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Is Lowe’s Going Out of Business?

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Lowe's Store

Lowe’s is one of the largest home improvement retailers in the United States, operating nearly 2,000 stores across North America. Founded in 1946 and headquartered in North Carolina, Lowe’s offers a wide selection of construction, maintenance, repair, remodeling, and decorating products.

Major product categories include appliances, tools, paint, flooring, lighting, lawn and garden, and building supplies. Lowe’s competes directly against Home Depot in the home improvement space.

Rumors of Lowe’s closings

Despite its leading position in the industry, Lowe’s has recently faced rumors and speculation that it plans to close many stores in 2023. Reports have suggested Lowe’s could shutter over 200 locations in the coming year. This would represent a massive reduction in the company’s physical footprint, equal to about 10% of Lowe’s stores.

Lowe's Stock Price 22, Nov 2023
Lowe’s Stock Price 22, Nov 2023

Factors contributing to closures

If Lowe’s does move forward with extensive closures in 2023, several key factors would likely contribute to this decision:

Retail apocalypse

The so-called “retail apocalypse” has led many chains, including Sears, JC Penney, and Payless, to close hundreds or thousands of locations over the past decade. E-commerce and shifting consumer preferences continue to disrupt traditional brick-and-mortar retail. Lowe’s may right-size its physical presence in response to these industry changes.

Pandemic impact

The COVID-19 pandemic accelerated certain retail trends, such as online shopping. Temporary store closures and reduced customer traffic during lockdowns also hurt sales. Lowe’s may look to close underperforming locations that struggled during the pandemic.

Supply chain issues

Global supply chain disruptions have made sourcing and stocking shelves more difficult and costly. Closing weaker stores could allow Lowe’s to focus inventory and supply chain efforts on top-tier outlets.

Inflation and recession fears

Rising inflation and concerns about an economic downturn have made consumers more cautious with spending. Lowe’s same-store sales gains have slowed a bit in 2022. Closing poorer-performing stores could boost overall sales productivity.

Analysis of Store Closings

While the rumors of 200+ Lowe’s closures are significant, the actual scope of closings remains uncertain.

Actual closures announced

Thus far, Lowe’s has confirmed only the closure of 5 stores across Canada. The company has not announced any widespread U.S. closures.

Closures relative to other retailers

Lowe’s total store count would only drop about 10% with 200 closures. Many other retailers have closed 20%, 30%, or more of locations in recent years.

Geographic distribution of closures

It is unclear whether potential Lowe’s closures would be concentrated in certain markets. The confirmed Canadian closures represent only a small fraction of Lowe’s 370+ Canadian locations.

Lowe's vs The Home Depot Revenue Share
Source: The Home Depot

Lowes’ response to closure rumors

Lowes has provided few direct comments on the rumors of mass U.S. store closures. However, the company has indicated its general approach is to continue providing a robust brick-and-mortar presence.

In 2021, CEO Marvin Ellison said Lowe’s is “not trying to win the store closing race,” implying the company sees value in maintaining physical stores.

You may also want to know if Aldi is Closing too.

Outlook for Lowes in 2023

While some store closures are likely in 2023, a slash-and-burn approach seems unlikely, given Lowe’s public stance and continued store openings.

Strategies to remain competitive

To compete with e-commerce and other challenges, Lowe’s is pursuing strategies like improving in-store experiences, developing omnichannel capabilities, and leveraging stores for fulfillment.

Expansion plans

Lowe’s planned to open 50 new stores in 2022 across the U.S. and Canada. This demonstrates continued investment in physical retail.

Omnichannel growth

Lowe’s is expanding services like buying online pickup in-store. Leveraging physical stores as part of an interconnected omnichannel experience can drive growth.

Lowe's Black Friday Deals 2023
Lowe’s Black Friday Deals 2023

Key Takeaways on Potential Lowe’s Closings

  • While Lowe’s closing 200+ stores is possible, the company has not confirmed widespread closures beyond a small number in Canada.
  • Industry headwinds like e-commerce and the pandemic have led to closures across retail, but Lowe’s public stance suggests maintaining a robust store network.
  • Lowe’s growth plans point more to omnichannel retail rather than abandoning physical stores. Some closings of underperforming locations may occur, but likely not at a massive scale.
  • Lowe’s is actively countering retail apocalypse fears with strategies to enhance in-store experiences and integrate stores with digital channels.

In summary, rumors of Lowe’s closing many stores are currently unsubstantiated. While some closings are expected, Lowe’s seems committed to keeping a strong brick-and-mortar presence rather than shrinking its retail footprint dramatically.

FAQ

Q: How many Lowe’s store closings have been confirmed for 2023?

A: As of now, Lowe’s has only confirmed 5 store closures, all in Canada. No widespread U.S. closures have been announced.

Q: Is Lowe’s going out of business or bankrupt?

A: No, Lowe’s remains a financially healthy company. The closure rumors do not signal Lowe’s is going bankrupt or closing down altogether.

Q: Are Lowe’s closures due to the retail apocalypse and shift to online shopping?

A: The retail apocalypse is likely a factor, but Lowe’s seems to be countering that by enhancing physical stores and integrating them with digital capabilities.

Q: Will Lowe’s closures be concentrated in certain markets or geographic areas?

A: So far, closures are limited to Canada. If more closures occur, weaker-performing markets could be targeted, but significant closures across all markets seem unlikely.

Q: What is Lowe’s doing to drive growth and stay competitive amid retail industry challenges?

A: Lowe’s is focused on omnichannel retail, improving in-store experiences, leveraging stores for digital fulfillment, and continuing to open new locations. This suggests maintaining a strong physical presence remains part of their strategy.

Read more about business closures and other business-related insights in our business section.

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