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Lowe’s Will Shutter All 99 Orchard Supply Hardware Locations

Lowe’s will close the Orchard Supply Hardware chain, which operates in California, Oregon and Florida, by the end of fiscal 2018. The retailer will shutter all 99 stores and the distribution facility that services them.

The hardware chain’s closure is part of an overall restructuring by Lowe’s, which is seeking to “focus on retail fundamentals and by limiting any projects and initiatives that take us away from our core mission of being a great omnichannel home improvement retailer,” according to Marvin R. Ellison, President and CEO of Lowe’s.

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“In addition to the decision to exit Orchard Supply Hardware, we are developing plans to aggressively rationalize store inventory, reducing lower-performing inventory while investing in increased depth of high velocity items,” said Ellison in a statement. “Exiting Orchard Supply Hardware and rationalizing inventory are the driving force behind the changes to Lowe’s Business Outlook.”

Lowe’s initially acquired 60 Orchard Supply stores for $205 million during bankruptcy proceedings five years, according to RetailWire. Ellison claimed the deal was a mistake during a Q2 2018 earnings call, and said he believes closing the chain is the right choice.

“Acquiring Orchard Supply was not the mistake; the mistake was to acquire it and then do very little with it,” said Neil Saunders, Managing Director at GlobalData in a discussion on RetailWire. “Lowe’s could have developed it into a hardware-type offering serving more local and urban markets, similar to Ace. It didn’t, it just left the chain to fester. As such, shuttering it is a good move. Lowe’s can now focus its attention and resources on its own smaller formats and other initiatives.”

Lowe’s otherwise reported a solid performance for Q2 2018, with sales rising 7.1% to $20.9 billion over Q2 2017, and comparable store sales up 5.2%. Comparable sales for the retailer’s U.S. home improvement business increased 5.3% during the period.

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