Lowe’s sells entire Canadian retail network

November 11, 2022




Lowe's Companies, Inc. is selling off its entire Canadian retail network to New York-based Sycamore Partners, a private equity firm, for US$400 million cash plus a performance-based deferred consideration.
The Canadian arm of Lowe’s is based in Boucherville, Quebec.
The November 4 announcement said the sale involves 450 corporate and independent affiliate dealer stores under different banners, which include, Lowe's, RONA, Réno-Dépôt and Dick's Lumber.
The transaction is expected to close early in 2023, subject to customary closing conditions and regulatory approvals.
"The sale of our Canadian retail business is an important step toward simplifying the Lowe's business model.  While this business represents approximately 7 per cent of our full year 2022 sales outlook, it also represents approximately 60 basis points of dilution on our full year 2022 operating margin outlook," said Marvin R. Ellison, Lowe's chairman, president and CEO in a statement.
Ellison said the company will now concentrate on taking a larger share of the U.S. market, which he noted posted “improved  sales trends and strong profit flow-through in the third quarter, as well as our expectations for solid business performance for the remainder of 2022.”
Lowe’s has been selling outlets since 2019, has struggled in Canada since it took over Rona in a $3.2-billion transaction in 2016.
As it prepared the company's financial statements for the third quarter of 2022, Lowe’s Companies expects to record a loss of approximately $2 billion related to its Canadian retail business.