Wal-Mart is just the latest chain to announce store closures after the retail industry struggled through the holiday season. The stores will close January 28th.
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Most of the departments shutting down in the US were part of the “Walmart Express” pilot program, which was an unexpected failure, according to TIME.
The closures are part of a total 269 store closures that include four Sam’s Clubs, 12 Supercenters, and 115 stores internationally.
The company further said that approximately 16,000 associates or employees would be impacted by the decision, about 10,000 of them in the United States but would be compensated.
Wal-Mart is abandoning the 102-location Walmart Express, its smallest store format that it’s been piloting since 2011 to compete with dollar stores. Wal-Mart will be offering 60 days’ pay to affected employees in the USA, and a severance package for those who are eligible.
Walmart has been working aggressively to grow its e-commerce presence and digital services, plus upgrade stores and provide shoppers with a more pleasant experience.
It wasn’t immediately known if the closures will affect plans to build a new Walmart in Desert Hot Springs, though the company said it plans to open more than 300 stores worldwide in the coming fiscal year, which starts February 1. The remainder of the stores being closed overseas are also located in Latin America and, like the stores being closed in Brazil, are described by the company as losing money.
“Actively managing our portfolio of assets is essential to maintaining a healthy business”, Wal-Mart CEO Doug McMillon said in a news release Friday.
“It’s good to see that management is willing to close stores because in the past we haven’t had that”, Brian Yarbrough, consumer analyst for Edward Jones, told the Wall Street Journal.
Nick said Express stores typically employ about 15 associates and the company will work to transfer as many associates possible to surrounding stores. The stores account for a fraction of the retail giant’s 11,000 stores worldwide and less than 1 percent of its global revenue.
The company said their objective is to help their associates find another job.
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While a person identified as a manager at the Gray Court location directed all questions to Wal-Mart corporate communications, they said in a phone call that employees were still being notified of the impending closure as of Friday afternoon.
