WalMart To Fire 16,000 As It Closes 269 Stores Globally
The last 12 months have not been kind to WalMart.
When the world's largest retailer bowed to pressure to raise wages for its lowest-paid employees, the living wage crowd cheered. In short order, it became apparent that the reverberations from the $1.5 billion endeavor would spell trouble for the company.
When a series of ill-fated efforts to squeeze the supply chain failed to plug the gap, the company resorted to store closures (or "plumbing" as WalMart calls it), job cuts in Bentonville, and reduced hours.
Finally, in October, WalMart threw in the towel and cut guidance. Its shares plunged.
Now, we learn the retailer is set to close nearly 300 stores, affecting some 16,000 employees worldwide.
- WAL-MART TO CLOSE 269 STORES
- WAL-MART SAYS 10,000 ASSOCIATES AFFECTED IN U.S.
- WAL-MART SEES ABOUT 16,000 ASSOCIATES AFFECTED
- WAL-MART SEES FINAL EFFECT 20C-22C ON EPS CONT OPS
- WAL-MART EXITS WAL-MART EXPRESS PILOT
This time around, "plumbing" was not cited as a factor.
Behold: the effect of an across the board minimum wage hike...
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Full PR
Wal-Mart Stores, Inc. (WMT: NYSE) today announced plans to close 269 stores in the U.S. and globally.
In October 2015, the company said an active review of the portfolio was underway to ensure assets were aligned with strategy. Today’s action follows 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 percent of both global square footage and revenue.
“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.”
Store Closings/Openings
As part of today’s action, the company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Walmart 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 following a disciplined strategy of actively managing its portfolio. Consistent with this strategy, the company is closing 115 stores outside the United States. This includes 60 recently-closed, loss-making stores in Brazil, which represents only 5 percent of sales in that market. The company has already been able to relocate many affected associates in Brazil to other stores. The remaining 55 stores are primarily small, loss-making stores in other Latin American markets. Walmart will disclose more detail about those actions, including the number of stores per market, after completing local associate and community outreach.
Walmart will continue to invest in its future, with plans to open stores worldwide in the coming fiscal year. 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 in seven to 10 new locations. Internationally, Walmart intends to open between 200 and 240 stores during the coming year.
Financial Impact
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 percent of the impact relates to U.S. closings and the remaining portion involves Walmart International, with a large majority of the international impact relating to the closures in Brazil. Walmart will report its fiscal 2016 fourth-quarter and full-year results on Feb. 18. The estimated financial impact is not included in the company’s fiscal 2016 fourth quarter and full year earnings guidance.
Store Associates and Transition Assistance
In total, approximately 16,000 associates will be impacted by the decision, about 10,000 of them in the U.S. More than 95 percent 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.”
Walmart will continue to serve the shopping needs of U.S. customers in the markets affected by today’s announcement through other Walmart locations and online at www.walmart.com. Customers can find the nearest Walmart store through the store locator function on the company’s website. A list of U.S. stores that are closing will be available today on the company’s website at approximately 11 a.m. CST.
(11 votes)
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102 of the closures are WalMart Express stores. They wanted to take over the Dollar Store market and it is not working out. Also International stores are involved in the list. And they are opening more stores so it all works out in the wash.
How come ZH is not talking about GE letting China have all their Appliance operations. Now your washing machine/refrigerator/stove will be made by slant eyes. I guess it's more fun to bash WalMart.
It's not the wage hike that caused the problem. It was all the gyrations WalMart went through to AVOID PAYING FOR THE WAGE HIKE that did it!
It would have eaten a bit into their profits...big deal. They'd have made it up soon enough...
But, apparently not soon enough for THEM.
Die WalMart, DIE! And I will visit the sites of your closed stores, and sterilize the earth with salt so you never rise again...
How I HATE that store! 27 registers, and 2 people working. One of whom isn't even AT a register...she's "monitoring" the self-check out...(If you have to put paid labor at the self-check out, what is the fucking POINT!?)
Fuck those Waltons...their mother should have eaten them while their heads were still soft...
Most of these comments are union progressive drivel.
Wal-Mart is a great company that has provided good employment to thousands and thousands of people. It is an efficient, well-run company. They procure good products at competitive prices and deliver them to customers in neighborhood stores. I have sold to Wal-Mart over the years. They are sharp purchasers, fair with suppliers, and they pay their bill on time.
