Wal-Mart Stores on Friday said it would close 269 stores — 154 of them in the U.S. including all of its 102 Walmart Express small-format stores.
The decision to close the stores follows a review of the retailer's portfolio initiated in October to ensure its stores were aligned with its strategy, Walmart said. In total, the impacted stores represent less than 1% of Walmart's 11,600 stores worldwide. The closures are expected to impact 16,000 employees, including 10,000 in the U.S.
“Actively managing our portfolio of assets is essential to maintaining a healthy business,” Doug McMillon, president and CEO of Walmart, 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. 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.”
As previously reported in SN, Walmart a year ago dialed back plans to expand through the Express format, which was launched in a test phase in 2011, folding the 12,000- to 16,000-square-foot stores into its food-and-drug Neighborhood Market division. The company at one time envisioned the concept to potentially number in the thousands and serve as a defense against fast-growing small discounters like Dollar General. Express stores were largely concentrated in the Carolinas and in Texas.
Walmart said it would instead focus on strengthening Supercenters, optimizing Neighborhood Markets, growing its e-commerce business and expanding pickup services. The U.S. closures also include 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers, and four Sam’s Clubs. Walmart said it would publish a list of the intended store closures shortly.
More than 95% of the closing 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," Walmart said. "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."
Domestically, Walmart intends to open 50 to 60 Supercenters and 85 to 95 Neighborhood Markets in fiscal 2017, which begins Feb. 1. In the same period, Sam’s Club plans to open between seven and 10 new locations.
Internationally, Walmart intends to open between 200 and 240 stores during the coming year. The closures announced Friday also include 115 stores outside the U.S. — 60 money-losing sites in Brazil and 55 in other Latin American markets.
Walmart estimated the closures would result in a financial hit of 20 cents to 22 cents per share, with most of it to be recognized in its current fourth quarter. Approximately 75% of the impact relates to U.S. closings and the remaining portion involves Walmart International, with a large majority of that relating to closures in Brazil. Walmart will report its fiscal 2016 fourth-quarter and full-year results on Feb. 18.
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