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Lowe’s has surrendered in the retail battle for Canada’s hardware soul. Much like the $2.1 billion beating that Target took in 2015. Lowe’s has sold its Canadian operations for $400 million to a Wall Street private equity group. Lowe’s entered the treacherous waters of Canadian retail in 2016 with the $2.4 billion purchase of Rona. (A large independent retailer of lumber, construction materials, and related hardware).
Why do American retailers fail here? Do executives get off the plane, see McDonald’s, Wendy’s, and Burger King, notice no language barrier, and start making incorrect cultural assumptions that drive their Canadian subsidiary to ruins?
The sad tale of corporate incompetence that once was Target Canada has made for several interesting books and business-school case studies. Mostly blaming the consultants (SAP) who created an inventory system that couldn’t function with bilingualism, metric, or dollar conversions. It was a train wreck of epic proportions, but management was undeterred to opening 133 large store locations with the unproven inventory system.
It’ll be interesting to see what went wrong with Lowe’s that caused them to throw in the towel after five years. (The outlook for the Canadian economy probably was a factor in forcing the timing on this as well)
The official reporting from the Financial Post.Published in