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Wal-Mart to Convert Some Closed Sam's Club Sites to Fulfillment Centers

Wal-Mart to Convert Some Closed Sam's Club Sites to Fulfillment Centers
(Ken Wolter/Dreamstime)

Friday, 12 January 2018 08:27 AM

It’s a bittersweet day for employees at Wal-Mart Stores Inc.

On the same day that the company boosted its starting pay to $11 an hour, it said it was closing 63 Sam’s Club warehouse locations. The move came after a review of the chain, reflecting that cost-cutting will remain a key focus for the world’s biggest retailer -- even as it gives workers a raise.

“After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy,” Sam’s Club said in a Twitter post. In a statement late Thursday, the company said it’s offering support to affected workers, including a bonus and 60 days of pay, plus severance for eligible employees.

Sam’s Club will convert as many as 12 of the locations being closed to e-commerce fulfillment centers, helping it provide faster delivery of online orders. The first to be converted will be in Memphis, Tennessee. The Bentonville, Arkansas-based company said it will record a charge of about 14 cents a share related to the closures, mostly in the fourth quarter.

The Business Insider website earlier reported the number of Sam’s closures, which span from Seattle to Atlanta, according to local news reports and state WARN notices about displaced workers.

Founded in 1983, the chain will have 597 Sam’s Club locations after the closures. It employs about 100,000 in the U.S., according to its website. It accounts for about 13 percent of the company’s total revenue.

Shares of rival Costco Wholesale Corp., whose locations tend to be in more affluent areas along the coasts, rose about 2 percent on the news.

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Wal-Mart unit will convert some sites to fulfillment centers
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Friday, 12 January 2018 08:27 AM
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