Sam's Club to Close 10 Stores, Lay Off 1,500 Workers

Daily Finance ^ | January 12, 2010 | Bruce Watson

[2ndDivisionVet]

In a move that indicates consumers may be worse off than the economic pundits think, Sam's Club, the discount warehouse chain owned by Wal-Mart (WMT), is closing 10 U.S. locations and cutting 1,500 jobs.

"Despite the outstanding efforts of Sam's Club Associates, these Clubs continued to lose money and we have decided to close them," wrote Sam's Club president and CEO Brian Cornell in a memo to employees Monday.

Almost half of the closures will occur on the west coast. In addition to California locations in La Quinta, Vista, Irvine, and Sacramento, stores in Nampa, Idaho; Louisville, Colo.; Rolling Meadows, Ill.; Clay, NY; Houston and Phoenix will also be shuttered. Trying to position these closures as a strategic cost-saving move, Cornell emphasized that the chain will have opened six stores by the end of its fiscal year and finished the remodeling of 52 others. He also announced plans to open five to ten more stores and remodel between 60 and 80 locations in fiscal year 2011.

Sam's Club will host job fairs at all ten locations to help displaced workers find jobs at other Sam's Club and Walmart stores. The company has also offered to refund membership fees in areas where stores are being closed and is trying to steer customers to other store locations. The move is bound to affect revenues in locales where stores are shuttered: in the Louisville area, city officials anticipate that the shuttering warehouse club will cost the area more than $500,000, totaling approximately 5% of the city's general fund revenue.

Major layoffs like the one Sam's Club is embarking on have filled the news lately. In the past week, Lockheed Martin (LMT) announced it was dropping 1,200 workers and United Parcel Service (UPS) said it would let 1,800 people go. DailyFinance's parent Aol (AOL) has also been streamlining its workforce, with the aim of cutting as many as 2,500 jobs.

Still, there remains a key difference between Sam's Club and the other companies that are clearing the decks. Throughout the recession, the conventional wisdom has held that the retail slowdown was, to some extent, reflective of a consumer move from high-end to low-end stores. No longer able to justify expensive "aspirational" purchases, customers chose instead to patronize bargain-priced stores. In general, Walmart and Sam's Club were perceived to be the winner in this trend, as their business model was designed to appeal to lower- and middle-income families. But these closures, and the dropping revenue that has inspired them, represents a worrisome trend: after all, if the stores that are best situated to ride out a recession can't keep their heads above water, then the future looks bleak for more upscale establishments.

[kcvl]

No shoplifter is going to be stupid enough to put his stolen goods in a cart and try to walk out the door.

Do you want to bet? They do it everyday. Crack heads, thieves and welfare queens aren't exactly the smartest knives in the drawer.

Have you ever seen a fat lady try to hide a ham under her skirt or a carton of beer? Yes, they do that too.

[kcvl]

And they don’t take bank cards, either.

They do here.

[Nailbiter]

Have no source on this, but Walmart will not open store on South side of chicago, due to demands of unions of no payola to local alder creatures.
Therefore those who will benefit most will not benefit at all.
Hopey and changey for all

[JDoutrider]

Sam’s Club cannot compete with Costco for either selection or value. It’s not even close.

Absolutely concur! The Sam's I joined, as there IS no Costco/whatever around my new locale, won't even put your bought items into your cart! The selection is terrible, and the workers rude... worst investment I've made in many a moon!

[dstarr]

I am an employee of Sam’s Club. I’ll take exception with your seeming assessment of all Sam’s employees. Your attitude seems to match that of the weekend shoppers that we get - bent out of shape.

You have no idea how hard it is to keep the work of the theives at bay. They will take an inexpensive item out of a box and insert something of a higher dollar value that they can then sell on the street or take to a pawn shop. They will then put the box in their cart and head for the register. That is why the person at the register has to lift the package or box. They are mentally assessing if it seems to weigh what it should.

There are those magnetic things at the receiving doors so let me tell you things are not going out the back door. Those magnetic things put the incoming items into inventory. I would assume that they can also subtract as when merchandise is shipped to other stores.

If what they are trying to do keeps the prices down, then so be it.

[dstarr]

I don’t think they take MC but they do take Visa. They also take Discover. They do this at the one I work at.

[DollyCali]

of course the libs are saying all this is the result of GWB 43’s “work” during his 2 terms. Obama has kept it as good as it is.

barf

[giotto]

Costco does this too. I always assumed it is done to make sure all your paid-for items are in the cart. I once bought a huge cartfull of stuff at Costco, and the basket checker discovered that a shirt I had paid for was not in the cart. I was impressed that he could have found one item missing, without even taking anything out of the basket.

[cva66snipe]

I think within a decade likely less unless they do some major changes Walmart will be the next K-mart. I have never seen a chain try so hard to put itself out of business and anger customers. It's not the store workers or even the store managers the problem is in Bentonville.

The newer Super Stores are pathetic. Walamrt has gone on an inventory reduction on time deliver kick that is leaving shelves empty of high demand quick turn over items. It's not even on time delivery any more as the item may be out of stock a week. Not having items like Penzoil 10/30 is crazy. It's loss of sale. Worse thing is they don't care.

I've seen in my area an overall general decline in the Walmarts and they can't blame it on COSTCO here because there aren't any and Wally has no real competitor except K-mart and Target.

Used to Walmart was a one stop store for about anything you needed in the way of food, heath and hygiene, electronics, pet food, crafts, hardware, etc. All these departments in the last couple of years have been greatly reduced and many items discontinued. Walmart even on 12 packs of Cokes is usually higher than many local grocery stores.

