Lowe’s Greatly Improves its Canada Position with Purchase of RONA
Major shakeups are occurring in the retail homecenter industry north of the border. Lowe’s Companies Inc. has entered into a definitive agreement to acquire all of Canadian homecenter retailer Rona Inc. in a move that would pit the combined company against Home Depot. The new entity would become the leading home improvement retailer in Canada with estimated annual revenue of C$5.6 billion.
Currently, Lowe’s Canada operates close to 40 locations that compete with over 180 Home Depot locations and other local businesses. According to a company press release, Lowe’s Chairman, President, and CEO Robert A Niblock sees growth for the company within the estimated C$45 billion and growing Canadian home improvement industry. The company also immediately gains entry into Quebec, where Rona controls the market share and Lowe’s is nonexistent. Niblock also said that Rona’s headquarters will remain in Boucherville, and all of Rona’s multiple retail banners and distribution services to independent dealers will remain intact.
Rona’s current operation includes over 500 corporate and independent affiliate stores along with nine distribution centers. Fiscal 2014 sales exceeded C$4 billion, while 2015 third quarter year-to-date sales were up 2.8%.
Rona Inc. Sales History*
All years fiscal year end.
*Source: Chain Store Guide’s Database of Homecenter Operators & Hardware Chains