Sam’s Club was not among the list of retailers expected to announce store closures after the holidays, but Walmart announced Thursday that it is closing or converting 63 outlets in its chain of warehouse stores.
Locations in St. Louis Park and Moorhead, Minn., will close. Both stores were deleted from the Sam’s Club website by Thursday afternoon. Stores in Madison and West Allis, Wis., are also closing.
Fifty of those stores are expected to close, with 10 or more being converted to distribution centers.
The news came on the same day that Walmart announced it will boost its starting salary for U.S. workers to $11 an hour, expand the parental leave benefit and hand out one-time cash bonuses of up to $1,000. Walmart credited the recently passed tax bill for those moves.
“Tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.,” Walmart Chief Executive Doug McMillon said in a statement.
Reports surfaced Thursday morning that Sam’s Club employees were not informed in advance and found the doors locked when they reported to work. Messages on the phone systems at both the St. Louis Park and Moorhead stores say they are closed Thursday and will reopen Friday.
The stores are expected to stay open for several weeks before closing permanently.
Sam’s Club announced the news on Twitter.
“After a thorough review of our existing portfolio, we decided to close a series of clubs and better align our locations with our strategy. Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.”
Sam’s Club President and CEO John Furner issued a statement saying some locations were in areas that did not experience the population growth that was expected.
“We’ve decided to right-size our fleet and better align our locations with our strategy,” Furner said in the release.
“We will be closing some clubs, and we notified them today. We’ll convert some of them into e-commerce fulfillment centers to better serve the growing number of members shopping with us online and continue scaling the SamsClub.com business.”
Signs of trouble at Sam’s Club have been bubbling up for several years. From 2013 to 2015, Sam’s Clubs generated half as much revenue as Costco, while Costco stores had about 10 percent more selling space.
Sam’s Club regularly offered membership discounts on daily deal sites such as Groupon and Living Social. Although Costco occasionally offered membership deals, Sam’s Club offerings were more frequent.
Sam’s Club has 14 locations in Minnesota. Costco has nine, including a St. Louis Park location less than 3 miles from the Sam’s Club that is closing. In November, Costco opened a new store in Woodbury and will open a business center in Minneapolis this spring.
Sam’s Club has no new stores planned in Minnesota but recently completed a remodeling of the outlet in Woodbury.
As of October, Sam’s Club had 660 stores in the U.S.
The Associated Press contributed to this report.
John Ewoldt • 612-673-7633