Home improvement chain Lowe's Cos. announced the closure of another 51 underperforming stores in the United States and Canada, including one in Mankato, as it strives to compete with rival Home Depot in a slowing housing market.
Lowe's gave no detail of job losses in the move, which closes stores in some upmarket areas including Broadway and Chelsea in Manhattan and follows the shutdown of 99 Orchard Supply stores in California.
However, the company did notify the state of Minnesota that it would be eliminating the 124 jobs in the Mankato store, but said those workers would be able to transfer to other locations. In a Worker Adjustment and Retraining Notification letter to the Department of Employment and Economic Development, Lowe's said the store would be closing on or around Jan. 3.
Buffeted in recent quarters by the impact of a long winter in North America, Lowe's has been striving to find ways to catch up with longtime sector leader Home Depot, whose stores each on average generate almost twice as much in sales.
There also are signs that Americans are spending less on housing as prices and demand peak after a seven-year homebuilding spree, although many of the factors underlying the industry's health remain in place.
"The decision was informed by the strategic reassessment work we have been doing over the last few months. ... We plan to continue to evaluate all businesses and elements of our portfolio annually," the company told Reuters.
While Lowe's is far smaller and less exposed to the emergence of Amazon and other online sellers, the closures follow a wave of similar moves by traditional U.S. retailers in the face of greater online competition.
Chief Executive Marvin Ellison began a restructuring after taking over in July and has said he was reviewing its real estate portfolio, promising to remove slow-selling products and end unsuccessful ventures.
The winding down of the Orchard Supply chain cost the company from $390 million to $475 million in write-downs. Lowe's said Monday's announcement would result in charges of 28 to 34 cents, or $300 million, to $365 million in pretax expenses.
The company, which operates about 1,800 U.S. stores and 300 in Canada, said it expects the closures to be completed by February, with the exception of some U.S. stores that are closing immediately.
The 20 U.S. closures are in states including New York, Texas and California, in addition to 31 outlets including two plants in a handful of Canadian provinces. The one in Mankato is at 2015 Bassett Drive.
The company's shares were unmoved by the announcement.
"We view this as a positive step towards improving productivity of the chain," Credit Suisse analyst Seth Sigman said.
"That said, we continue to look for additional progress in driving higher sales in existing stores, and monitor the investment required to do that."