Lowe’s Canada Under New Leadership

Mooresville, N.C. —based Lowe’s surprise announcement that it was replacing Doug Robinson, the president of its new Canadian division, has perplexed many industry observers watching the retailer’s northern progression. Robinson is leaving just as Lowe’s prepares to launch its first stores in Canada, an event whose exact date remains a mystery. But the retailer said it is still on schedule to open five to six units in the Greater Toronto Area before Jan. 31, 2008, the end of its fiscal year. And it has a new executive uniquely prepared to do the job.

Don Stallings, a 13-year Lowe’s veteran, has served as a district manager, merchandising vp, and most recently, regional vp-operations in the Houston market. While working in the south central division, Stallings once opened six stores in Dallas in a single day. He may be called upon to repeat that performance in Toronto.

Lowe’s has already built stores in South Brampton and Hamilton, which are reportedly merchandised and ready to open. The company has also broken ground on a unit in Brantford and identified a fourth location within the Toronto metro area. Lowe’s is mum on the location of numbers five and six, and the end of its fiscal year is only five months away. Nor will the company say if it plans to open the stores all at once. “I can’t get into any of the details,” said spokeswoman Chris Ahearn.

Company officials have said that their real estate committee has approved nine other Canadian sites. Last June, at the Hardlines Conference in Toronto, Robinson said Lowe’s wanted to open as many as 100 stores in Canada. He dismissed suggestions that the retailer was having trouble finding suitable real estate sites.

Much speculation has swirled around a possible Lowe’s takeover of RONA, Canada’s largest chain of independent hardware stores. This rumor was fed, in part, by a recent report by Desjardins Securities that put the probability at 40 percent, given Lowe’s need for physical locations. In an interview with HCN, Desjardins analyst Keith Howlett, the author of the report, said Lowe’s impediments in launching its Canadian stores go beyond real estate.

“I think they can find the sites even though they’ve been picked over by Home Depot and RONA,” Howlett said. Labor, a perennial problem in Canada, could be slowing down store construction and staffing, he observed. “It’s not easy to get tradesmen in Toronto,” he added.

Although Robinson’s departure could be viewed as a setback for Lowe’s—the former Beaver Lumber executive was familiar with the Canadian market—Howlett sees Stallings as a positive move. “By putting in a long-time Lowe’s guy, they’re sending a signal,” he said. “They’re saying, ‘We’re really coming. There’s no retreat here.’”