Lowe’s new CEO shuts down entire Orchard Supply Hardware chain

At 99 Orchard Supply Hardware (OSH) stores across Calif., Ore. and Fla., signs announcing “hiring happy people” have been abruptly replaced with “CLOSING” notices. The San Jose-based home improvement store chain began the process of closing down after over 85 years of operation on Aug. 27.

When Orchard Supply filed for bankruptcy in 2013 after a series of merges, Lowe’s purchased the company for $205 million the same year in an attempt to match Home Depot’s dominance in the Calif. home improvement market. An article from Nasdaq states that in at the time of the purchase, “Lowe’s ha[d] only 110 stores [in California to] Home Depot[’s] 233.”

However, OSH did not become what Lowe’s envisioned. Lowe’s newest CEO, Marvin Ellison, stated OSH detracted from Lowe’s breadth of inventory and targeted a niche too small to be profitable. In 2017, OSH was operating at a $65 million annual deficit before taxes and interest on their debt according to Marshall Croom, Lowe’s chief financial officer. With OSH’s closing, Ellison hopes to streamline all of Lowe’s efforts into expanding the core business and incorporating OSH’s wares into Lowe’s inventory.

“I did not go there a lot, but there are some items you can buy at Orchard Supply that you find to get at Home Depot or Ace [Hardware], like the silicone sealant,” Gary Clarke, Math Department, said.

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The Business Journals describes OSH as having “deep selections of product in repair and maintenance” which stand out from competitors like Home Depot. While OSH products may reappear in Lowe’s stores, there is a sizable part of OSH which may remain missing.

“Right when you go into OSH, you are immediately greeted at the door and are asked what you need, unlike other stores. The store’s great customer service is something I need because I am definitely not home savvy at all. Now, there is really no choice except to go to those bigger chain stores without that customer service,” Karen Hartmann, Science Department, said.

With over 1,500 employees working for OSH in Calif., job loss became an issue Lowe’s made an effort to resolve. To compensate laid-off workers, Lowe’s promised to provide job placement services for OSH employees, priority to OSH workers applying to Lowe’s and a severance package for employees off of probation.

OSH employees and consumers are not the only ones who will be affected by OSH’s closing. The chain was known for supporting community endeavors like San Jose’s Christmas in the Park, a celebration held every Christmas in downtown San Jose. OSH was a notable sponsor of the celebration; they donated $25,000 annually and offered discounts on the many Christmas trees shown in the celebration’s displays. With OSH’s closing, that tradition may be gone for good.

Orchard Supply’s website describes their mission as “to be America’s neighborhood hardware and garden store.” With liquidations already underway, there will be the loss of one of the last independent hardware stores, and what could be described as a landmark Bay Area tradition.

All stores began the liquidation of real estate and product at a maximum premium of 50 percent. Lowe’s slated OSH’s closing to end by February 2019.