Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

File photo of a Rona outlet in Toronto.

Peter Power/ The Globe and Mail

Rona will try to rebuild its profitability by closing 11 stores in two provinces and cutting more administrative jobs, the Quebec-based home improvement retailer announced Thursday.

Eight of the stores are in Ontario and three are in British Columbia. Four of the Ontario locations were previously targeted for closing.

The three B.C. stores – in Duncan, Kamloops and Abbotsford – will close in October. Six Ontario stores in Mississauga, Windsor, Woodbridge, London, Huntsville, and Collingwood will also close in October and two Ontario stores in Toronto and Aurora will close in December.

Story continues below advertisement

Rona said it told employees last week that 125 more jobs will be eliminated in four administration centres across Canada – in addition to 200 administrative positions that were announced in February.

"With the measures announced today, Rona will become more agile and efficient, with a simplified business structure and an even stronger balance sheet," said Robert Sawyer, Rona's president and chief executive officer.

"By focusing on our strategic operations, we will unlock the full potential of our network and reinvest a significant share of the savings in initiatives that will allow us to offer even more to our customers and to our affiliated and franchised dealers."

Last week, Rona announced plans to sell its commercial and professional market division for about $215-million.

The company is aiming to reduce annual operating expenses by $110-million – $70-million more than in its prior plan – but it will record up-front costs and accounting measures in its second quarter.

Rona said it will record $220-million of adjustments related to the restructuring during the quarter, of which $195-million will be non-cash items.

The company plans to reinvest 30 per cent of the cost savings in the remaining business.

Story continues below advertisement

The retailer has been struggling for years because of weak consumer spending amid slow economic growth and concerns about unemployment. It rebuffed a takeover bid last summer from U.S. rival Lowe's and faced the departure of its veteran CEO. Rona also dodged a shareholder revolt by replacing much of its board of directors.

In Quebec, the company is repositioning its Reno-Depot banner as a warehouse by reducing the number of products, but offering bigger quantities at better prices.

The updated strategic plan is an acceleration of the cost-cutting ideas announced last February, says industry analysts.

"What we're really seeing here is another case of Rona shrinking for growth," said Derek Dley of Canaccord Genuity.

He said the latest moves represent a reversal of its prior direction by closing stores and selling the professional and commercial division which it identified as a core growth area only two years ago.

"This to me shows that they're just not able to compete on the big-box level with the likes of Home Depot and Lowe's in those key markets anywhere outside of Quebec," Dley said from Vancouver.

Story continues below advertisement

The fact that Rona is closing rather than selling these locations suggests that they are underperforming and likely couldn't attract buyers, he said, adding he doubts Lowe's will try to fill the void.

Irene Nattel of RBC Dominion Securities said renovation of Rona's business model against the backdrop of a very challenging macro-economic environment will not be easy "and is best suited to patient investors."

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies