Giant home improvement retailer Lowe's is giving up on the smart home market. The company, which has more than 2,000 locations, recently announced plans to exit the home automation market and is seeking a buyer for its Iris Smart Home business as part of a “strategic reassessment.”
The announcement is part of multiple other maneuvers by Lowe’s (NYSE: LOW) that include closing its Orchard Supply Hardware business, selling its Alacrity Renovation Service and all its locations in Mexico, and shutting more than 50 locations in the U.S. and Canada.
Speaking to investors, president and CEO Marvin Ellison, noted, “Our top priority this quarter was taking the necessary steps to build a sustainable foundation to position Lowe’s long-term success, by exiting underperforming stores of non-core businesses. This will allow us to intensify our focus on our core retail business.”
All of these moves will cut $280 million in charges associated with leases, inventory and severance packages. Specifically, $14 million of the charges are related to the proposed sell off of both Iris and Alacrity. The company offered no details on Iris sales figures.
Overall, Lowe’s reported strong net earnings of $629 million for the quarter ended Nov. 2, 2018. Sales for the third quarter increased 3.8 percent to $17.4 billion over the third quarter of 2017, and comparable sales increased 1.5 percent.
“These were difficult decisions to make,” added Ellison. “These actions send a clear message that we’ll no longer pursue ventures that dilute our return on capital.”
He called any underperformance in Q3 a result of “poor execution, not a macro concern… We’re not chasing short-term fixes, but we have every expectation that our actions and initiatives will begin to drive improvements in our business as we enter 2019.”
The dumping of Iris is quite a shift for Lowe’s, which back in 2015 wowed CES attendees with its Innovation Lab that featured loads of technology, including robots.
Back in 2013, CE Pro was impressed with the capabilities of Iris, which had launched the previous year at a $179 price point for thermostat control, smart plugs, etc. The $9.99/per month system controlled nearly 100 products via the Iris hub, which features ZigBee, Z-Wave and Wi-Fi. It also had a cellular module, along with control of cameras and door locks.
Lowe’s believes the quality of the Iris platform is strong and is committed to finding a buyer that will provide high quality service backing the product. A company spokesperson told CE Pro:
“We do not have timing or additional details to share at this time, and it remains business as usual. There are no changes to Lowe’s support of the brand, product or service as we search for a buyer. Offering customers smart home products is still an important way we serve their needs, and we will continue to carry Iris and other smart products on our shelves. However, we will focus on the retail side of the Iris business, not on supporting our own smart-home platform. The smart home category continues to be an important part of our customers’ home improvement journey, and Lowe’s remains committed to carrying the breadth and depth of smart home products and brands to meet our consumers’ needs now and in the future.”