Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Lowe’s to Buy Orchard California Stores for $205 Million

June 17 (Bloomberg) -- Lowe’s Cos., the second-largest U.S. home-improvement retailer, agreed to pay $205 million to add at least 60 Orchard Supply Hardware stores in California after Orchard filed for bankruptcy protection.

The acquisition will provide the retailer with a smaller store format and give it access to new customers in California, where it already operates 110 outlets, Lowe’s said today in a statement. In addition to the cash purchase price, it will assume amounts owed to almost all of Orchard’s supplier partners.

Lowe’s, based in Mooresville, North Carolina, said it wants to add stores in California as the housing market recovers. The chain operates half as many California stores as Home Depot Inc., helping explain why its comparable-store sales trailed its larger rival in the first quarter, Chief Executive Officer Robert Niblock has said.

“This is a fairly unique opportunity” because real estate prices and local zoning restrictions limiting the size of stores make expanding into cities such as Berkeley and Santa Cruz difficult to justify financially, Niblock said today by telephone.

Lowe’s rose 0.5 percent to $41.37 at the close in New York. The shares have climbed 16 percent this year compared with a 15 percent gain for the Standard & Poor’s 500 Index.

Smaller Stores

Orchard stores average about 36,000 square feet, compared with about 113,000 square feet for Lowe’s locations, Niblock said.

Orchard, which has 91 hardware and garden stores, listed assets of $441 million and liabilities of $480.1 million in Chapter 11 papers filed in U.S. Bankruptcy Court in Delaware today. The company blamed bankruptcy on declining sales caused by competition from larger stores like those belonging to Lowe’s and Home Depot.

Lowe’s said the offer will act as a “stalking horse bid” in an auction process, meaning it’s an agreement between the two parties for San Jose, California-based Orchard to try to attract other bids.

Lowe’s will get a break-up fee of 3 percent of the purchase price if it fails to acquire Orchard’s assets, according to the statement. An alternative bidder must outbid the retailer by at least $12 million.

Orchard’s other stores will be closed in going-out-of-business sales conducted by outside liquidators.

The bankruptcy case is In re Orchard Supply Hardware Stores Corp., 13-11565, U.S. Bankruptcy Court, District of Delaware.

To contact the reporters on this story: Andrea Tan in Singapore at; Chris Burritt in Greensboro at

To contact the editor responsible for this story: Douglas Wong at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.