Walmart is closing 269 underperforming stores in the U.S. and Latin America and cutting around 16,000 jobs as it seeks to strengthen its e-commerce business. The world’s largest retailer broke the news on Friday.
“Actively managing our portfolio of assets is essential to maintaining a healthy business,” Doug McMillon, president and chief executive, stated. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future.”
More than half of the closures are in the U.S., including all 102 of the company’s smaller-format Walmart Express stores, 23 Neighborhood Markets, 12 Supercenters, six discount centers, four Sam’s Club locations and seven stores in Puerto Rico.
Walmart also plans to shut 115 loss-making stores in the Latin American market, including 60 recently-closed locations in Brazil.
Moody’s lead retail analyst Charlie O’Shea described the closings as a “pruning.”
“We continue with our view that the combination of the Neighborhood Market and Supercenter is a powerful strategy in the food sector, with the Neighborhood Markets functioning as key components of Walmart’s multi-channel strategy as they can be utilized as pick-up points for buy-online/pick-up in-store purchases, in addition to being full-line grocery stores,” he said, adding, “The closings in Brazil are a reflection of the difficult macroeconomic environment and to that end we believe make sense.”
Roughly 16,000 associates will be impacted by the move, about 10,000 of whom are in the U.S. The company said that more than 95 percent of the closed stores in the U.S. are within 10 miles of another Walmart and it plans to transfer the affected workers to nearby locations when possible.
“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 also announced plans to open more than 300 stores around the world in the upcoming fiscal year, including as many as 60 Supercenters and up to 95 Neighborhood Markets in the U.S. and between 200 and 240 stores globally.
McMillon added, “So we are committed to growing, but we are being disciplined about it.”
Walmart isn’t the only U.S. retailer that’s announced a string of store closings. Sears Holdings Corp. will shut some Sears and Kmart locations this spring, while seven of J.C. Penney’s 1,020 department stores are set to close their doors by mid-April. Macy’s, meanwhile, is closing 36 stores.
As of Oct. 31, Walmart operated nearly 11,600 stores under 72 banners in 28 countries.