By Clarrie Feinstein
Lowe’s Canada must forge new path after being sold
The outlook for Lowe’s Canada is uncertain after Lowe’s Companies, Inc. sold its Canadian retail business on Nov. 3. New York-based private equity firm Sycamore Partners bought the Canadian business for $400 million (U.S.). That means Lowe’s Canada will become private and no longer be part of Lowe’s Companies publicly traded stocks.
Lowe’s Canadian arm is based in Boucherville, Quebec, and operates or services around 450 corporate and independent affiliate dealer stores under a number of banners, including Lowe’s, Rona, Réno-Dépôt and Dick’s Lumber.
Lowe’s chairman, president and CEO Marvin R. Ellison said the sale is an important step to simplify Lowe’s business model.
The deal, expected to close in early 2023, will establish Lowe’s Canada and Rona as a stand-alone, Quebec-headquartered company.
Lowe’s bought Rona Inc. in 2016 in a deal valued at $3.2 billion (CND.). At the time the company said the acquisition was a key step in accelerating its growth strategy.
“Lowe’s came into Canada in 2007 and struggled to gain solid footing,” said Bruce Winder, retail analyst and author. “Rona and Réno-Dépôt have always been the weaker of home improvement retailers in profitability and sales.”
The biggest challenge for Lowe’s Canada will be merging with Rona, as its difficult to merge brands successfully, especially when its two household names, said Lisa Hutcheson, managing partner at retail consultancy J.C. Williams Group.
Source: Toronto Star