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Walmart to shut down 269 stores
16
Jan '16
Doug McMillon
Doug McMillon
American retail giant Walmart has announced plans to close 269 stores in the US and across the world as part of an exercise to “actively manage” its portfolio of assets.

“Actively managing our portfolio of assets is essential to maintaining a healthy business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It's important to remember that we'll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.”

The announcement came after a thorough review of Walmart's nearly 11,600 worldwide stores that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans. In total, the impacted stores represent less than 1 per cent of both global square footage and revenue.

The company will close 154 locations in the US, including 102 smallest format stores, Walmart Express and instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers. Also covered in the closures are 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers, and four Sam's Clubs.

Internationally, the company is closing 115 stores outside the US. This includes 60 recently-closed, loss-making stores in Brazil, while the remaining 55 stores are primarily small, loss-making stores in other Latin American markets, the company announced on its website.

The financial impact of these closures is estimated to be approximately $0.20 to $0.22 of diluted earnings per share from continuing operations, with approximately $0.19 to $0.20 expected to impact the fourth quarter of fiscal 2016. The remainder of the impact will fall into the first half of fiscal 2017. Approximately 75 per cent of the impact relates to US closings and the remaining portion involves Walmart International, with a large majority of the international impact relating to the closures in Brazil.

The company further said that approximately 16,000 associates or employees would be impacted by the decision, about 10,000 of them in the US but would be compensated. More than 95 per cent of the closed stores in the U.S. are within 10 miles on average of another Walmart, and “the hope” is that these associates will be placed in nearby locations. Where that isn't possible, the company will provide 60 days of pay and, if eligible, severance, as well as resume and interview skills training. Whether with Walmart or elsewhere, the company's objective is to help all associates find their next job opportunity.

“The decision to close stores is difficult and we care about the associates who will be impacted,” McMillon said. “We invested considerable time assessing our stores and clubs and don't take this lightly. We are supporting those impacted with extra pay and support, and we will take all appropriate steps to ensure they are treated well.” (SH)

Fibre2Fashion News Desk - India

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