US retail giant Wal-Mart Stores Inc has announced the closure of 63 of its Sam’s Club locations, with plans to convert up to 12 of the impacted clubs to e-commerce fulfilment centres in bid to increase the delivery speed of online orders.
In an announcement last week, Wal-Mart said the first of these converted centres will be located in Memphis, Tennessee, while the remaining facilities not earmarked for conversion will close over the next few weeks.
Currently, Wal-Mart and Sam’s Club operate more than 5,400 locations across the US; after the actions announced today the company will have 597 clubs.
The retail giant says the action was taken after a thorough performance review. “Transforming our business means managing our real estate portfolio and Wal-Mart needs a strong fleet of Sam’s Clubs that are fit for the future,” explains John Furner, president and CEO of Sam’s Club. “We know this is difficult news for our associates and we are working to place as many of them as possible at nearby locations. Our focus today has been on those associates and their communities, and communicating with them.”
Wal-Mart says it will provide support and resources to those associates who are affected, including a one-time cash bonus announced last week for eligible associates of up to US$1,000, 60 days of pay, as well as severance to those eligible.
The company will record a discrete charge of approximately $0.14 per share related to these actions, with the vast majority of this in its fourth quarter. Further details will be shared, as appropriate, when the company releases quarterly results on 20 February, 2018.
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By GlobalDataMeanwhile, Wal-Mart has also revealed plans to increase the starting wage rate for all hourly associates in the US to $11, expand maternity and parental leave benefits, and is also creating a new benefit to assist associates with adoption expenses.
We are early in the stages of assessing the opportunities tax reform creates for us to invest in our customers and associates and to further strengthen our business, all of which should benefit our shareholders,” said Doug McMillon, Walmart president and CEO.
