Retail Watchers

I just read that Lowe's was planning to open what they called an "appliance-centric" store in a former Orchard Supply Hardware/OSH store. The OSH store is much smaller than a traditional Lowe's (it was formerly an Office Depot.) The story said they'd also be selling a smaller selection of traditional home improvement items. Is this a new concept for Lowe's? It's the first time I've heard about such a format.

Are they only re-opening one OSH with this format, or multiple OSH locations?

Interesting strategy... bankrupt OSH, close OSH, lay off OSH employees, then re-open the stores with a format that does a number of the same things as OSH did... wonder if it will offer "Craftsman" tools too.

Lowe's is fearful of Outdoor Supply Hardware opening up new stores in former OSH buildings and is pushing back. I still believe Outdoor Supply is planning new stores.

Alpha8472 wrote: ↑September 19th, 2019, 11:46 am Lowe's is fearful of Outdoor Supply Hardware opening up new stores in former OSH buildings and is pushing back. I still believe Outdoor Supply is planning new stores.

Ace corporate (Westlake Ace Hardware) has also reopened a number of OSH locations.

I am not sure what Lowes thought- did they think the customers would start to drive 15 minutes to the nearest full size Lowe's, spend 10 minutes parking, and spend 20 minutes finding what they need? Customers who have had a convenient neighborhood hardware store, for OSH, for the past 30 years that they are comfortable with? Of course other retailers would fill this void. It is not that hard to duplicate the OSH Store Format. OSH Stores had foot traffic and functioned well as fill in hardware stores with high prices for people doing small home DIY tasks or buying plants.

I think Lowe's really miscalculated this one.

storewanderer wrote: ↑September 20th, 2019, 8:03 pm

Alpha8472 wrote: ↑September 19th, 2019, 11:46 am Lowe's is fearful of Outdoor Supply Hardware opening up new stores in former OSH buildings and is pushing back. I still believe Outdoor Supply is planning new stores.

Ace corporate (Westlake Ace Hardware) has also reopened a number of OSH locations.

I am not sure what Lowes thought- did they think the customers would start to drive 15 minutes to the nearest full size Lowe's, spend 10 minutes parking, and spend 20 minutes finding what they need? Customers who have had a convenient neighborhood hardware store, for OSH, for the past 30 years that they are comfortable with? Of course other retailers would fill this void. It is not that hard to duplicate the OSH Store Format. OSH Stores had foot traffic and functioned well as fill in hardware stores with high prices for people doing small home DIY tasks or buying plants.

I think Lowe's really miscalculated this one.

I'm not so sure I agree with your conclusion. OSH was losing money. Eddie Lambert bled cash out of them but they were breakeven at best thus the original BK filing. Lowe's bought them, infused cash in them and the stores till lost money. OSH as a chain was a failure with too high prices. The places where Lowe's screwed up was not to renamed them as Lowe's Hardware and match prices of the larger store. But with Lowe's not willing to do that, they had no choice but to shut the chain down if there was no shot of turning them around.

Sure, some OSH locations were successful and those locations will attract a new operator but overall the chain was a money pit. Lowe's just had a great quarter. They are righting the ship and they made the right move by getting rid of this distraction and focusing on fixing the core business.

Sounds similar to the Sears Hometown and Home and Life stores.

babs wrote: ↑September 20th, 2019, 10:54 pm

storewanderer wrote: ↑September 20th, 2019, 8:03 pm

Alpha8472 wrote: ↑September 19th, 2019, 11:46 am Lowe's is fearful of Outdoor Supply Hardware opening up new stores in former OSH buildings and is pushing back. I still believe Outdoor Supply is planning new stores.

Ace corporate (Westlake Ace Hardware) has also reopened a number of OSH locations.

I am not sure what Lowes thought- did they think the customers would start to drive 15 minutes to the nearest full size Lowe's, spend 10 minutes parking, and spend 20 minutes finding what they need? Customers who have had a convenient neighborhood hardware store, for OSH, for the past 30 years that they are comfortable with? Of course other retailers would fill this void. It is not that hard to duplicate the OSH Store Format. OSH Stores had foot traffic and functioned well as fill in hardware stores with high prices for people doing small home DIY tasks or buying plants.

I think Lowe's really miscalculated this one.

