Lowe's closing 31 locations in Canada, mainly Rona stores

Home improvement retailer Lowe's is closing a total of 31 locations, including 27 underperforming Rona stores in British Columbia, Alberta, Ontario, Quebec and Newfoundland and Labrador, and 20 Lowe's stores in the United States.

North Carolina-based chain will also close 20 Lowe's locations in U.S.

Lowe's says it plans to close 51 locations across North America, including 27 Rona stores set to shut in Canada alone. (Alan Diaz/Associated Press)

Home improvement retailer Lowe's is closing 31 locations in Canada, including 27 underperforming Lowe's and Rona stores in British Columbia, Alberta, Ontario, Quebec and Newfoundland and Labrador, along with 20 Lowe's locations in the United States

The North Carolina-based chain said Monday morning that the closures are "part of its ongoing strategic reassessment" of its business.

Only two of the closing locations are currently branded as Lowe's, and both are in Ontario. One in Calgary is a Reno-Depot. The rest are Ronas, the Quebec chain that Lowe's bought in 2016.

Across all of its brands, Lowe's currently has 2,390 stores across North America, including 630 in Canada. Other Lowe's-owned brands include Dick's Lumber, Contractor First and Ace Hardware.

"The decision to close stores is never one that we make lightly. However, following a detailed business review, we believe that this is the right path for the organization's future," Lowe's Canada's president Sylvain Prud'homme said.

"Everything will be done to ensure a smooth transition until the stores are closed, and Lowe's Canada will support impacted employees, including by transferring eligible employees to other locations within our network whenever possible."

These are the stores in Canada that will be shut:

Lowe's is closing 31 locations across Canada, mostly Rona stores. (Scott Galley/CBC)

The chain is also closing 20 Lowe's locations across the U.S. immediately. The Canadian locations will stay open for a bit longer, before being shuttered for good by the end of February 2019.

The company says most employees at U.S. locations being shut down will be offered a job at a nearby store, but the company has made no such guarantee for Canadian workers — who currently number more than 28,000 people across all of Lowe's brands in Canada.

In Newfoundland and Labrador, the six stores slated to be closed currently employ 321 people.

"Everything will be done to ensure a smooth transition until the stores are closed, and all impacted employees will be supported by our HR team," Lowe's Canada told CBC News in a statement.

'We are shocked,' union says

The union representing Atlantic Canada workers said in a statement, "We are shocked by this news and we are equally shocked at the insensitive and disrespectful manner in which these employees were told this news. Meetings were called on Sunday afternoon and Sunday evening hundreds of employees were handed severance letters."

The Atlantic Canada Regional Council of Carpenters, Millwrights and Allied Workers said many of the employees had worked for Rona for decades and "deserved better treatment from this employer."

Lowe's bought rival Quebec chain Rona in 2016 in a $3.2-billion takeover, and soon began consolidating some of those locations into Lowe's stores to streamline operations.

Lowe's has been struggling to find ways to catch up with do-it-yourself giant Home Depot, whose stores on average generate almost twice as much in sales as Lowe's locations do.

Retail analyst Bruce Winder, co-founder of the Retail Advisors Network, said he's surprised it took Lowe's this long to close some of the underperforming stores it acquired in 2016 and consolidate its Canadian presence as much as possible under the Lowe's name.

"If you have too many stores, your sales per store drop to a level where your costs are too high," he says. "It's part of a natural pruning."

Winder says Lowe's is facing a formidable challenger in Home Depot, which expanded to Canada first and as such got a real head start in winning over contractors who remain loyal to it.

Most of the stores Lowe's is closing have other locations nearby, which is no accident, Winder said.

"They're cutting off the bottom rung of stores and hoping that customers in the area just go to a nearby store, and that way they can maintain their revenue," he says.

About the Author

Pete Evans

Senior Writer, CBCNews.ca

Pete Evans is the senior business writer for CBCNews.ca. Prior to coming to the CBC, he had stints at Report on Business, the Financial Post, the Toronto Star, Canadian Business Magazine and elsewhere. Twitter: @p_evans Email: pete.evans@cbc.ca Secure PGP: https://secure.cbc.ca/public-key/Pete-Evans-pub.asc

With files from Meegan Read