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  • In early November 2018, the international home improvement chain Lowe's announced that

  • it would be closing a significant number of its stores.

  • Now shoppers in the US and Canada will have to find somewhere else to pick up their tools

  • and construction supplies.

  • But why?

  • Here's the real reason why so many Lowe's stores are suddenly shutting down.

  • When retail chains announce store closings, they often haven't yet determined what stores

  • specifically will end up on the chopping block.

  • That's not how Lowe's went about things, though.

  • The company announced exactly which stores they planned on shuttering, adding up to a

  • total of 47 branches - 20 in the United States, and 27 in Canada.

  • The closing stores are spread across 13 states and five provinces, not concentrated in any

  • one region.

  • According to a company statement, the stores are being shut down for underperforming financially.

  • Marvin Ellison, Lowe's CEO and president, said in the statement,

  • "The store closures are a necessary step in our strategic reassessment as we focus on

  • building a stronger business."

  • So why are these stores underperforming?

  • Are they getting run out of business by the competition?

  • Not exactly.

  • According to the company, most of the closing stores are located within 10 miles of another

  • Lowe's location.

  • In other words, the company considers the stores on the chopping block to be redundant.

  • According to CNBC, the company is aiming to have all the stores shut down by February

  • 2019.

  • The company says most of the workers at the closing stores should be able to transition

  • to similar positions at other locations, but even if that works for 100% of the affected

  • employees, it's still a stressful time to be working at one of the stores getting shuttered.

  • Especially so close to the holidays.

  • When it comes to big-box hardware and home improvement stores, The Home Depot and Lowe's

  • are the only names in the game.

  • But there can be only one market leader, and for now, that's the Home Depot.

  • According to CNBC, Home Depot not only does better business than Lowe's, it also controls

  • better retail real estate, and has a more robust e-commerce fulfillment sector.

  • At the time of Lowe's announcement, Home Depot had more than twice the market value of its

  • main competitor, coming in at $207 billion compared to Lowe's $79 billion.

  • It seems to mean that even if the store-closing measure pays off, the company still has a

  • long way to go to close the gap between itself and its corporate rival.

  • Anticipating the 2018 holiday season, Lowe's won't close most of the 47 stores currently

  • marked for death until after the turn of the new year.

  • They can't leave that Black Friday money on the table, after all.

  • Lowe's fiscal year ends on February 1, 2019, by which time the company projects that all

  • 47 stores marked for closure will be closed.

  • To that end, the corporate office has enlisted the help of Hilco Merchant Services, a retail

  • liquidation company that clears as much merchandise out of shuttering stores as quickly as possible.

  • If you're lucky and you keep an eye out, maybe you can pick up some sweet savings for yourself

  • as your local store's last days draw closer.

  • Cutting the costs associated with the 47 affected stores, the company believes, could theoretically

  • make Lowe's as a whole more profitable, and its stocks more valuable.

  • The company reportedly believes that the move will add 28 to 34 cents of value to each share

  • of stock, potentially boosting the company's overall worth by as much as $274.8 million.

  • Hey, it's a start.

  • More to come?

  • The accelerated closure of 47 Lowe's locations may sound drastic, and it's certainly an incredible

  • disruption to the hundreds of people who work at those stores - especially anyone who might

  • not be able to transfer to another store so easily.

  • But employees of the international chain shouldn't worry too much yet, as this initial run of

  • closures only covers a tiny percentage of Lowe's outlets overall.

  • In North America, the company operates about 2,100 stores, divided between 1,800 locations

  • in the United States and 300 more in Canada.

  • That means only 2 percent of Lowe's branches are shutting down, which is significant, but

  • not the end of the world.

  • Could more closures be coming in the future?

  • It's possible.

  • Either way, it makes a stressful winter for the workers - but consumers probably don't

  • have much to worry about.

  • If worse comes to worst, there's always Home Depot.

In early November 2018, the international home improvement chain Lowe's announced that

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The Real Reason Many Lowe's Stores Are Closing Down

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    林宜悉 posted on 2020/03/11
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