Updated Monday, 12:43 p.m.
Meriden's Lowe's Home Improvement Store -- the anchor to Lowe's Plaza at 1201 East Main Street – abruptly closed for good Sunday night.
The local store was one of seven the chain shuttered nationwide Sunday night because each consistently didn't hit sales goals, according to the company. The closings came the night before Lowe's announcement early Monday that its second quarter earnings fell $260 million short of analyst projections. Other stores closed include those in Elgin, IL, Schaumburg, IL, Riverdale, GA, Ticonderoga, NY, Kenai, AK, and Cambridge, MN.
"They were not profitable from the beginning," said company spokesperson Abby Buford of the seven stores Monday morning. "These stores missed the estimate really from the onset ... they haven't improved over time, despite the hard work by the employees at these locations."
According to Buford, the Meriden location's 94 employees were notified of the closing Sunday night. They will receive pay and benefits for the next 60 days, Buford said, and can apply for work at other Lowe's stores.
Nearby Wallingford and Southington both have Lowe's locations. Meriden's store opened in 2008 and anchors a shopping plaza that includes Ocean State Job Lot, Valencia Liquor, and a Verizon Store among others.
As for the store site, according to Buford, the company is working to immediately find a new tenant. Products in the store will be moved to other stores or warehouses. Customers who had special orders from the store are being contacted, and will be able to pick them up from a sister store.
The location's surprise closing left city officials and employees scrambling Monday morning to confirm reports that it had been permanently shuttered. Trudy Magnolia of Meriden's Economic Development Office got through to Lowe's corporate office just before 11 a.m. after trying for much of the morning. An employee confirmed the closing and directed her to the company's second quarter report.
"It's unfortunate for Meriden," Magnolia said. In addition to the 94 people who have just lost their jobs, she worries about the smaller stores in the plaza. "They're going to be impacted too - that's not good for them."
Magnolia said her office will work as a "rapid response team" to help any big box stores interested in filling Lowe's space, by coordinating the various city departments that can provide information and assistance to a potential tenant, like how to go about obtaining permits.
Lowe's Companies Inc. announced early Monday that the chain had fallen short of second quarter sales projections, according to Reuters. Its stock fell 5 percent before the market opened Monday, the L.A. Times reported.
"Despite some recovery in our seasonal business, our performance for the quarter fell short of our expectations," Robert Niblock, Lowe's chairman, president and CEO, told Reuters.
Lowe's, which, after Home Depot, is the nation's second-largest home improvement chain, has had a worse-than-projected year sales-wise. Analysts blame the recession, saying homeowners were reticent to spend money on home improvement projects.
Stores that were open for at least year saw a .3 percent decrease in sales according to Reuters. This quarter's sales hit $14.54 billion – a full $260 million less than analysts projected.
Some believe the closing is a sign that the local economy is in worse shape than most previously thought.
“It’s surprising,” said David Cadden, a professor of management at Quinnipiac University, in a statement about the closing Monday. “One would think that with Lowe’s focus on ‘Do it Yourself,' its business would be stable or even growing in an economic downturn. This could be an indication that the local economy might be even worse than we think.”
Magnolia of the Economic Development Office said that despite recent high-profile store closings, the number of retail stores shuttered nationally in the first quarter of 2011 wasn't as high as that of the first quarter of 2010. She added that the close proximity of Lowe's stores in Wallingford and Southington likely helped speed along the Meriden location's demise.