sam's club to close doors in ontario

From Globe and Mail

Wal-Mart Canada Corp. is revoking Ontario's membership in Sam's Club.

The Canadian arm of international retailer Wal-Mart Stores Inc. yesterday announced plans to close its six Ontario Sam's Club locations, as the company shifts its focus to expanding and increasing the number of Wal-Mart Supercentre locations.

As part of that strategy, the company unveiled plans to launch 26 new Supercentres across the country this year - including expansions of 20 existing Wal-Marts, two relocations and four new stores, bringing its Canadian footprint to 316 stores by the end of 2009.

"Despite our best efforts and the commendable work of our Sam's Club associates, our six clubs have not met our expectations," Wal-Mart Canada president and chief executive officer David Cheesewright said in a statement.
Print Edition - Section Front

Home improvement giant Lowe's Cos. Inc. is in discussions to purchase five of the six Sam's Clubs sites. A spokeswoman for the North Carolina chain said it is evaluating those sites as well as several others in Canada.

About 1,200 Sam's Club employees will lose their jobs as a result of the Ontario closings, which include stores in four locations in the Greater Toronto Area (Pickering, Etobicoke, Richmond Hill and Vaughan) as well as outlets in London, and Cambridge, the only one not in Lowe's sights.

The company plans to hold a series of internal job fairs to try to place the employees at some of its nearby existing Wal-Marts.

"We're very optimistic that we'll be able to connect them to job opportunities in those stores in the short term, and then the Supercentres, when they come on line, will create a whole host of job opportunities for people," said Wal-Mart Canada vice-president of corporate affairs Andrew Pelletier.

Arkansas-based Wal-Mart introduced the first of its members-only Sam's Clubs - which tended to include a focus on higher-end merchandise and big-ticket items such as furniture and appliances - in 2003, but was unable to gain serious traction against its chief competitor, Costco Wholesale Corp.

"I think it's probably been a decision in the offing for some time [for Wal-Mart] and it may be a sign that the company has found success with its Supercentre expansion that it believes should push in that direction, and call it a day on a failed enterprise with Sam's Club," said David Hartley, a retail analyst at BMO Nesbitt Burns.

Wal-Mart operates Sam's Clubs throughout the United States, and also in Mexico, Brazil, Puerto Rico and China, but Mr. Pelletier declined to comment on why Canadians failed to embrace the format.

"We all know that retail is a constantly evolving business and this is more a matter of us wanting to focus our business on where the most success and the most customer response is," Mr. Pelletier said. "And that is clearly on growing our food business and the overall Supercentre format."

Wal-Mart expects its Supercentre expansions to create 5,000 new store jobs as well as 5,000 construction jobs.