The store managers know the problem but are powerless to do anything about it. Whoever the brain was behind the Super Store overhauls needs to be fired. The smaller Walmarts fair a little better and prices are somewhat cheaper there.

The Walmart new "GREEN" policy stinks as well. Like putting in skylights in parts of the country where partly cloudy is the usually daily weather. Now you see, now you don't, now you see, now you don't, as each cloud rolls by.

Walmart is not the place for outdoor power equipment either. A read of a popular article "The man who said no to Walmart" is very informative as to the quality you get and I'd say such items as TV's etc are no different. I'd love to see another Big Box Store move into East Tennessee and force Walmart to either get their act together again or be ran out.

One last thing near and dear to many people was Layaway. Layaway was replaced with Wally Credit. Many used layaway to avoid going in debt and it could not have possibly been a loser for Walmart when they had trailer loads of goods placed in there for things like Christmas. Some used it to buy more expensive items like TV or school clothes. Like I said it seems Walmart corporate management in Bentonville is trying it's best to loose it's customer base. Maybe someone in here can shine some light as to what changed a few years ago in Bentonville?

[gura]

You really don’t see the difference between a roadblock on a public street and what you see as obnoxious policies in a private business?

One tramples your rights, the other doesn’t.

[SamAdams76]

Well I guess I understand where you are coming from but there's got to be a better way to deter shoplifters than treating all the customers like potential crooks.

All my life I've been law-abiding. The biggest trouble I've ever been in with the law was going over the speed limit once in a while or forgetting to feed a parking meter. So I do tend to get a little worked up when I diligently pay for my purchases at the register only to get waylaid on my way out the door by some employee demanding to see my receipt and then checking to make sure I'm not trying to sneak anything out of the building.

With video surveillance and RFID technology being so cheap, wouldn't it make better sense to go that route?

[Patrsup]

Well - My wife has a Sams club membership - I have a free Costco membership - I HATE going into Sams (Full Disclosure - my brother has worked at Sams for over 30 years).

The Sams is dimly lit compared to the Costco - the people working there seem less helpful, the lines at checkout are miserable, the whole place is just very trashy. The aisles are narrow - its just a bad experience for me - my wife on the other hand doesn’t mind at all.

Both places have the exit checker - I’m not much on it and from what I hear from my brother - they don’t prevent much stuff from disappearing....

[old and tired]

I don't know anything about Sam's Clubs since I've never been inside one, but we've belonged to both BJ's and Costco for years. They both check receipts against carts upon exiting, sometimes more closely than others. I don't have a problem with it. It's not like they're asking me to empty my pockets or my credit card number is on the receipt.

[WVKayaker]

No shoplifter is going to be stupid enough to put his stolen goods in a cart and try to walk out the door.

Having managed a large retail operation, I can assure you of your ignorance. I've had it tried, and tried, and tried. There is usually more shrinkage among employees, however. Lowes and Home Depot are hard hit by thieves who do exactly that. Look at their security measures next time in there. You can't go out easily.

As for their not taking bank cards, that is partially true. They take bank DEBIT cards, but only Amex CREDIT cards. Credit card fees are enormous expenses, and detract from an already slim bottom line. These stores also charge a membership fee, and everybody is aware of the door checks up front. The option is to go elsewhere and pay more.

Foolish to think that good economic applications for security and profits are infringement on personal rights or other than basic capitalism. There's lots of options available.

You're welcome to open your own operations and try to compete on your terms They'll clean your clock!

.

[dstarr]

Look at this way. They do it to everyone. It is an equal opportunity thing. I work there and have no heartburn over it. It is probably more cost effective to pay someone to stand there checking receipts than to put those little magnetic things into items and then having to reshrinkwrap them.

Having worked retail for more years than I care to think about, there are many people who will take anything that isn’t nailed down. Heck, they rip open bags of candy back on the candy aisles and grab out what they want and then go on. I’ve even seen a case of some kind of cold coffee drink with one missing out of the case where someone ripped the plastic and snagged themselves a drink.

I help watch our DVD aisle. There are fools who used to stick them into a box of pampers and go right on out with them. We were losing thousands of dollars a month just in DVDs. What stopped it was putting one or two people watching that aisle all the time. Most people are used to us being there and it doesn’t seem to bother them. At least if someone has a question, we are right there to help them whether it’s about DVDs or something else.

[truthandlife]

Mr. Gibbs: "More good news economically. Sam's Club just shut down 10 stores. This shows you that the American economy is recovering. Americans are not shopping for discounts anymore. They want to pay retail price and go to a store where they pay retail. Those 1,500 workers will be working at retail jobs in no time and won't have to work in the poor working conditions of warehouses. We are well on the economic recovery trail thanks to President Obama."

[beaversmom]

Well after having just witnessed two women, not together BTW, pulling fast ones at a local Wal-Mart, I wish they would be a little more suspicious too. The amount of thievery at these stores is mind boggling.

[beaversmom]

Heck, they rip open bags of candy back on the candy aisles and grab out what they want and then go on.

I see this ALL the time. I don't even work at Wal-Mart or Sam's but I do shop there. I see it with toys, milk, pampers, bags of chips, drinks, candy--you name it. I see the evidence ALL the time. Some people think they are entitled to FREEBIES. I have my suspicions (some of it seen with my own eyes) about who the biggest culprits are--at least in my area. I was told in one local Wal-Mart they don't even have security any more.

[calex59]

Every thing you point out here is the way the Costco stores in my area used to operate. I don’s shop at Costco any more so they may have changed things a bit. BTW, Wal-Mart used to use the guy at the door to check your cart but in my area people complained so much about it that they stopped doing it.