closing 20 stores in the U.S. and 31 stores in Canada. Four of these stores will be closing in California, located in South San Francisco, San Jose, Irvine, and Aliso Viejo respectively.
This announcement, made on Monday, Nov. 5, said that they plan on closing the stores before February 2019, the end of the company’s 2018 fiscal year. Most of the stores will “conduct store closing sales for most of the impacted locations,” but a few in the US will be closed immediately.
Marvin Ellison, Lowe’s president and CEO, said in a statement, “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.”
This is not expected to affect Lowe’s overall sales, as these 51 stores make up only 2 percent of all locations, according to MarketWatch.
Most of these stores are being closed for underperformance because of locations in close proximity. In an official statement, Lowe’s also said they want to “focus on [their] most profitable stores and improve the overall health of [their] store portfolio.”
A very similar event happened in October 2011. Lowe’s closed 20 stores in the US to improve profitability, according to Reuters. In a statement, Robert Niblock, the CEO at the time, said that they had to “make tough decisions” if they wanted to improve their profits.
After the closings, they had planned on opening 10 to 15 new stores per year, starting in 2012. Previously, they expected to open 30 annually.
This time around, these reforms came about when Ellison, the former CEO of J.C. Penny, was brought in after the previous CEO Robert Niblock retired in March 2018. So far, he’s banned certain paint strippers and is in the process of closing all Orchard Supply Hardware stores. Analysts say that more reforms will be taking shape soon.
As for employees of the closing stores, most are being relocated to other stores nearby. Ellison said, “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.”
At the moment, managers of the closing stores are not accepting questions about the matter.