The Los Angeles Post

Lowe’s is closing all 99 locations of a California-based hardware-store chain

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  • Orchard Suppy Hardware 1933
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    The garden section of the Orchard Supply Hardware store in San Rafael offered a selection of merchandise when it was bought by Sears in 1996.

    Photo: Frederic Larson / The Chronicle 1996

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    In an August 1985 ad in the combined Sunday edition of the San Francisco Examiner and Chronicle, Orchard Supply Hardware sought to hire employees for new stores.

    Photo: Sunday Examiner-Chronicle 1985

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    Shoppers at the San Rafael Orchard Supply Hardware in 1996. Sears spun out a partial interest in Orchard in 2005. Orchard went bankrupt in 2013.

    Photo: Frederic Larson / The Chronicle 1996

In the end, Orchard Supply Hardware’s size was fatal.

With 99 stores, the 87-year-old home improvement chain was too small to move the financial needle for parent company Lowe’s, the second-largest hardware retailer in the world. All of the stores, including around 40 in the Bay Area, will close by the end of the year.

Lowe’s opened dozens of new Orchard stores after acquiring it out of bankruptcy in 2013. In 2014, Orchard leased its first San Francisco store at 2598 Taylor St. near Fisherman’s Wharf, as it sought to grow in urban centers. It later expanded beyond its West Coast roots to Florida.

But the investments didn’t pay off. Last year, Orchard lost $65 million before interest and taxes, Lowe’s CFO Marshall Croom said on a Wednesday earnings call. Orchard had $600 million in sales in 2017, accounting for only 0.8 percent of Lowe’s overall sales of $68.6 billion. Orchard shops tend to be around 35,000 square feet, about a quarter to a third of the size of Lowe’s big box stores.

Lowe’s CEO Marvin Ellison said on the earnings call that the $205 million acquisition of Orchard in 2013 and subsequent expansion “may not have been the most prudent use of capital.”