Wal-Mart to close 269 stores as it retools fleet
18.01.2016 320 views
Wal-Mart said Friday it will close 269 stores across the globe, including 154 in the U.S. The world's largest retailer also will open as many as 405 stores globally in the coming fiscal year, as it shifts its focus toward Supercenters and Neighborhood Markets in profitable locations.
In all, 16,000 employees will be impacted by the store closings, about 10,000 of whom are in the U.S. What's Wal-Mart's stock doing now?
Stifel Nicolaus analyst David Schick told investors that Wal-Mart's thoughtful review of its real estate portfolio is evidence it's undergone an "evolution" in its approach toward physical stores, as it aims to reposition the business longer term.
"Net net, we like these developments and see them as part of increasing focus on quality (versus quantity) of Wal-Mart operations," Schick said.
"Although the extent of the store closures, which amount to fewer than 1 percent of Wal-Mart's global store footprint, should not be overplayed, they represent a change in focus for the world's largest retailer," said Neil Saunders, CEO of Conlumino retail research firm.
"It is notable that Walmart has opted to shutter all 102 of what was once called its Express format stores. While this store type is aligned with the trend of shopping more locally, it has faced stiff competition from the rise and rapid growth of dollar stores."
Wal-Mart CEO Doug McMillon told analysts in October that the retailer would be evaluating its store portfolio.
"No doubt our business has become both large and broad. It is more important now than ever that we evaluate our portfolio," he said. "We have closed stores across several markets and we will continue reviewing our fleet in a disciplined way."
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