One city Rona store to close and nearby Lowe’s to re-brand

After Lowe’s failed experiment in operating both Lowe’s and Rona stores across the country, the new owner of the Canadian hardware chain is converting its 65 Lowe’s stores to Rona+ stores.

As part of that process, the company announced on Thursday, perhaps not surprisingly, that it will no longer operate two stores across the street from each other on Kenaston Boulevard.

To that end, the company has decided to close the Rona Home & Garden location on Kenaston Boulevard and keep the current Lowe’s location on Kenaston open and re-brand it to Rona+.

Store employees at the Rona location on Kenaston were told about the closure on Thursday and later in the day the company said a store-wide clearance sale would begin immediately.

In a statement, a company officials aid, “We conducted an in-depth analysis of our network in Manitoba and decided to reduce our store footprint where some locations were in close proximity to one another.”

There were previously two Lowe’s — on Kenaston and Kildonan Crossing, and two Rona’s — on Kenaston and Sargent Avenue.

A company official said in a statement that it was too early to tell if there will be job losses due to the store closure but said every effort would be made to relocate impacted employees at surrounding stores whenever possible.

In an interview, Catherine Laporte, Rona’s vice-president marketing, said, “We are always looking for great people, so as much as can, we will offer positions to the employees at the Rona Kenaston store at other locations.”

There are an average of about 125 employees for each of the chain’s big box locations, which are on average just over 100,000 square feet in size.

Last decade, Lowe’s Company Inc. wanted to get into the Canadian market and paid $3.2 billion to acquire Rona Inc., creating a network of 539 stores that generated about $6 billion in annual revenue.

But last November, the company decided that the experiment was not working and it decided to exit the Canadian market, selling to the U.S. private equity firm Sycamore Partners for $400 million and performance-based deferred considerations.

Today, the company has 425 corporate and affiliated dealer stores under the Lowe’s, RONA+, RONA, Réno-Dépôt, and Dick’s Lumber banners.

Kiran Pedada, an assistant professor of marketing at the Asper School of Business at the University of Manitoba, said the idea of operating two parallel brands of big box retailers was fraught with challenges.

“There are so many negative consequences in trying to do that,” he said. “Cannibalization is the biggest thing, and as well you can’t really build brand loyalty having two stores with the same parent like that. It is very difficult. Operating two chains of very large stores creates a lot of overhead. I don’t think it makes sense.”

And Pedada thinks the operation of two stores in such close proximity to each other is pretty much a non-starter.

“Customers will chose one store or another but they are confused about which one to go to,” he said. “It creates confusion in the minds of the customer trying to distinguish between the brands.”

Laporte said the company has encountered other stores in close proximity. She said there are some situations in Ontario that are being addressed. A store closure in Vaughan, Ont., has already been announced.

The two Winnipeg Lowe’s stores will finish their conversion to Rona+ in early November and conversion of the entire chain should be done by next spring.

Company officials say the new Rona+ stores will offer customers an enhanced shopping experience with a larger product offering.

The Lowe’s stores will remain open during the conversion, and guarantees offered by Lowe’s will be honoured, gift cards will still be accepted at RONA+ stores and other Lowe’s stores in Canada, and private brands will remain in the stores’ offering.

Andrew Iacobucci, CEO of Rona Inc., said in a statement, “The conversions of Lowe’s stores represent a significant investment and a renewed commitment to the Rona brand. Rona has been a household name for home improvement in Canada for close to 85 years now. It stands for great service, exciting product and brand assortments, good value, and a strong sense of community. We want to build on that and create momentum for this beloved Canadian-operated brand.”

martin.cash@freepress.mb.ca