Sam's Club is shutting down 63 stores, and some employees and customers say it did so without warning.
In a press release issued Thursday evening, Walmart (WMT), which owns Sam's Club, said 12 of the 63 locations will be converted into fulfillment centers. The move reduces the number of Sam's Club locations in the United States to 597.
Walmart spokesperson Greg Hitt estimated that roughly 9,450 people are employed across the 63 stores.
Workers and customers learned about the store closures on the same day Walmart drew praise from the White House for raising pay and giving out worker bonuses because of the new lower corporate tax rate.
Early in the day, news broke about the sudden shutdown of an unspecified number of Sam's Club locations. Sam's Club, using its official Twitter account, at first said that 53 locations were being shut, and 10 would be converted into fulfillment centers.
Those figures were later revised in the Walmart press release.
Throughout the day, customers took to social media with questions about why their local Sam's Club stores were closing. Some demanded refunds for their Sam's Club memberships, which cost between $45 and $100 a year. Sam's Club replied to some questions with a brief statement.
"After a thorough review of our existing portfolio, we've decided to close a series of clubs and better align our locations with our strategy," Sam's Club wrote in one reply. "Closing clubs is never easy and we're committed to working with impacted members and associates through this transition."
Sam's Club shutdown? Employees at this S Loop store tell me they showed up to work and were told store is closed effective today. Sign on door says same thing. Hearing other stores also affected. Waiting on answers from parent company, Walmart #khou11 pic.twitter.com/RtbY7EhiIK — Jason Miles (@JMilesKHOU) January 11, 2018
The company also said via Twitter that pharmacies at Sam's Club locations will remain open for "at least two weeks" while the company works to transfer prescriptions and contact customers.
In the press release, Walmart said it will offer "support and resources to those associates who are affected, including the bonus announced today and 60 days of pay, as well as severance to those eligible."
Related: Walmart is raising its minimum wage and handing out tax cut bonuses
The federal Worker Adjustment and Retraining Notification Act requires big employers to give workers 60 days notice before closing a plant or issuing mass layoffs.
Sam's Club posted one such alert, referred to as a WARN notice, to the Indiana state government's website. That notice says three locations in the state were slated to be closed on January 26. The move will impact 419 employees.
Several other states where CNNMoney confirmed stores will be closing did not have such notices posted as of Thursday afternoon.
Hitt, the Walmart spokesperson, told CNNMoney that he was unfamiliar with exactly where Walmart issued WARN notices. But he said the company would have issued them "where appropriate."
Throughout the day, local news outlets across the country -- including from Houston, Syracuse, Baton Rouge and Dallas -- reported that closures happened without notice. Some reported that bewildered employees showed up to work to find out they no longer had a job.
Alex Corona -- who has worked in the tire department at a Sam's Club in Wheeling, Illinois for six years -- told CNNMoney he walked into work Thursday to find the door guarded by two security guards with a sign saying the store was closed.
Eventually, a manager vouched that he was an associate and he was allowed inside, Corona said. He said he and his coworkers were told by a representative from Sam's Club's corporate office that their store was closing. Employees were offered severance based on how long they had been employed at the store, or the opportunity to transfer to a nearby location, Corona said.
For his part, Corona, who made $12 per hour at Sam's Club, said he's not looking to transfer.
"I don't want to deal with Sam's Club," he said. "What they're doing is absolutely wrong."
Corona said he will still be working at the store until it closes on January 26, a requirement to receive his severance.
Hitt declined to provide a list of addresses for the 63 Sam's Clubs locations that will be shut down.
Thirty-nine stores called by CNNMoney had recorded messages saying the store was closed Thursday but would reopen Friday.
When asked about this message, Hitt confirmed stores were shut down for one day so that management could inform employees about the decision to close the location -- but the "majority" will reopen Friday to begin liquidation sales.
Nine stores said they were closed effective Thursday, and two more said they would close January 26.
Related: All the companies giving out raises and bonuses because of tax reform
Later -- when asked about Walmart's double-barreled decision to raise wages but close Sam's Club stores -- White House press secretary Sarah Sanders praised the company.
"They raised minimum wage," Sanders told reporters at a press briefing. "They are increasing salaries to over a million American workers. We think that's a positive."
Treasury Secretary Stephen Mnuchin also thanked Walmart for raising wages and pointed to the move as evidence that the new Republican tax law is good for American workers. The law, which passed before the New Year, offers companies a drastic tax cut by bringing the corporate rate down to 21% from 35%.
Several companies besides Walmart have announced wage hikes or one-time bonuses for workers, citing the tax cut as the incentive.
When asked about the workers who will lose their jobs as a result of the Sam's Club closures, however, Mnuchin responded: "Different companies will do different things. Some companies will invest capital, some companies will return money to workers. Lots of things are going on in the economy, and we appreciate what Walmart is doing.
--CNNMoney's Chris Isidore, Kathryn Vasel, Jill Disis and David Goldman contributed to this report.