Unions and government want a controlled economy and they want companies like Wal-Mart to dance to their tune and underwrite their social agendas. That usually doesn't turn out very well and sometimes there are spectacular train wrecks.
Stay tuned. This government-managed economy will derail a few more trains before their through.
You guys are overthinking it..
it was just a big news splatter on the headlines to drive the market down, Algo's don't really read the details, but the headlines screamed SELL.. so mission accomplished
The minimum wage? Come off it, Tyler. Most of these stores would have closed anyway. Not many people have as much money as before to waste on cheap crap from China that they don't need.
Walmart claim (and they have no reason to lie about something so easy to verify) that most of the closing outlets were within 10 miles of another Walmart. Too many Walmarts, not enough shoppers.
The "global" closures are in Latin America. Most of them are in Brazil, victims of the recession there.
(As for the claim that they plan to open new stores in presumably less saturated US markets in fiscal 2017, I confess I'll believe that when I see it. Minimum wages might force Walmart to think twice there.)
If one of the local WalMarts closes, I'll need ammunition.
Culling the herd of unemployed troglodytes dumped by WalMart will become a necessity before they breed or cause mischief.
Disclaimer: I don't do taxes, except my own. That said, wouldn't the "fair value" of the stock options be "compensation" in the year that title to them passed to the COE/CFO. Much like W-2 wages for that year ???
Here's the store closure list:
http://news.walmart.com/news-archive/2016/01/15/walmart-continues-sharpe...
Interesting that almost all of the store closures are in the south.
Customers boycotting WM for banning the Confederate Flag?
Methinks so.
That is where the FEMA conversions are taking place; those who carry the Confederate flag, a Bible, and shot gun...you know the "new terrorrrissts" that once was a patriot. Up is the new Down and trending that way (Down) as well.
269 stores, that have to be at least 2/3 of its its chain shutting down, can it even cover america in what is left?
It's not even 1/3 of the brick and mortar inventory.
There are 4,100+ Walmart stores in USA.
Gee, would've never seen that coming. A lesson to all; this is where political correctness gets you. I hear Subway is hiring...
Walmart has a beautiful huge new-ish store in my hometown in the Midwest - full grocery, nursery, optical, pharmacy, tire/oil change, etc.. Open 24/7. Well-managed, spotless. Only Walmart in a county of 40,000 souls. I don't think this store will be among those closed, but if it is it would be a serious blow to the community. The two other grocery stores will go back to gouging the hell out of everyone. Nearest Kmart, 20 miles away, closed. As did the Target.
Walmart is basically a godsend there.
Here is the list of store closings. Mainly those dinky stores they've opened in recent years.
http://www.app.com/story/money/business/2016/01/15/walmart-store-closing...
WalMart announces 16,000 layoffs today. In roughly 1 month they will announce another round of 16,000, and moar store closings.
Narco Ponzi Casino Crony Capitalism has croaked.
The Mercan hinterland will indeed be a poorer place when this national jewel bellies up not to mention the cultural loss for the protoplasm that wobbles there.
"night john boy"
http://www.peopleofwalmart.com/
They had a good run but society can no longer afford to subsidize Wally.
Close the remainder and mom and pop will sprout.
The vast majority of closures in the US are NEIGHBORHOOD MARKETS and WALMART EXPRESS, whatever those are, NOT full size and super stores.
The list:
http://www.kcci.com/news/walmart-says-its-closing-154-stores-in-usa/3745...
I believe they were trying to take on convenience stores, farmer's markets, and dollars stores with these store concepts.
Their core business is still mainly funded by EBT buyers that's all that matters...
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Welcome to the world of near zero velocity of money.
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V-V
Almost all companies go through this process: first they overexpand, then have to consolidate ops before the business cycle kicks back in.... problem is the Fed et al, have doped up the cycle so much that addiction has kicked in long ago and the 'consolidation' will take much longer than normal.... all before any of the other black swans show up... and they will.... watch out for those swans currently not listed under any 'color' column.
It will be good for local businesses, though.
Damnit, my city only lost two
It is really a conspiracy. They are going to use those shuttered Wally Worlds to engineer a new super race of immigrants...