PASO ROBLES — The Orchard Supply Hardware store in Paso Robles is one of 99 stores in the U.S. slated to be closed by Lowe’s.
Lowe’s announced the nationwide closing of OSH stores in California, Oregon and Florida by Feb. 1. The move impacts OSH stores in Pismo and Santa Maria as well. The Paso Robles OSH store is located at 2005 Theater Drive.
Orchard Supply Hardware, founded in 1931 in San Jose, was acquired by Lowe’s in 2013. Lowe’s is reportedly closing the stores to focus on its core home improvement business, the company said.
Orchard Supply Hardware stores were going to have closing sales beginning Thursday, Aug. 23, with a plan for all stores to be closed by the end of the company’s fiscal year.
Lowe’s will also close a distribution center in Tracy, the company said.
“While it was a necessary business decision to exit Orchard Supply Hardware, decisions that impact our people are never easy,” Lowe’s president and CEO Marvin Ellison said in a statement. “We will be providing outplacement services for impacted associates, and they will be given priority status if they choose to apply for other Lowe’s positions.”
Lowe’s took a $230 million non-cash pre-tax charge during the second quarter based on its “strategic reassessment” of Orchard Supply Hardware, the company said.
The Mooresville, North Carolina-based hardware chain is refocusing Ellison said, and will tighten its store inventory as Lowe’s foresees a demanding retail environment.
OSH stores are smaller — about one-third the size of a typical Lowe’s — and known for hands-on customer service.
The company lowered its full-year sales forecast to 4.5 percent, down from the previous forecast of 5 percent. Sales at stores open at least one year are expected to increase about 3 percent for the year, down from the previous forecast of 3.5 percent.
Lowe’s posted second-quarter sales of $20.9 billion, up 7 percent from the same period a year ago, surpassing expectations of $20.8 billion, based on analysts polled by S&P Global Market Intelligence.
However, net income fell 7 percent to $1.52 billion, or $1.86 per share, missing expectations of $1.65 billion and $2.01 per share.
Lowe’s shares (LOW) were up 8 percent to $108.43 in morning trading Wednesday.
Lowe’s acquired Orchard Supply Hardware in 2013 after Orchard Supply, which was spun off from Sears Holdings in 2011, filed for bankruptcy.
Lowe’s, with 2,155 home improvement and hardware stores in the U.S., Canada and Mexico, also named current CVS Health executive vice president and CFO David Denton as its CFO. Denton will join Lowe’s after CVS closes its acquisition of Aetna, expected later this year.
“I am confident that Dave will play a key role as we accelerate growth, profitability and return on capital at Lowe’s,” Ellison said.