Sam's Club Abruptly Closes 63 Stores
Sam’s Club Abruptly Closes 63 Stores
Not All Going Vacant as Walmart Subsidiary Will Convert 10 to Ecommerce Fulfillment Centers
Sam’s Club, a division of Wal-Mart Stores Inc. (NYSE:WMT), abruptly posted closure notices on 63 of its stores across the country yesterday.
The closings impact about 10% of its fleet of 660 clubs and are expected to affect about 10,000 employees, according to various media reports.
The action was taken after a thorough performance review.
“Transforming our business means managing our real estate portfolio and Walmart needs a strong fleet of Sam’s Clubs that are fit for the future,” said 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.”
Sam’s Clubs stores average 134,000 square feet, which would mean that closures could impact about 8.4 million square feet of ‘big box’ retail space. However, not all of it will end up vacant.
Sam’s Club said it is converting 10 of the closed locations into e-commerce fa store at fulfillment centers, and possibly up to 12. The first of the conversions will be for a 120,000-square-foot store at 1805 Getwell Road in Memphis.
Walmart owns most of its Sam’s Club stores (591 out of 660), the others are leased. Sam’s Clubs stores in the U.S. post about $57 billion in revenue per year and account for about 12% of Walmart’s total sales.
Walmart reported that Sam’s Club comparable store sales were up 2.8% year-over-year and that foot traffic was up 3.6%
The company will record “a discrete charge” of approximately $0.14 per share related to these actions or approximately $414.73 million.