Lowe’s crosses the Pacific gains stake in top retailer
Lowe's Companies has formed a partnership with Australian retail giant Woolworth's. WFAE's Simone Orendain has more: Lowe's will own a one-third stake in Woolworths. The Mooresville-based home improvement chain says it will invest $100 million a year in the first four years of the partnership. A week ago, Lowe's said it planned to stop store expansion projects in the US because the recession has hampered sales. Mostly because of poor sales, Lowe's second quarter earnings report last week showed a 19 percent drop from the same period a year ago. Lowe's spokeswoman Chris Ahearn says Australia has a stable economy and high homeownership rate. She says Woolworths approached Lowe's in March and prior to that, Lowe's had not considered the Australian market. "It is an island," she explains. "It is smaller than opportunities you might see in Canada, for example. But it's very positive and we feel that the opportunity to partner with Australia's largest retailer is a great opportunity." The partners have already made a takeover bid for Australia's number two hardware distributor. This is Lowe's first venture outside North America. The company has stores in Canada and plans to open stores in Mexico by the end of the fiscal year.