Thursday, May 16, 2013

Which Rona in Winnipeg Will Close?

In this blog a while back I indicated that Sears Canada was struggling mightily. It still is. However, after an injection of cash from their sale of some of the large leases to Nordstrom's, they will continue the struggle to emerge as viable. It is not hard to see Sear looking enviously at the Hudson Bay Company flush with cash from ending Zellers achieve profitability.

Target is breathing down all their necks as open more and more stores. Sears has indicated they could close more stores but it isn't their first option. Rumours continue to swirl over their Polo Park location. The suspicion is this is the last chance for the company to make a go of it without a major contraction or sale to someone else. The large Polo Park location is looked upon hungrily by competitors.

The latest company in Canada to talk about shutting stores down is Rona. The decision to drop or sell the big box stores of the home improvement retailer was mulled over the last weeks. The story is that quite a few of the stores including some in Winnipeg are losing money or have thin margins.

The new head of Rona says the option of closing or selling the 28 big box stores outside Quebec is off the table as a whole (The company also has 28 big box formats in Quebec). That is not to say that some unprofitable stores might not be closed. Last year the company closed 5 locations.

Looking at Winnipeg, it is not easy to see what Rona might be closed of the three big boxes. There is the Sargent location at Polo Park (once a Revy), the Panet Road location in Transcona and the Kenaston location down the street from IKEA.

What complicates this whole thing is Lowe's Home Improvement continues to add locations across Canada. They are scheduled to begin construction of a massive store on the Seasons of Tuxedo site. If there is one store in Winnipeg that will face brutal competition, it might be the Kenaston location.

Lowe's actively pursued Rona last year but Quebec enterprise politics prevented a deal from happening. Unless something dramatic happens, it is possible Rona will have to re-visit the sale or closure of some assets.

Could it be Kenaston? Could it be all of the Rona big boxes?

1 comment:

Dean said...

I hope it's the Sargent location. Staff there are rude. Arrogant and rude! Avoid the installation department - very rude and overcharge tremendously!