AP/Tony Avelar
An Orchard Supply Hardware store.
- Lowe's announced on Wednesday that it will shutter all 99 locations of subsidiary Orchard Supply Hardware, which it acquired in 2013.
- The announcement came during Lowe's second-quarter earnings release, when the retailer cut profit and sales forecasts for the year.
- Lowe's acquired Orchard Supply from Sears in 2013. The stores are generally concentrated in California and Oregon, but there are some locations in Florida.
- Liquidation sales will start on August 23 and finish by the end of the year, when stores will close for good.
Lowe's announced on Wednesday in its second-quarter earnings release that it will close all 99 locations of subsidiary Orchard Supply Hardware.
The stores are generally concentrated in California and Oregon, but there are some locations in Florida. Lowe's will also close the Tracy, California, distribution center that served the stores.
Lowe's said it made the decision to close the stores due to a "strategic reassessment" and a drive to "focus on [Lowe's] core home improvement business." Orchard Supply Hardware had $600 million in sales last year, contributing a small portion of the $68.6 billion in total sales that Lowe's posted.
Lowe's also announced lowered financial expectations for the rest of the year, cutting expectations for both profits and sales.
"Exiting Orchard Supply Hardware and rationalizing inventory are the driving force behind the changes to Lowe's business outlook," Lowe's CEO Marvin Ellison said in a statement.
Ellison became CEO in July. Lowe's recently announced it had hired a new CFO, David Denton, formerly of CVS.
Employees were told of the shutdown on Tuesday. Orchard Supply Hardware stores will start liquidation sales on Thursday, and all stores are expected to be closed by the end of the year, Lowe's said.
The store closures eliminate positions for around 4,300 workers, CNN Money reported.
"We are working hard to make this transition as smooth as possible for our associates and our customers," Lowe's spokesperson Jackie Pardini Hartzell said.
She continued: "We will be retaining our associates through the store closure process and are encouraging them to apply for open roles at Lowe's stores, where they will receive priority status."
Store employees will receive placement assistance and severance pay.
Lowe's acquired Orchard Supply Hardware for $205 million in 2013, after it had been spun off by Sears in 2011 and filed for Chapter 11 bankruptcy protection.