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Mark Vaughan-Jackson: Counting the cost of RONA closures in Newfoundland

Six RONA locations in Newfoundland and Labrador are slated to close Jan. 27, 2019 This one on O’Leary Avenue in St. John’s is one of them.
Six RONA locations in Newfoundland and Labrador are slated to close Jan. 27, 2019. This one on O’Leary Avenue in St. John’s is one of them. - Joe Gibbons

It’s never good when a store suddenly announces it is closing.

It’s even less good when a big company suddenly announces it is closing dozens of stores across the country — six of them in this province … less than two months before Christmas.

But that’s what happened Monday when U.S.-based Lowes announced it is closing 31 RONA locations across Canada and a further 20 in the U.S.

Rumblings began on media sites and social media Sunday evening, when RONA workers were called to meetings. Their stores will close effective Jan. 27, 2019. (The RONA location in Wabush is not affected.)

Six RONA stores (Paradise, C.B.S., Bay Roberts, Goulds and the O’Leary Avenue and Torbay Road locations in St. John’s) along with the RONA truss plant and the RONA regional office in St. John’s, are gone.

Up to 321 employees — 260 of them unionized — will be out of work in January.

The union representing those 260 people was quick to respond.

“We will be insisting on an urgent meeting with the company and we will demand fair and proper treatment for our members," Debbie Romero, executive secretary-treasurer for the Atlantic Canada Regional Council of Carpenters, Millwrights and Allied Workers, said in a statement. “This is a significant economic blow to hundreds of people and to the economy of Newfoundland and Labrador. Our members, the employees of RONA and the people of Newfoundland and Labrador deserve better from Lowes."

The union says it will review the severance letters presented to employees and communicate with its membership regarding the offers.

The comments so far to other media, and on social media posts, paint a grim picture of families wondering what they’re going to do.

Younger employees are wondering where the next job will come from, and will it even be here in their home province. Older employees, some of whom have been with the same company for decades, are wondering what happens to them in terms of retirement, pension and so on.

The residential construction industry is still figuring out what the news will mean for their sector.

The news was a surprise for the Canadian Homebuilders Association – NL (CHBA-NL) — it was only Saturday night that the association presented its annual BERG awards, and RONA was a main corporate sponsor for the event.

CHBA-NL CEO Victoria Belbin said her members are used to adapting quickly. She expects them to forge new relationships with other suppliers in the sector to make up for RONA’s absence.

But the news is still sad, and she said CHBA-NL members have already expressed concern for the hundreds of employees losing jobs, and their families, and sadness that a longtime partner in the industry will be gone.

“It’s history, this is a tradition. Chester Dawe’s and RONA, they were a big builder of our industry, so we’re very sad. The name has changed, but a lot of the people haven’t through the years. Our members had relationships with those individuals and are building their business relationship on those partnerships.”

While the banner may say RONA, lots of people remember these stores were once Chester Dawe’s.

Founded in 1945, Chester Dawe’s was an institution in these parts, although the family sold their shares in the company when Quebec-based RONA bought it out in 2006.

Then, in 2016, U.S. home-improvement giant Lowes bought RONA for $3.2 billion.

So, is this just a case of the cost of corporate growth?

Is it the natural conclusion of the little fish, big fish, bigger fish scenario? Local company builds itself over decades, attracts the interest of larger company and is bought out. Larger company hits the radar of an even larger multinational and gets bought out — then the bigger company digests its meal and discards the bits it decides it doesn’t want.

In its release, Lowe’s said the stores being closed were “underperforming.”

I know there are a lot of other options in the building supply/home-improvement market here — from the Kents and the Home Hardwares and Home Depots and LeDrew's, and the smaller independents, but was RONA’s entire presence on the island portion of the province underperforming?

I confess I find that hard to swallow, not that I’m an expert.

The residential construction sector in this province seems to be in pretty good shape.

According to the CHBA-NL, in 2017 there were 1,400 housing starts in the province. Residential construction, combined with the renovation and repair sector, produced $1.5 billion in investment value and supported close to 12,000 jobs, amounting to $766 million in wages.

Seems pretty healthy to me.

“It’s depending what their definition of ‘underperforming’ is,” Belbin said. “I know that there are millions of dollars in sales that are happening, even from last year. It’s a significant amount of sales that happen at these stores. I wouldn’t consider them underperforming. There’s definitely going to be space for our other supplier companies to step into that market.”

As for the overall impact, the bigger effect of these closures remains to be seen.

The news is still fresh and still raw, and most of those directly affected are still reeling, too shocked to begin to come to terms with how this will affect them.

Between now and Jan. 27, watch this space as more people speak on what these closures will mean for their families, their businesses and their communities.

Mark Vaughan-Jackson is The Telegram’s business editor. He can be reached at mark.vaughan-jackson@thetelegram.com. Twitter: @Telbookmark.

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