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There are also indications that Americans are spending less on housing, while prices and demand have peaked after seven years of residential construction.
Home improvement chain Lowe’s Companies Inc. on Monday announced the closure of another 51 nonperforming stores in the United States and Canada as it struggles to compete with competitor Home Depot Inc. in a slowing real estate market.
Lowe’s did not give details about the loss of jobs in the move, which is closing stores in some luxury areas, such as Broadway and Chelsea in Manhattan, and the closing of 99 Orchard Supply stores in California.
In recent quarters, thanks to the impact of a long winter in North America, Lowe’s is working to find ways to catch up with industry leader Home Depot, whose sales generate on average double sales.
It also seems that Americans spend less on housing, while prices and demand have peaked after seven years of residential construction, although many factors underlying the health of the industry remain in place.
“The decision has been informed by the strategic re-evaluation work we have been doing over the last few months … We plan to continue evaluating annually all the activities and all the elements of our portfolio,” the company said. Reuters
While Lowe’s is much smaller and less exposed to the presence of Amazon and other online suppliers, the closures are the result of a wave of similar actions by traditional US retailers. UU In the face of increased online competition.
The new CEO, Marvin Ellison, began a restructuring after taking office in July. He said he was reviewing his real estate portfolio, promising to eliminate the slow sellers and end the failed projects.
Under Ellison, the company also eliminated four executive positions, while creating two new management functions for the stores and the supply chain.
“A new blood in the higher ranks has clearly been a catalyst for this decision, as we believe that the management team is more willing to examine the root causes of UNDER-PERFORMANCE,” said Jonathan Matuszewski, senior analyst. Jefferies.
The gradual reduction of Orchard’s supply chain cost the company between $ 390 million and $ 475 million in amortizations. Lowe’s said Monday’s announcement would result in charges of 28 cents per share at 34 cents per share, pre-tax charges of $ 300 million to $ 365 million.
The company, which operates approximately 1,800 stores in the US UU And 300 in Canada, plans to close the system in February, with the exception of some stores in the US. UU That close immediately.
The 20 closed US sites UU They are distributed in several states, including New York, Texas, and California, and 31 sites, including two plants in some Canadian provinces, have also closed.
Most of the American stores involved are located 10 miles from another store.
The company’s stock was flat.