Lowes closing 20 stores

[Mark Ashmeade]

If you own 1700 stores, closing 20 of them is nothing more than aligning yourself with the market. Walmart do much the same. They close older stores and build new ones. Refit some of them etc. Where I live (metro ATL) there's a stretch of US-41 of say 5 miles. In that 5 miles, there's a closed Walmart, now a nightclub, a newly refitted regular Walmart that used to be a Supercenter, only about 10 years old, half of it closed down in the refit and downgrade from Supercenter, and a Brand spanking new Supercenter at the end of the 5 mile stretch. They just aligned themselves with the market.

HD did much the same a year or so ago. Closed a few stores, announced a few new ones.

Of course ATL is HD-ville. I must have 10 of them within 10 miles, so don't go to Lowes much, but they have a store right in the middle of the 5 mile stretch I was talking about.

[Joe Scharle]

We must have a dozen Lowe's around here; some are a driver and 9 iron apart. Lots of Home Depots as well. Hate to see any closings of anything.

[Chris Tsutsui]

Lowes might be closing 20 stores, but they're opening 15 so it's not like they are throwing in the towel.

I have 1 lowes nearby and 3 home depots all within about 2-5 miles from house. I go to Lowes still because they have better clearance and it just seems less chaotic. However Home Depot has a better price with Southwire products so It's not like I want HD to close.

Lowes was clearancing out ALL of their sandpaper for 50% off in the tools dept last time I went. Looks like I'll have to check out Lowes Westminster if they arn't already closed and see if they will be closing out anything.

[ian maybury]

I can't speak for Lowes as I'm not US based, but depreciation/the cost of servicing capital already spent must introduce a significant overhead issue for these box stores - given the amazingly high rate at which most of them (over here anyway) have expanded.

My sense is that this business model must be very heavily growth dependent - it's all fine if each store makes its sales numbers, but the house of cards could quickly come down if they don't. They probably don't really have the option of just cutting back their costs and hanging in there like say a family business that's long since paid for would.

Another indication of this sort of thing is probably the way (again over here anyway - it's scary how expensive most are now. Sneakily so - a main item gets put up at a decent price, but the accessories you need to run it turn out to be scarily expensive) they have shown a strong tendency to trumpet about price reductions, but to actually raise prices when sales volumes drop. The hope is probably that those buying in a weak market really need the stuff, and are not so price sensitive - but another view might be that the first response forced by a reduction in revenues as a result of reduced volume and high depreciation costs is to up prices and hope for the best.

If that doesn't work you look for a way out from under the overhead cost....

ian

[Anthony Whitesell]

I think you are both right. The fixing up to get ready to sell (revamping kitchens and other things to make the house more saleable) would be down. The fixing up to make the house more liveable (finishing the basement for family rooms or more bedrooms, additional bathrooms, and so on) should be up.

Almost right. According to the articles I've read, they're closing the stores because sales are down because people don't have the money to do the renovations even though, as you mention, the time is right. Stuff is cheap and prices are down. If you do an improvement now, the cost of the improvement will be low and the value improvement as well as the value of the home will rise. Almost a three for one...if you have the money to do it.

[Von Bickley]

I have 2 Lowes and 1 Home Depot that I use. I have been well pleased with all 3 stores and I am always treated very nice. Some of these employees recognize me and always take care of what ever I need.

[Gary Benson]

The Denver store is only about 4 miles from my house, and until now, I did not know that it existed. Odd place, no access, not a surprise that they would close this location and rely on the 4-5 other retail locations in town.

[Dave Lehnert]

For a chain of over 1700 stores, closing 20 is nothing. Many places go under trying to keep stores open that are not making money. Lowe's is also opening 25 stores by year end.

[Ken Cohen]

I live near one of the closed stores and used it regularly in addition to my nearby HD. Relative to the HD it was better stocked, neater, brighter -- and empty. Even on weekends, I always wondered how they survived with so few customers. I guess the answer is now clear.

[Anthony Whitesell]

I definately rank my nearest Lowe's as neater, brighter, cleaner. Come the weekend...packed. During the week, not so much.

[james bell]

I had a summer place in the country of va, and it was pain to work on weekends -local hardware stores, 20 miles away, closed at 1pm sat and not open Sunday's. So a lot of multi-weekend projects. Lowes opened three years ago about 35 miles away - opened sat late and Sunday - down her full time now and I do support them as much as possible, whole also trying to support the local stores whenever possible.There is a place o "big box" stores.

[John Fabre]

I must be lucky, I have four Lowe's, two Home Depot's and 40 church's (one every block) in a 20 mile radius.

[Peter Kelly]

I'm sure Lowe's is closing underperforming stores. It's called exercising financial discipline and Lowe's is a business, not a benevolence society. A look at the tax rate in the areas of closure also offers some insight into the reason behind the move. Just saying...

3 of those 20 stores are in New Hampshire where there is neither sales or income tax. Just saying.


Twenty more empty strip malls to further scar the landscape

[Don Bullock]

Perhaps there are just too many of them. It seems like wherever there is a Home Depot, there is also a Lowes nearby. Sort of like McDonalds and Burger King.

Also, as property values decline, folks are less inclined to fix their home...at least the majority of folks that seem to treat their home as an investment. And then there is job insecurity and less disposable dollars for improvements.

With both of these consideration, it is probably a simple matter of over-saturation.

Jeff

I think Jeff has the right idea here. While I prefer Lowes over HD there are times when I can't find what I need. In our area many of them are on opposite sides of the freeway which makes it very convenient to compare stock and prices. I'm sure that it's starting to hurt both stores since fewer people are remodeling and there is much less construction. I know in the case of the two California stores that are closing one is in an area where new construction has dropped dramatically. The other store is in an area that has had a big transition in the population's socio/economic conditions. Many large well established chain stores in that area have disappeared.

As for Menards, I've never been in one. We don't have any in Southern California.

[Carl Beckett]

I consider Lowes/HD as a subset of Consumer products as a whole. The disposable income is definitely a factor. The housing market is a factor - a lot of people were financing improvements via equity withdrawals on their home. Thats harder to do with home prices off 25% - 30% and a shocking number under water still.

Any retailer will turn over a certain number of locations on a regular basis. Sometimes they just dont work out profitably. I hear Best Buy is really struggling (because people arent buying the uplift accessories). I hear Sears is in trouble (even after Kmart bought them, which seemed upside down to me anyway from a brand perspective but I dont think they are doing so well).

In the long run, you want your suppliers making money because guess what - if they dont make money then its a short term supplier to you (they go bankrupt). You can take advantage of a store closure, but these days even this has become big business (read the articles about 'going out of business' sales actually marking items UP, not down)

Overall I find retail/consumer to be a tough business.