Last updated on January 16th, 2018
Sam’s Club, a division of Walmart Stores Inc., late yesterday announced changes to the business unit’s U.S. real estate portfolio, with the closure of 63 clubs around the country. The company’s press release came after local and national news outlets across the country reported that some Sam’s Club employees reported to work yesterday morning to find locked doors and notices about the closures.
According to the company, its actions were 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 Club says it will convert up to 12 of the impacted clubs to e-commerce fulfillment centers in a move that will speed delivery of online orders, with the balance of the facilities closing over the next few weeks. After the closures, the company will operate 597 clubs across the U.S.
The first of these converted e-commerce fulfillment centers will be located in Memphis, Tennessee.
Walmart says it will provide support and resources to those associates who are affected, including the bonuses of up to $1,000 it announced yesterday and 60 days of pay, as well as severance to those eligible.
“We need great people to help lead us into the future, and we hope that many of them will stay with the company at either a local store or club,” Furner said. “Change is never easy, but we’re making these decisions as part of running a healthy business.”
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. Walmart says further details will be shared, as appropriate, when the company releases quarterly results on Feb. 20.
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They got their good PR out of the Walmart raises and bonuses. Now comes the reality: the Waltons always make sure the fortune doesn’t suffer.