Redevelopment firm RONA announces restructuring that will result in 500 layoffs, including 250 in Quebec. Although weakened, the Boucherville headquarters remain.
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“The corporate reorganization resulted in the elimination of 300 corporate positions, including nearly 250 positions within the RONA network in Quebec. Of these, 200 were based at the Boucherville headquarters,” says Valérie Gonzalo of RONA. The other 50 are available in company stores (RONA and Réno-Dépôt). The organization’s headquarters remain in Boucherville on Montreal’s South Shore.
“Faced with the current economic downturn, like other organizations that have recently announced restructuring, RONA has had to adapt to reflect the new market realities,” the statement said.
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The CEO of the Quebec Hardware and Building Materials Association (AQMAT), Richard Darveau, was surprised by the announcement and still risks three hypotheses to explain RONA’s decision.
Richard Darveau, President and CEO of the Quebec Hardware and Construction Materials Association (AQMAT). Longueuil, November 27, 2020. PIERRE-PAUL POULIN/LE JOURNAL DE MONTRÉAL/QMI AGENCY Photo Pierre-Paul Poulin
“A chilly late spring that slowed sales of seasonal goods. A series of rate hikes have caused renovations and new construction to slow down. And forest fires, which announce a phenomenon of scarcity and thus further increases in the price of building materials.
Prepare yourself… fast
Louis Hébert, a professor at HEC Montreal, says he’s less surprised. “It’s in tune with the times,” he analyses. We see that several companies are currently preparing for a possible shock.
Like AQMAT, he’s watching for signs of a slowdown. With forecasts of a slowdown that could be protracted, “it’s normal for business leaders to change stance. Better prepare now than too late.”
However, Richard Darveau is still surprised at how quickly New York-based Sycamore Partners, the new owner of Lowe’s Canada, is reacting to the observed slowdown. “You can see how quickly a company managed by an American fund can pull the trigger.”
If, in his view, the employees at the head office as well as the distribution centers are likely to be particularly affected by this announcement, the Rona dealers should not be too worried.
Richard Darveau backs the numbers and doesn’t anticipate a similar bleed at its competitors (Home Depot, Canac, Home Hardware, Patrick Morin, BMR, etc.). “Yes, we are seeing a drop from the peak during the pandemic. But if we step back a bit, we quickly find that we’re returning to a normal level of business, similar to what we did before the pandemic in 2019.”
Owned by a US mutual fund
It will be recalled that a first wave of layoffs hit RONA’s Quebec headquarters, then owned by the American company Lowe’s. The hardware store had laid off 60 employees in Boucherville, causing concern and uncertainty in all departments.
In February 2023, RONA announced that it would become an independent company again, following its acquisition by Sycamore Partners, a New York-based private equity firm, following a transaction with Lowe’s.
“The organization believes that its transition plan to make RONA the leader in the home renovation sector in Canada will have a positive impact on RONA’s profitability and will benefit the organization’s stakeholders over the long term,” added the press release issued today.
According to the company, RONA operates or services approximately 425 owned and affiliated stores under the Lowe’s, RONA, Réno-Dépôt and Dick’s Lumber brands and employs approximately 22,000 people across the country.
Geographical distribution of the 500 layoffs:
- 250 in Quebec
- 250 in other provinces
Organizational breakdown of the 500 redundancies:
- 200 at Boucherville headquarters
- 300 in company stores (Réno Dépôt and Rona l’Entrepôt)
RONA today:
- 425 stores in Canada
- 4 brands: RONA, Réno Dépôt, Lowe’s, Dick’s Lumber
- 22,000 employees
Who is Sycamore Partners?
- Foundation: 2011
- Headquarters: New York
- Owners of: RONA, Lowe’s Canada, Staples, Bureau en Gros, Ann Taylor, Talbots, The Jones Group, etc.