American home improvement retail giant Lowe's is on target to succeed in its bid to acquire the Orchard Supply Hardware Stores chain.
Debt-ridden Orchard, which operates mostly in California, filed for bankruptcy in June. On the same day, rival Lowe's said it would pay $205m for around two-thirds of Orchard's stores, but it was obliged to wait until August 9 to see if a better offer would be made.

In the event, no further bids were received, and Lowe's now intends to take 72 of Orchard's 91 stores and virtually all of its debt to suppliers. The deal is expected to go through by the end of this month, subject to Bankruptcy Court approval.

Orchard will continue to trade as a separate, standalone business under its own brand and with the current management team. Lowe's already has 110 outlets in California, typically three times larger than Orchard's.

Orchard ran into trouble partly as a result of significant recapitalisation dividends paid to Sears Holdings, from which Orchard was spun off in January 2012.

Commenting on Lowe's acquisition of the business, chairman and ceo Robert A Niblock said: "Strategically, the transaction will provide Lowe's with an attractive opportunity to increase our store footprint in California, where we are currently under-penetrated, through a neighbourhood 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."