Home improvement store Lowe’s announced Monday the company is closing 20 underperforming stores in 15 states. Ten locations closed at the end of business Sunday, October 16. The remaining 10 locations will close within approximately one month, following an inventory sell-through.
Approximately 1,950 employees will be affected by these closings. Employees will receive pay and benefits for 60-90 days. In addition, Lowe’s will be working with local government agencies to help employees with outplacement assistance.
In addition, the company announced it has discontinued a number of planned new store projects. Lowe’s now expects to open 10 to 15 stores per year in North America from 2012 forward, compared to a prior assumption of approximately 30 stores per year. The company is on track to open approximately 25 stores in 2011, as planned.
“Closing stores is never easy, given the impact on hard-working employees and local communities,” said Robert A. Niblock, chairman, president and CEO. “However, we have an obligation to make tough decisions when necessary to improve profitability and strengthen our financial position.
“Lowe’s remains committed to making strategic investments and focusing resources in a manner that will generate the greatest shareholder value, enhance the customer shopping experience and create sustained customer loyalty over the long term,” added Niblock.
The expected financial impact of today’s announcements of $0.17 to $0.20 per diluted share was not contemplated in the business outlook for fiscal 2011 which the company provided on August 15 when it released its second quarter earnings. Additional details regarding the impact of the store closings will be provided in the next quarterly earnings release on November 14.
None of the Lowe’s stores in Missouri are affected.
The store closings include two stores in Illinois outside of Chicago; the rest are in California, Colorado, Louisiana, Maine, Minnesota, Mississippi, New Jersey, Rhode Island, Virginia, Washington and Wisconsin.
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