Lowe's closes stores even as remodeling activity soars
Lowe's (LOW) announced the closing of 20 underperforming home improvement stores this week. Ironically, the news came as a report showed a 9.5% rise in home remodeling activity in August. Lowe's closed 10 stores on Oct. 16 and will shutter another 10 in the coming month. As Lowe's announced a need to close stores to maintain a competitive financial position, the BuildFax Remodeling Index released a study showing that remodeling activity grew significantly in August, reaching a seven-year record high. BuildFax's index helps businesses in the remodeling industry assess activity in that segment of the market. The flurry of new remodeling business is probably the result of homeowners refinancing mortgages at lower interest rates and using their monthly savings to remodel their homes, said Joe Emison, vice president of research and development at BuildFax. BuildFax estimates that 3.3 million residential remodeling projects will occur in 2011, up from 3.1 million in 2010. "This is one segment of the economy that is showing continued strength, even as other sectors struggle," Emison said. In August, the West (11.9 points; 9.3%), Midwest (11.4 points; 10.8%), and South (1 point; 1%) all had month-over-month gains. Meanwhile, remodeling efforts fell less than 1% in the Northeast. Write to Kerri Panchuk.