Lowe’s Closes Stores; Not Menard!
Recently an article from a somewhat obscure source came across my desk. The headline referenced two store closings in a couple of
’s prominent burgs. The stores were both locations of the industry’s perennial number two power, Lowe’s. With the industry’s, as well as the nation’s, economy struggling as much as they have for the past five years, it should come as no surprise when anyone’s location fails, even that of a company run as well as Lowe’s. Chicago
While the focus of the initial article was on the two
area locations, the story grew as five other locations had been similarly closed nationwide. Eventually as additional pieces of the story came to light the story went virtually viral, at least by industry standards. Chicago
Within two days the story took on an additional and rather controversial life as word got out as to how the workers were informed of the store closings. It turns out that that at the end of business on a seemingly average Sunday, all of the store’s workers were gathered together and notified that the stores were immediately closing for good and so there was no need to return to work.
Reaction from prominent members of the affected communities and then from across the country was swift and sharp. Politicians, including a Senator from
where one of the closings took place, and local leaders led an indignant charge as the details caught fire in the media. Alaska
A story focusing on the
closings stated that Lowe’s had made it clear that all the terminated employees would continue to receive pay and benefits for sixty days. Later, as the story exploded through the nationwide closings, a company spokesperson indicated that benefits and pay would last for ninety days. Both reports indicated that these former employees are eligible to apply for open positions in other Lowe’s stores. Chicago
Lowe’s made it clear that the affected
stores had been targeted for closing because they routinely fell short of sales estimates since the facilities had opened. The company noted that these results had not shown improvement over time. When I hear about companies missing estimates I think of Wall Street. Chicago
Not long ago Lowe’s was a darling of Wall Street, especially as Home Depot lost sight of its founding roots and lurched out to become all things to all people during what is now known as the Nardelli era. During this time Lowe’s maintained its core mentality and expanded through carefully measured steps, on-point, even entering
Mexico and in its typical gradual and methodical manner. Canada
These Lowe’s closings announcements took me aback as I recall
before Lowe’s and Home Depot had the temerity to open in the territory. Menard was emerging as the industry force competing with a number of once strong denizens such as the now long gone Handy Andy. I remember visiting Menard locations in the 90s and discussing the then recent coming of the first Chicago Home Depots. Menard’s managers and associates were reluctant to discuss their new competitors until well after the Depot beachhead had been established and they had proper time to respond. Chicago
As I’ve discussed a number of times through the years, Menard is a company that is defined by its independence and a seemingly continuous need to grow. This perennial industry number three is of course private and founder John Menard has instilled the company with an air of supreme confidence. He has long been celebrated as a man who never worries about what critics, much less what Wall Streeters, say or think.
Menard doesn’t seem to give up on stores. Lately he has begun to move to nearby locations to take advantage of slightly better real estate opportunities while continuing to serve the community through newer and improved prototypes. The question for Lowe’s is, is the Menard model a superior one for tough times? Certainly based on recent events it would seem to be.
One of the just closed Lowe’s locations in upstate
had opened in February 2009. Preparing for its opening took years of planning. Negotiations led to zoning permits and the company won concessions which resulted in a reduced tax package which was guaranteed for the store’s first decade. The sudden closing of such a typically well planned location could only raise ire, to be sure locally and now nationally. New York
Arthur Rosenberg, Senior Editor
Arthur has worked at Chain Store Guide for 20 years. He received a B.A. degree from City College of New York and attained a master’s degree in electronic communications from Brooklyn College. Please contact him if you have questions or comments.