The Latest on Walmart's decision to boost starting salaries for U.S. workers while also closing dozens of Sam's Club stores around the country (all times local):
3 p.m.
A Walmart official says the company is closing 63 Sam's Club stores across the country. About 10 of those stores will be repurposed into e-commerce distribution sites.
The official said at least eight stores closed Thursday and the rest would shutter in the coming weeks. The official spoke on condition of anonymity because he was not authorized to discuss details of the decision publicly.
The closures came on the same day that Walmart announced it would boost its starting salary for U.S. workers to $11 an hour and hand out one-time cash bonuses.
The Walmart official said it would too soon to know how many jobs would be eliminated with the Sam's Club closures. He said some employees would be re-hired at other Walmart locations or at the newly created e-commerce distribution sites.
———
8:14 a.m.
Walmart is boosting its starting salary for U.S. workers to $11 an hour, giving a one-time $1,000 cash bonus to eligible employees and expanding its maternity and parental leave benefits.
The retailer said Thursday changes that to its compensation and benefits policy will impact more than a million hourly workers in the U.S., with the wage increase effective next month.
The company is also creating a new benefit to assist employees with adoption expenses.
CLOSE Walmart has announced it is raising its starting hourly wage from $9 to $11 and Sam's Club is set to close a series of clubs across the United States. USA TODAY
Sam's Club is closing 63 locations. (Photo: Dan MacMedan, USA TODAY)
Sam's Club, the membership warehouse owned by retail giant Walmart, is shutting down or converting 63 stores.
The company attributed the decision to the need to better fulfill online orders, less population growth than expected in some markets and too many competing locations.
The Sam's Club closures were confirmed the same day Walmart said it would lift the hourly minimum wage in the U.S. to $11 and give out bonuses of up to $1,000.
Of the Sam's Club locations, about 50 will be going out of business for good. Roughly 10 of those locations are closing their doors as of Thursday, while the remainder will be shuttered over the next three to four weeks.
More: See if your Sam's Club closing. Here's the list
More: Walmart boosts minimum wage to $11, hands out bonuses up to $1,000 for hourly workers
More: Retail outlook: Will 2018 be Walmart's best year yet?
About 10 to 12 of the stores are slated to be closed temporarily as the retailer converts them to regional distributional centers to help fulfill online purchases. Workers previously employed at those sites are not guaranteed one of the new positions.
Walmart piloted delivering groceries right into customers' refrigerators, one of the creative ideas retailers rolled out in 2017. (Photo: SAUL LOEB, AFP/Getty Images)
In a note to staff, Sam's Club President and CEO John Furner said that a review found stores that were hindering business at other locations or operating in areas that had not seen the population growth that was expected.
"We’ve decided to right-size our fleet and better align our locations with our strategy,'' he wrote. "We will be closing some clubs, and we notified them today. We’ll convert some of them into eCommerce fulfillment centers — to better serve the growing number of members shopping with us online and continue scaling the SamsClub.com business.''
News of the closures began to slowly trickle out Thursday. Notices filed with the Indiana Department of Workforce Development revealed that three Sam's Club stores in Indiana would be shutting down, while news outlets across the U.S. began reporting possible closures in cities from Memphis to Atlanta to Houston.
CLOSE Walmart is doing what their competitor Amazon can't do, throw holiday parties. Buzz60
The company would not provide a list of the specific locations that will be closed or the number of employees that would be impacted, but public filings examined by USA TODAY revealed that at least 3,802 workers will be affected.
There are 419 employees at the three Indiana locations, according to filings required by the U.S. Department of Labor when there are significant layoffs.
Public filings also revealed locations in other parts of the U.S. that would be shutting their doors. In Illinois, seven Sam's Clubs employing 1,138 people were slated to close Jan. 26, The notifications said that the termination of hourly workers would be effective as of March 16, and for managers as of April 13.
In Louisiana, a Sam's Club in Baton Rouge that employs 176 workers was scheduled to close Thursday, with hourly staff being terminated as of March 16 and managers as of April 13. Ohio has two stores closing in Cincinnati and Loveland, with a total of 285 workers potentially affected. Their date to be laid off, according to the public notifications, is March 16.
In Texas, four stores employing 633 workers will shut, with three closing Thursday and another in San Antonio being shuttered Jan. 26. Four stores in California that employ 656 people will close their doors Jan. 26, and another 495 workers at three stores in Washington will also be out of work.
Furner said that the company would try "to place as many associates as possible in new roles at nearby locations.''
The retail landscape has been upended by the rise of Amazon and the growing shift by consumers to shopping online. Though warehouse-based retailers such as Sam's Club and Costco have a steady revenue stream fueled by member fees, they are also having to adjust to an environment in which customers can buy groceries, electronics and other products from a growing array of e-commerce and stores.
While Walmart reported that Sam's Club's sales rose 4.4% in the most recently completed quarter, Furner says that the store closures will free up resources that can be focused on bolstering Sam's Club's website as well as its in-store technology. There are also plans to improve the club's fresh-food offerings, overall product selection and its private label, Member's Mark.
