SAN JOSE, Calif. (KTVU) - Monday, Lowe’s home improvement store executives announced the closing of 51 stores in two countries. The move comes as an attempt to get the company back on solid financial footing. Nearly three months ago, Lowe’s cut ties with Orchard Supply Hardware, closing all 99 stores nationwide. That hasn’t steadied the ship, leading to more cost-cutting measures closer to home.
The news came as a shock to regular customers. Two Bay Area stores, including one in San Jose will be closing its doors for good.
“I thought this would be an ideal location. This is the last location I thought would go,” said Jennifer, a Lowe’s customer who didn’t want her last name used.
Lowe’s management announced the closing of 51 stores in the U.S. and Canada. Most are north of the border, four are in the Golden State, including one in South San Francisco, and one on Newhall Drive, next to Avaya Stadium. In a statement, officials say the closings, "Improve the overall health of the store portfolio and grow our core home improvement business.”
“It’s a reasonable assumption that somebody screwed up. And this was the best they thought they could make of it,” said San Jose State University strategic management professor Robert Chapman Wood.
He says Lowes has been struggling against the goliath that is Home Depot, and the growth of E-commerce. As an attempt to stop the bleeding, managers in August axed the entire Orchard Supply Hardware chain of stores.
“It’s depressing. OSH is closed. It’s getting hard to find a hardware store.” said Lowe’s customer Jim Smith.
But profitability remained elusive, leading managers to turn the ax inward in an attempt to right their ship.
“It’s very common in this situation where new people come in they see the big sprawl of problems and they figure they can’t really solve them all, so figure they’ll get rid of some of them by getting rid of a whole piece of the business,” said Prof. Wood.
Company officials say impacted workers will have an opportunity to transfer to nearby stores, or take severance packages. Lowe’s executives say closing underperforming stores allows them to strengthen the remaining 23-hundred, which will transform the company. It could also, inadvertently, push loyal customers to the competition.
“Where am I gonna go shopping?,” asked Lowe’s customer Ken Pearson. In response, customer Jim Smith said, “Home depot, is the last man standing for most of the home products."
This, as the new realities of brick and mortar retail hit home, just before the holidays.