I'm not so sure I agree with your conclusion. OSH was losing money. Eddie Lambert bled cash out of them but they were breakeven at best thus the original BK filing. Lowe's bought them, infused cash in them and the stores till lost money. OSH as a chain was a failure with too high prices. The places where Lowe's screwed up was not to renamed them as Lowe's Hardware and match prices of the larger store. But with Lowe's not willing to do that, they had no choice but to shut the chain down if there was no shot of turning them around.

Sure, some OSH locations were successful and those locations will attract a new operator but overall the chain was a money pit. Lowe's just had a great quarter. They are righting the ship and they made the right move by getting rid of this distraction and focusing on fixing the core business.

I understand your assessment of OSH based on OSH in Oregon where OSH was unsuccessful and never should have been doing business in the first place. Lowe's made some very bad decisions at OSH that caused its financials to become so bad that they had to bankrupt it (again). Namely, they opened too many new stores in new territories. Lowe's opened how many new OSH Stores in the 2 years or so before closing it? It was a large number. OSH was not successful in new territories it entered. I'm not sure what other cash Lowe's infused into OSH beyond opening new stores, mostly outside California, because the stores I saw in California looked like 1992 inside at best. I think some of the new stores they opened in California were also in, how do I put it, too "high of rent" locations for OSH, causing further problems. OSH was successful with its core older stores in California where it was established. California is a unique market and OSH was a niche player in the market with a long-term reputation among customers. California's warmer climate also lends to a much longer selling season for garden/nursery department items than most other climates, which was a significant portion of these store's sales. The rebranding effort/new logo was another waste (I forget if that was before Lowe's...).

Lowe's finally had a good quarter after Home Depot has been having good quarter after good quarter for the past few years. We will see what happens long term.

babs wrote: ↑September 20th, 2019, 10:54 pm
I'm not so sure I agree with your conclusion. OSH was losing money. Eddie Lambert bled cash out of them but they were breakeven at best thus the original BK filing. Lowe's bought them, infused cash in them and the stores till lost money. OSH as a chain was a failure with too high prices. The places where Lowe's screwed up was not to renamed them as Lowe's Hardware and match prices of the larger store. But with Lowe's not willing to do that, they had no choice but to shut the chain down if there was no shot of turning them around.

Sure, some OSH locations were successful and those locations will attract a new operator but overall the chain was a money pit. Lowe's just had a great quarter. They are righting the ship and they made the right move by getting rid of this distraction and focusing on fixing the core business.

Correct me if I am wrong, but is this the Eddie Lampert behind Sears or someone else? If so, how did he get involved with Lowe's and Orchard Supply?

BatteryMill wrote: ↑September 21st, 2019, 9:39 am

babs wrote: ↑September 20th, 2019, 10:54 pm
I'm not so sure I agree with your conclusion. OSH was losing money. Eddie Lambert bled cash out of them but they were breakeven at best thus the original BK filing. Lowe's bought them, infused cash in them and the stores till lost money. OSH as a chain was a failure with too high prices. The places where Lowe's screwed up was not to renamed them as Lowe's Hardware and match prices of the larger store. But with Lowe's not willing to do that, they had no choice but to shut the chain down if there was no shot of turning them around.

Sure, some OSH locations were successful and those locations will attract a new operator but overall the chain was a money pit. Lowe's just had a great quarter. They are righting the ship and they made the right move by getting rid of this distraction and focusing on fixing the core business.

Correct me if I am wrong, but is this the Eddie Lampert behind Sears or someone else? If so, how did he get involved with Lowe's and Orchard Supply?

After OSH separated from Sears (Sears owned OSH), they had to continue to pay residuals to Eddie Lambert as part of the separation agreement. Those payments were to much for OSH forcing them into bankruptcy. Lowe's purchased them out of bankruptcy, mostly because they wanted a larger presence in California and wanted a small store strategy.

babs wrote: ↑September 21st, 2019, 9:51 am After OSH separated from Sears (Sears owned OSH), they had to continue to pay residuals to Eddie Lambert as part of the separation agreement. Those payments were to much for OSH forcing them into bankruptcy. Lowe's purchased them out of bankruptcy, mostly because they wanted a larger presence in California and wanted a small store strategy.

Thank you - got it. At least Sears didn't directly result in Lowe's clearing their house on this brand.