Sam's Closes 10 Stores, Cuts 12,700 Jobs

Sam's Club had a busy January operationally, closing 10 underperforming stores, outsourcing in-store sampling activity and eliminating all store-level business membership sales representatives.The moves, which cut approximately 12,700 total positions, are pieces of "a larger strategy focused on driving superior value, growth and improved returns," chief executive officer Brian Cornell said in a company-wide memo posted online. "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."That "larger strategy" was first unveiled last October in a presentation Cornell and other management personnel gave at parent company Walmart's annual investor conference. (See "Sam's Club's New Strategic Focus" in Related Articles.)Closed on Jan. 22 were stores in Nampa, ID; La Quinta, CA; Louisville, CO; Vista, CA; Rolling Meadows, IL; Clay, NY; and Irvine, CA; as well as one each in Houston, Phoenix and Sacramento. The closings eliminated approximately 1,500 positions. Signs in clubs near the shuttered locations (such as Chicago-area sites near Rolling Meadows) welcomed migrating members. (See Image at right.)The chain expected to end fiscal 2010 on Jan. 31 with 598 stores, including six stores opened during the year and the 10 aforementioned closures, according to Cornell. (Additionally, 52 clubs were remodeled during the year.) The plan calls for five to 10 new clubs and the expansion or relocation of 60 to 80 locations in fiscal 2011, he said.Meanwhile, sampling activity was turned over to Shopper Events, Rogers, AR, a company launched in early 2010 specifically to handle Walmart's "Bright Ideas" sampling and demonstration program. (See "Driving Purchase Through ... " in Related Articles.)Dubbed "Tastes and Tips," the Sam's program will encompass "integrated demo stations, signage, uniforms and product selling," Cornell said in a separate company-wide memo announcing the change. "Our demos can be a competitive advantage, and we want to take this member experience to the next level."The change eliminates the approximately 10,000 store-level employees who had handled demonstrations, most of whom were part-timers. Those associates will have an opportunity to apply for positions with Shopper Events, which will hire a similar number of people.As for the decision to drop the roughly two new-membership positions at each club (for a rough total of 1,200), "We have found that we can more effectively drive membership through targeted ... acquisition events and by increasing our Partner Membership Programs," the latter of which works through companies and other organizations to offer employee incentives. In 2009, the retailer used a "100 Days of Summer" campaign as a membership drive. (See "Sam's Club Favors C-Store Owners" in Related Articles.)

Sam's Closes 10 Stores, Cuts 12,700 Jobs

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