Lowe's retrenchment means store in Rogers will close

  • Article by: JACKIE CROSBY , Star Tribune
  • Updated: October 18, 2011 - 9:25 AM

The home improvement chain is closing 20 stores because of underperformance.

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A deserted Lowe's store is seen in Biddford, Maine, on Monday, Oct. 17, 2011. Lowe�s closes 20 stores nationally, including one in Biddeford, having already taken the outside sign off the building.

Photo: Pat Wellenbach, Associated Press - Ap

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Home improvement chain Lowe's Cos. said Monday that it is closing 20 stores and slashing its future store openings as it tries to contend with slow sales and a still-struggling housing market.

The Lowe's store in Rogers is among 10 underperforming stores that are scheduled to close within a month. Another 10 stores were shuttered Sunday.

About 1,950 employees in 15 states will be affected.

The retailer, based in Mooresville, N.C., said it also expects to open 10 to 15 stores a year in the United States and Canada starting in 2012, down from previous projections of 30 a year. The company will stay the course with the 25 stores planned for this year.

"Closing stores is never easy, given the impact on hard-working employees and local communities," Lowe's CEO Robert Niblock said in a statement. "However, we have an obligation to make tough decisions when necessary to improve profitability and strengthen our financial position."

The company said it will take a charge of $345 million to $415 million in the second quarter for costs associated with closing the stores.

Niblock has streamlined operations this year and closed seven stores in August after sales at older outlets trailed Home Depot Inc. for the ninth straight quarter. Lowe's cut its forecast for fiscal 2011 profit that same month, saying consumers were scaling back home-improvement projects.

"They're taking a finer-tooth comb to operations and stores they're going to open going forward, an acknowledgment that they're a mature company in a mature industry," said David Strasser, an analyst at Janney Capital Markets in New York.

Lowe's is the second-largest home improvement retailer, behind Home Depot. Sales last year were $48.8 billion.

Lowe's shares rose 10 cents Monday to close at $20.89.

Bloomberg News contributed to this report. Jackie Crosby • 612-673-7335

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