In an effort to help the company make a bigger profit and compete on a smarter level with rival Home Depot, Lowe’s Companies, Inc. announced Wednesday, August 22, that it is going to close down all of its Orchard Supply Hardware stores. This move was made by the company’s new president and CEO, Marvin R. Ellison, who took his position in July.
According to USA Today, Lowe’s acquired the chain, which has been in operation since 1931, back in 2013. The company will shutter all 99 of the stores located in California, Oregon, and Florida, and a distribution center in Tracy, California, by the end of the fiscal year, which is September 30.
Oddly, the Orlando Sentinel reported that OSH was in the middle of expanding in the Central Florida region, and a new store was under construction at the Orlando Fashion Square mall.
Even though the company made an official decision on August 17, the 4,300 Orchard Supply Hardware employees were given the shocking news just one day before it was released to the public.
“While it was a necessary business decision to exit Orchard Supply Hardware, decisions that impact our people are never easy,” said Ellison in an official press release on Lowe’s website. “We will be providing outplacement services for impacted associates, and they will be given priority status if they choose to apply for other Lowe’s positions.”
The Mooresville, North Carolina-based company will now focus on its core business, Lowe’s stores, which sells home improvement items, hardware, and appliances. Part of the plan is to eliminate inventory that is not moving quickly in its 2,155 stores across the United States, Canada, and Mexico.
“Exiting Orchard Supply Hardware and rationalizing inventory are the driving force behind the changes to Lowe’s business outlook,” stated Ellison. “We are developing plans to aggressively rationalize store inventory, reducing lower-performing inventory while investing in increased depth of high velocity items.”
Ellison and his staff will continue their “strategic reassessment,” evaluating their “real estate portfolio and non-retail business investments.” An update will be issued by Lowe’s in December.
“We are committed to driving even stronger performance in the future by sharpening our focus on retail fundamentals and by limiting any projects and initiatives that take us away from our core mission of being a great omni-channel home improvement retailer.”
On Thursday, August 23, Orchard Supply Hardware will begin its closing sales.
“Orchard Supply is wonderful,” 70-year-old shopper Pam Davis told the Orlando Sentinel, adding that she was “heartbroken” that the retail chain will be closing down. “Whenever you walk in the door they greet you, and even give you an apple when you leave.”