NATICK, Mass. — BJ’s Wholesale Club said Wednesday that it would close five clubs and lay off almost 500 workers as part of a strategic restructuring that some observers are interpreting as a prelude to a sale.
In a separate statement, BJ’s said Wednesday that its longtime chief financial officer, Frank Forward, would retire at the end of the month, along with Thomas F. Gallagher, its executive vice president of club operations.
The clubs slated for closure include three in the Atlanta market, as well as stores in Charlotte, N.C., and Sunrise, Fla. BJ’s in a statement said the stores had “historically underperformed,” and combined to lose an estimated $4 million to $5 million in the current fiscal year. They will close by the end of the month.
“The savings associated with the actions we are announcing today will be invested in new clubs, remodels and information technology, all of which are vital to our competitiveness, future growth and profitability,” Laura Sen, BJ’s chief executive officer, said in a statement.
About 380 store-based employees would be affected by the store closures. An additional 61 workers at BJ’s headquarters and 53 field-based employees were also let go, a company spokeswoman told SN.
Robert Eddy, BJ’s senior vice president and director of finance, was named to succeed Forward. Eddy joined BJ’s in 2007 as part of a planned succession for Forward, who has been with BJ’s since its founding in 1984 and has served as CFO since 1997. Cornel Catuna, BJ’s senior vice president of field operations, will succeed Gallagher, who is retiring for health reasons, BJ’s said.
BJ's said the actions would result in after-tax charges of between $42 million and $44 million in its current fiscal fourth quarter. It estimated that closing the clubs would cost around $43 million in lease termination costs and $2 million in severance payments, while the restructuring and impairment expenses will total $26 million to $28 million, resulting in after-tax charges of $15 million to $17 million in the fourth quarter.
BJ’s remains the subject of leveraged buyout speculation, but the company made no mention of such actions in its releases Wednesday. The investor Leonard Green & Partners last year bought a stake in BJ’s, saying it intended to discuss a going-private transaction with management. The retailer is also said to have engaged an investment bank in order to conduct an auction.
