Not All Going Uninhabited 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 effect about 10% of its fleet of 660 clubs and are anticipated to impact about 10,000 workers, inning accordance with various media reports.
The action was taken after a comprehensive efficiency evaluation.
“Changing our organisation means handling our realty portfolio and Walmart needs a strong fleet of Sam’s Clubs that are suitabled for the future,” stated John Furner, president and CEO of Sam’s Club. “We know this is difficult news for our partners and we are working to position as much of them as possible at neighboring locations. Our focus today has actually been on those associates and their communities, and interacting with them.”
Sam’s Clubs shops typical 134,000 square feet, which would imply that closures could affect about 8.4 million square feet of ‘huge box’ retail area. However, not all of it will end up vacant.
Sam’s Club stated it is transforming 10 of the closed locations into e-commerce fa shop at satisfaction centers, and possibly as much as 12. The very first of the conversions will be for a 120,000-square-foot shop at 1805 Getwell Road in Memphis.
Walmart owns most of its Sam’s Club shops (591 from 660), the others are leased. Sam’s Clubs shops in the United States post about $57 billion in income annually and account for about 12% of Walmart’s overall sales.
Walmart reported that Sam’s Club comparable shop sales were up 2.8% year-over-year and that foot traffic was up 3.6%
The business will record “a discrete charge” of approximately $0.14 per share associated to these actions or around $414.73 million.