Lowe’s to wipe out 200 jobs

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This article was published 18/02/2017 (3152 days ago), so information in it may no longer be current.

One of the largest and oldest continuously operating distribution centres in Winnipeg is shutting down for good later this year, ending a 50-year legacy in servicing small-town Western Canadian retailers.

The 500,000-square-foot TruServ Canada head office and distribution centre, which was built in 1967, is to close by the end of the year, putting about 200 people out of work.

Although the TruServ Canada signage has not been changed, for the past two years the operation has become the headquarters of Ace Canada, just one of several name changes the massive distribution centre experienced during the past few decades.

Lowe’s Canada is the current owner of the business. Lowe’s framed the rationale for closing the distribution centre by saying in a release that it is “investing resources to support and grow the entire independent retailer network and to further leverage the Ace dealer support program.”

Lowe’s Canada came to be the owner after it acquired Rona Inc. last year. Rona had acquired TruServ in 2010 ,and in 2011 changed the name of the independently owned retail stores that the distribution centre serviced from True Value to TRU Hardware.

Subsequently, Rona acquired the master licence for Ace Hardware in Canada in 2014 and, starting in 2015, TRU Hardware stores changed their names to Ace Hardware.

Valerie Gonzalo, a spokeswoman for Lowe’s Canada in Boucherville, Que., said the company has decided to consolidate its distribution operations in Calgary, Mississauga, Ont., and Boucherville.

“We want to make the Ace brand grow further,” she said. “We analyzed the market after Lowe’s bought Rona — the customer base, products, programs and facilities — and decided if we wanted to grow the Ace brand we had to make some significant investments to integrate the business into the newer Lowe’s Canada operations.”

The roots of the Winnipeg operation go back to the old Macleod-Stedman chain. That business — a combination of the Macleod’s hardware stores mostly in Western Canada, and Stedman convenience stores in Eastern Canada — went bankrupt in 1992. The U.S. chain, Cotter & Company, acquired it then and in 1999 changed its name to TruServ, which also created a brand of small town convenience stores called V & S.

Bill Morrison has run the operation for more than 10 years, first as the president of TruServ Canada and then as division vice-president after Rona bought the business.

“We have gone through extraordinary changes over the last number of years,” Morrison said. “With the advent of e-commerce and the tremendous proliferation of the big box retailers across the country, our customer base has shifted dramatically.”

For one thing, the majority of its stores are in Ontario and Quebec rather than Western Canada, as a result of a successful recruitment campaign for the new Ace Hardware opportunity in Canada.

But after the Rona acquisition, there was a period of uncertainty as to the future of the operation and the product mix was starting to change.

Today, the Winnipeg distribution centre fills orders for 71 Ace Hardware stores and 92 independent retailers who operate with a hardware focus. Those 163 stores will continue to be serviced by the company from its other distribution centres.

But there were also about 365 other independent retailers that TruServ/Ace acted as a wholesaler to, who will be forced to find an alternative source of product.

Many of them did not buy much volume from the distribution centre, and under Rona, and now Lowe’s, the non-hardware component of its business was becoming tougher to maintain.

For instance, the V & S retailers wasn’t buying hardware products and Lowe’s was not interested in supporting convenience stores.

“Lowe’s is not a general merchandise organization. It is a home improvement company, which is fair,” said one Winnipeg Ace employee. “They can’t support the independent retailer that just buys socks and underwear from us.”

The 500,000-sq.-ft. distribution centre handles about 40,000 different stock-keeping units. In the past, it has hosted semi-annual trade show markets that brought about 1,000 people in to Winnipeg for several days.

Dayna Spiring, the CEO of Economic Development Winnipeg, said, “I hate these kind of stories. My understanding is they need to be closer to their customer base. But now there is an opportunity for other companies to move into that space.”

Morrison said the company will do everything it can to help employees transition to other jobs.

“We have a tremendously dedicated group of employees,” he said. “It has been an exceptionally difficult decision because of the tremendous loyalty and productivity of our people here.”

martin.cash@freepress.mb.ca