Everything has an end.
For Orchard Supply Hardware, it’s coming soon — too soon for its loyal customers at its stores locally and nationally.
There are two stores in the Naples area: one in Granada Shoppes at U.S. 41 and Immokalee Road in North Naples and the other south of Pine Ridge Road at 3790 U.S. 41 N.
The local stores haven’t been around for long, but they have some fans, who weren’t happy to hear the announcement Wednesday that Lowe’s will close all Orchard Supply Hardware stores nationwide by Feb. 1.
“I’m sorry to see it close. It if wasn’t closing, I would be coming here all the time. Oh well,” said Debbie Nelson, as she shopped at the North Naples store Wednesday afternoon.
Nelson, who lives in Bonita Springs, came to the store for “odds and ends” she had trouble finding elsewhere, including a 1-gallon bucket with a lid for grout and a squeegee for her mop.
“It is something different,” she said. “It’s not crazy and it’s not like another big-box store.”
As she shopped in the early afternoon, the store looked virtually empty, with more employees in it than shoppers.
Lou Pfohl, who lives in North Naples, looked over garden hose fittings in an aisle all to himself. Although he had shopped at the store only a few times, he said he was was sorry to see it go too.
“I like the store for its selection and the informed salespeople,” he said.
Not only do the salespeople know what they’re talking about, Pfohl said, but they all speak English.
“When someone doesn’t speak English and they don’t know what you’re talking about, it can be frustrating,” he said.
Employees at the North Naples store remained cheerful and helpful, despite the news they soon would lose their jobs. Assistant Manager Ashton Gibson said information was trickling down from corporate offices, but a closing date for the store wasn’t known. She said she also wasn’t sure when a liquidation sale would start.
Clint Mobley, a manager for the store on U.S. 41 in Naples, said he didn’t know when his location would close either.
Between the two stores, he said, there are about 50 employees, and both locations have some loyal customers.
“They loved the concept of the store,” Mobley said of their customers.
News about the stores’ closing led many longtime customers to reminisce on Twitter about the chain, which remodeled some stores recently and had been expanding in Florida.
“Deeply saddened,” one person tweeted.
“I am going to miss them big time,” wrote another longtime customer.
Founded in 1931 in San José, Orchard Supply Hardware has 99 stores in California, Oregon and Florida. The chain touts its refreshing approach to the intimidating “big box” shopping, with unique offerings such as custom project work at its signature Workbench and lifetime plant guarantees.
Lowe’s said it’s closing the Orchard Supply stores to focus on its core home improvement business. The Mooresville, North Carolina-based hardware chain wants to refocus on “retail fundamentals,” said Lowe’s president and CEO Marvin Ellison in a statement, and will tighten its store inventory as Lowe’s foresees a demanding retail environment.
Liquidation sales are expected to begin as soon as Thursday, with a plan for all Orchard Supply stores to close by the end of the company’s 2018 fiscal year. Lowe’s will also close a distribution center in Tracy, California.
“While it was a necessary business decision to exit Orchard Supply Hardware, decisions that impact our people are never easy,” Ellison said. “We will be providing outplacement services for impacted associates, and they will be given priority status if they choose to apply for other Lowe’s positions.”
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In the second quarter Lowe’s said it took a $230 million non-cash pre-tax charge based on its “strategic reassessment” of Orchard Supply Hardware.
Lowe’s lowered its full-year sales forecast to 4.5 percent, down from the previous forecast of 5 percent. Sales at stores open at least one year are expected to increase about 3 percent for the year, down from the prior forecast of 3.5 percent.
Lowe’s posted second-quarter sales of $20.9 billion, up 7 percent from a year ago, surpassing expectations of $20.8 billion, based on analysts polled by S&P Global Market Intelligence.
However, net income fell 7 percent to $1.52 billion, or $1.86 per share, missing expectations of $1.65 billion and $2.01 per share.
Lowe’s acquired Orchard Supply Hardware in 2013 after Orchard Supply, which was spun off from Sears Holdings in 2011, filed for bankruptcy.
“Without seeing the financial data associated with the decision to shut down, it looks like a case of another regional chain unable to compete with the large national retailers. When given the choice between lower prices made possible by economies of scale and differentiation allowed by smaller retailers, consumers often reward the former,” said Christopher Westley, an economics professor and director of Florida Gulf Coast University’s Economic Research Institute.
As for the impact on Collier County’s and Southwest Florida’s economy, Westley said he’s not too concerned, even though the county has been losing retail jobs since Hurricane Irma..
“It’s never pleasant for workers to lose jobs and be forced to go on the job market. But retail is the third largest employment sector in Collier, employing over 21,000 on average last year, so the job losses are small in percentage terms. I’d expect that sector to be able to absorb Orchard’s workers without much trouble,” he said.
The first Florida store – and the first on the U.S. East Coast – launched Oct. 25, 2016 in Fort Lauderdale. Within a year the retailer’s footprint expanded to 11 stores in the Sunshine State.
The first store in the Naples area debuted on Feb. 28, 2017. The chain’s sixth store in the state, it replaced an old furniture store on U.S. 41, which was completely transformed inside and out.
The North Naples store opened on Sept. 15, 2017, filling the roughly 37,000 square feet that remained of the 92,443-square-feet left behind by the Expo Design Center after it closed in 2009.
Orchard Supply hasn’t built its own stores, preferring to repurpose old ones. Every store has its own look and style to reflect its location, although they all offer the same kinds of products and services with an old-fashioned general store feel.
How difficult it will be to fill the locations left behind by Orchard Supply in the Naples area remains to be seen.
Rod Castan, president of leasing and management services for Courtelis Co., the developer of Granada Shoppes, declined to comment, saying he needed more information from the tenant. The space the hardware store took over had been sitting vacant since the Great Recession.
Collier County property records show the other store location in Naples sold for $16.85 million in July 2017 for $16.85 million. It’s owned by KME Orchard Naples LLC, headed up by Ronald Kramer of Virginia Beach. Kramer couldn’t be reached for comment.
The property and an adjacent parcel previously sold for $7.28 million in July 2016. Based on a much higher sales price last year, Craig Timmins, a principal with Naples-based Investment Properties Corp., said the next tenant could be looking at “a pretty stiff rent number.”
“I think there will be demand,” he said. “Free-standing buildings like that are harder to come by.”
In other news Wednesdasy, Lowe’s, with 2,155 home improvement and hardware stores in the U.S., Canada and Mexico, also named current CVS Health executive vice president and CFO David Denton as its CFO. Denton will join Lowe’s after CVS closes its acquisition of Aetna, expected later this year.
“I am confident that Dave will play a key role as we accelerate growth, profitability and return on capital at Lowe’s,” Ellison said.
Mike Snider with the USA TODAY NETWORK contributed to this story. Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
