Activist investor D.E. Shaw & Co. has built an active stake in U.S. home retailer Lowe’s, sources tell CNBC.
The firm is concerned about its performance relative its peers, the sources said. It is not pushing for consolidation with another home retailer at this time.
D.E. Shaw declined to comment. Lowe’s wasn’t immediately available to comment.
Shares of Lowe’s, which has a market capitalization of $83.6 billion, were trading up more than 5 percent in afternoon trading, after Bloomberg first reported the position. Shares of Home Depot also jumped on the news, though came back down.
Lowe’s has by and large lagged behind its biggest rival Home Depot. It has made efforts to catch up the Atlanta-based retailer in part by mimicking its strong professional and contracting business. These efforts include two acquisitions worth more than $500 million announced last May.
Lowe’s has said it expects revenue to increase roughly 5 percent by the end of fiscal 2017, with sales at its established stores rising 3.5 percent. Lowe’s is also on track to have added about 25 home improvement and hardware stores before the end of its fiscal fourth quarter.
In an attempt to lure younger shoppers, Lowe’s has been experimenting with technology and opened up “smart home centers” at some locations ahead of the holidays.
Earlier this year, Lowe’s rolled out a virtual reality experience that offers DIY assistance through tutorials inside Lowe’s Holoroom. Then, in September, Lowe’s launched two new augmented reality apps — one for measuring an object, or distance, within the phone’s camera view, and one for viewing images of furnishings, at scale, within a user’s own home.
The stock is up more than 40 percent from a year ago.