U.S. (Notifix).-Lowe’s, the world’s second largest home improvement retailer, announced on August 12th, further progress in its plans to acquire the majority of assets of Orchard Supply Hardware, including 72 stores, for approximately $205 million in cash, plus the assumption of payables owed to nearly all of Orchard’s supplier partners, subject to Bankruptcy Court approval. 

Orchard initiated Chapter 11 proceedings on June 17, 2013 in the U.S. Bankruptcy Court for the District of Delaware.  Based in San Jose, California, Orchard reported annual revenue of $657 million for fiscal 2012.

Lowe’s plans to have Orchard operate as a separate, standalone business, retaining its brand under the leadership of Orchard’s current management team.  Once completed, the acquisition will enable Lowe’s to expand its presence in California and reach a new customer base through the addition of Orchard’s smaller-format stores in densely populated areas. 

Robert A. Niblock, Chairman, President and CEO of Lowe’s, said, “We are very pleased to be moving forward with the acquisition process.  Strategically, the transaction will provide Lowe’s with an attractive opportunity to increase our store footprint in California, where we are currently underpenetrated, through a neighborhood store format that is complementary to our strengths in big-box retail.  Orchard’s hardware and garden stores have a loyal customer base and are situated in high-density, prime locations that are difficult for larger format retailers to enter.  We see significant potential for Orchard as a standalone business within Lowe’s portfolio, and we look forward to the opportunity to participate more fully in California’s economic recovery.”