Why Lowe’s is ditching Canada, and selling its retail business there for $400 million

Lowe’s will no longer have international stores, as it has agreed to sell its 15-year-old Canadian business for $400 million.

The Mooresville-based home improvement retail giant has entered a definitive agreement to sell its Canadian retail business to private equity firm Sycamore Partners, based in New York City, according to a filing Lowe’s made with the SEC Thursday.

“The sale of our Canadian retail business is an important step toward simplifying the Lowe’s business model,” Lowe’s CEO and President Marvin Ellison said in a statement. Lowe’s plans to intensify its focus on taking more U.S. market share, he said.

The sale to Sycamore Partners, which also owns the Belk department store chain based in Charlotte, is expected to close early next year.

Ellison said Lowe’s is “confident in its short- and long-term outlook for the U.S. business,” seeing improved sales trends.

Based in Boucherville, Quebec, Lowe’s Canadian retail business operates about 450 corporate and independent affiliated stores under names such as RONA, Lowe’s Canada, Réno-Dépôt and Dick’s Lumber. It represents 7% of Lowe’s sales outlook this year, Ellison said.

Three years ago, Lowe’s closed 34 Canadian stores that were unprofitable in an attempt to allow other stores in that area to perform better, The Charlotte Observer previously reported.

Lowe’s opened its first stores in Canada in December 2007, according to the company’s website. Lowe’s has more than 31,000 employees in Canada, including its independent affiliate dealer RONA.

The 101-year-old Lowe’s opened an office Bangalore, India, in 2015. In March, Lowe’s opened a second office in India, for workforce technology and business service roles such as customer support. Since the pandemic, the number of employees there has grown 60% to over 3,600 people, according to Lowe’s.

About Lowe’s

Lowe’s reported second-quarter earnings Aug. 17 of nearly $3 billion, comparable to the same quarter last year. Total sales for the second quarter were $27.5 billion, compared to $27.6 billion the prior year.

Ellison said the company is seeing “strong profits” in its third quarter. Lowe’s third-quarter earnings report is later this month.

Last month, Lowe’s officially opened its $153 million South End tech hub center at 100 W. Worthington Ave. in South End. About 2,000 employees will work from the 23-story building, focusing on digital business growth.

As of July 29, Lowe’s operated 1,969 home improvement and hardware stores in the U.S. and Canada, and employed over 300,000 people.

This story was originally published November 4, 2022 at 5:32 AM with the headline "Why Lowe’s is ditching Canada, and selling its retail business there for $400 million."