Rival Costco has experienced significant online sales growth in the wake of improvements to its site, the launch of two new delivery options and the introduction of an option for shoppers to buy items such as computers and jewelry online and then pick them up at a store. Last month, Costco reported that its online sales had leaped 43.5% in the most recent quarter.
Meanwhile, BJ's, a membership warehouse club concentrated in the East, says it is benefiting from the Sam's Club closures. "We’ve had an immediate increase in Sam’s Club members joining BJ’s Wholesale Club,'' the company said in a statement, adding that it's also gotten queries from Sam's Club workers.
"BJ’s Wholesale Club is hiring.''
Contributing: Kevin McCoy, USA TODAY and Justin L. Mack, Indy Star
Read or Share this story: https://usat.ly/2D5TSlD
CLOSE Walmart has announced it is raising its starting hourly wage from $9 to $11 and Sam's Club is set to close a series of clubs across the United States. USA TODAY
Closed signs and security personnel greeted customers at Sam's Club located at 3015 W. 86th St. in Indianapolis, on Jan. 11, 2017. Sam's Club will be closing three stores in Indiana, including two in Indianapolis. (Photo: Michelle Pemberton/IndyStar)
Soon, Sam is going to have less of a club.
With Sam's Club closing 63 stores, the big membership warehouse chain run by Walmart is going to face some big changes. Illinois loses six.
The closings fall across many states, but they hit some harder than others. Alaska, for instance, loses three Sam's Club stores while far more populous Tennessee loses only one.
More: Sam's Club closing dozens of stores; some being converted to distribution centers
More: 'Beyond recognizable': Southern California can't catch a break
More: Walmart raises minimum wage, announces layoffs
Here's a list of the stores closing around the country:
Alabama
3900 Grants Mill Rd, Irondale, AL 35210
Alaska
8801 Old Seward Hwy, Anchorage, AK 99515
1074 N Muldoon Rd, Anchorage, AK 99504
48 College Rd, Fairbanks, AK 99701
Arizona
2425 E Florence Blvd, Casa Grande, AZ 85194
5757 E State Route 69, Prescott Valley, AZ 86314
California
17835 Gale Ave, City of Industry, CA 91748
12540 Beach Blvd, Stanton, CA 90680
Connecticut
2 Boston Post Rd, Orange, CT 06477
69 Pavilions Dr, Manchester, CT 06042
Florida
5135 S Dale Mabry Hwy, Tampa, FL 33611
355 FL-436, Fern Park, FL 32730
Georgia
2994 Turner Hill Rd, Lithonia, GA 30038
6600 44th Ave, Moline, IL 61265
Illinois
460 S Weber Rd, Romeoville, IL 60446
808 S Illinois Rte 59, Naperville, IL 60540
501 N Randall Rd, Batavia, IL 60510
21430 S Cicero Ave, Matteson, IL 60443
900 S Barrington Rd, Streamwood, IL 60107
1055 McHenry Rd, Wheeling, IL 60090
Indiana
3015 W 86th St, Indianapolis, IN 46268
10859 E Washington St, Indianapolis, IN 46229
4024 Elkhart Rd #1, Goshen, IN 46526
Louisiana
9598 Cortana Pl, Baton Rouge, LA 70815
Maryland
9750 Reisterstown Rd, Owings Mills, MD 21117
Michigan
340 E Edgewood Blvd, Lansing, MI 48911
Minnesota
2800 27th Ave S, Moorhead, MN 56560
3745 Louisiana Ave S, St Louis Park, MN 55426
New Hampshire
200 John E Devine Dr, Manchester, NH 03103
New Jersey
81 International Dr S, Budd Lake, NJ 07828
1900 E Linden Ave, Linden, NJ 07036
New York
720 Fairmount Ave, Jamestown, NY 14701
2649 Erie Blvd E, Syracuse, NY 13224
700 Elmridge Center Dr, Rochester, NY 14626
1600 Marketplace Dr, Rochester, NY 14623
North Carolina
5085 Dawn Dr, Lumberton, NC 28360
Ohio
9570 Fields Ertel Rd, Loveland, OH 45140
4825 Marburg Ave, Cincinnati, OH 45209
Tennessee
1805 Getwell Rd, Memphis, TN 38111
Texas
1615 S Loop W, Houston, TX 77054
13331 Westheimer Rd, Houston, TX 77077
22296 Market Place Dr, New Caney, TX 77357
12919 San Pedro Ave., San Antonio TX 78216
Virginia
741 E Little Creek Rd, Norfolk, VA 23518
4571 S Laburnum Ave, Richmond, VA 23231
Washington
901 S Grady Way, Renton, WA 98057
1101 Outlet Collection Way, Auburn, WA 98001
13550 Aurora Ave N, Seattle, WA 98133
Wisconsin
1540 S 108th St, West Allis, WI 53214
7050 Watts Rd, Madison, WI 53719
Read or Share this story: https://usat.ly/2D3GPRj
