Home > Uncategorized > Walmart to Close 269 Stores

Walmart to Close 269 Stores

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BUSINESS DAY
By HIROKO TABUCHI

JAN. 15, 2016

Walmart will shutter more than 250 stores worldwide and exit its Walmart Express small-store format entirely as the company adjusts to stiff competition from its online nemesis, Amazon.

Walmart said in a statement on Friday that it would close 269 stores globally, of which 154 would be in the United States. That is about 2 percent of Walmart’s global footprint of 11,600 stores, and 3 percent of its 5,310 locations in the United States. Those stores are scheduled to close by the end of January.

The company has been slow to pull out of a flat sales period after the recession. And although sales have improved at Walmart recently, the retailer, the world’s largest by sales, has warned investors of lower profits next year because of its investments in its work force and its e-commerce operations.

About 16,000 store employees will be affected worldwide by the closings, Walmart said, including about 10,000 in the United States.

Walmart said it intended to transfer as many workers as it could to nearby stores and offer severance pay to those who do not find new positions. The company is the nation’s largest private-sector employer.

Even as it shutters locations, Walmart said it would open more than 300 stores globally in its next fiscal year, which starts in February. That number includes 50 to 60 new stores in the United States.

In all, the closings account for less than 1 percent of global square footage and revenue, Walmart said.

“Actively managing our portfolio of assets is essential to maintaining a healthy business,” Doug McMillon, Walmart’s president and chief executive, said in a statement. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future,” he said.

“It’s important to remember that we’ll open well more than 300 stores around the world next year,” he said. “So we are committed to growing, but we are being disciplined about it.”

Of the 154 locations Walmart will close in the United States, 102 will be Walmart Express stores, a small-format pilot program that the retailer began in 2011. But after a lackluster performance, Walmart said it would focus instead on its slightly larger Neighborhood Market format, which has logged strong sales.

Walmart is also closing 12 supercenters and four Sam’s Club membership stores.

Walmart’s online sales growth has been slowing, leading to concerns that the retailer is losing to the likes of Amazon in the all-important battle for online dollars.

 

 

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