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Lowe's to get rid of Mexico stores

Lowe's said on Tuesday it was looking to shed its retail operations in Mexico and two of its smaller US businesses as the country's second-biggest home improvement chain strives to compete with rivals including Home Depot.

Shares of the Mooresville, North Carolina-based company fell nearly 3.6 per cent in morning trading after Lowe's blamed inventory missteps for a smaller-than-expected rise in comparable store sales. Larger rival Home Depot shares were also down nearly 2 per cent.

Under Marvin Ellison, Lowe's newly-appointed chief executive officer, the company has been streamlining its business by shutting underperforming stores and cutting back on slow moving inventory.

The company has perennially lagged Home Depot in same-store sales, despite having roughly the same number of stores.

Lowe's said it was looking at all options for its chain of 13 stores in Mexico and that it was 'exiting' its US contracting services business Alacrity Renovation Services and security and smart home app Iris Smart Home.

Earlier this month, the company announced the closure of 51 underperforming stores in the United States and Canada, which followed the shutdown of 99 Orchard Supply stores in California.

"We believe Lowe's is moving in the right direction, but this quarter's results show that change is not linear or quick in large retail organisations," Wedbush Securities analyst Seth Basham said.




|23 November 2018

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