Sam's Club President and CEO Brian Cornell announced the closure of 10 financially underperforming Sam's Club locations in the United States -- part of the company's strategy to leverage expenses and drive member value -- in a memo to Sam's U.S. associates.
As you all know, our business model is built on making the best choices for our members, while providing more value for their dollars than anyone else. A key part of our commitment is keeping our operating costs low, and passing these savings on to members who are counting on us now more than ever.
In reviewing our current business performance, we have made the difficult decision to close 10 Clubs. Despite the outstanding efforts of our Associates, these Clubs continued to lose money and we have decided to close them.
The impacted Clubs are located in Nampa, ID; La Quinta, CA; Louisville, CO; Vista, CA; Rolling Meadows, IL; Clay, NY; Irvine, CA; and one Club in the Houston, TX, Phoenix, AZ, and Sacramento, CA markets.
Approximately 1,500 Sam’s Associates will be impacted as a result of the closures. We do not make these decisions lightly, and are doing all we can to make the transition for impacted Associates as smooth as possible. In addition to providing severance pay and benefits for eligible Associates, we are working to find employment opportunities at other Sam’s Club locations or Walmart stores and will hold job fairs at each location to help Associates learn about potential openings.
The Club closures are one piece of a larger strategy focused on driving superior value, growth and improved returns. We remain committed to opening and operating the best Clubs in the warehouse industry, in the right sizes and formats, in locations that make the best use of our capital. We’re continuing to identify opportunities for growth, and increasing our investment in remodeling to improve operating productivity and efficiency.
By the end of this fiscal year, we’ll have added 6 Clubs and completed 52 remodels. In fiscal year 2011, we plan to add between five and 10 new, expanded or relocated Clubs and remodel between 60 and 80 Clubs.
We’re confident we have the right strategy in place to ensure we run a high performance business, one that is even more competitive going forward. Our dedicated and talented Associates continue to drive this strategy and our success. Thank you for all you do for our members and for each other.
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