Lowe’s, the popular home improvement store, has announced store closures and a slowdown on projected store openings for the next year. The move is considered necessary to get financial statements in line with expectations and improve profitability.
Lowe’s operates approximately 1,700 stores across the United States in cities large and small and has a workforce of about 161,000 full time and 73,000 part time employees. The plan is to close twenty stores, resulting in the loss of about 2,000 jobs. The doors have been permanently locked at ten stores so far with another ten slated for closure within the next month.
Along with the store closures, Lowe’s has announced a reduction in planned store openings. The original plan called for thirty new stores in 2012, but this target has been cut in half. Lowe’s will concentrate on improved efficiencies in existing stores while expanding only to those locations where projected sales and profitability are greatest.
Home improvement sales have been slumping for a few years and the reasons should be obvious. With an uncertain economy, high unemployment, and deep financial concerns, homeowners are delaying home improvement projects. Other than taking care of basic needs, most home owners are postponing home improvements and maintenance, including simpler projects, while they wait for signs of a healthier economy.
Competitors such as Home Depot have felt the sales crunch as well, but unlike Lowe’s, Home Depot management moved quickly to cut costs and is now ahead in the game. Home Depot’s store by store sales have exceeded those of Lowe’s for more than two years.
Wall Street has reacted positively to Lowe’s cost- cutting measures, pushing the stock price up about 40 cents per share (approx.. 2%) in mid day trading.
Want to read more financial articles and find money saving tips? Visit Money Saving Parent today!
I hope you enjoyed this post! Click the “subscribe to get instant updates” link above to receive automatic updates whenever a new post is made.
Comments