story by Kim Souza
ksouza@thecitywire.com
Sam’s Club confirmed last week it was restructuring its in-club operations, trimming 2,300 middle management and hourly job across its U.S. operations.
Wal-Mart Stores Inc. said today (Jan. 31) the costs associated with the Sam’s Club restructure will shave about 1 cent per share from corporate earnings reported Feb. 20. In addition, Sam’s said it will shutter its Mas Club located in Houston on Feb. 7. Mas Club opened as a pilot in 2009 to cater to the merchandising needs of the Hispanic community.
“Since opening Mas Club, we’ve gained insights on the best ways to serve the Hispanic community and have implemented what we’ve learned in our 18 locations in the Houston area and more than 100 other Sam’s Club locations in areas with a predominately Hispanic population throughout the U.S.,” said Carrie Foster, Sam’s Club spokeswoman.
She said all Mas Club members will receive a complimentary membership at Sam’s Club valid for 12 months beyond the expiration of their Mas Club card, while Mas Club members who are already Sam’s Club members will receive a $30 gift card or a full membership refund, whichever they chose.
Retail experts recently interviewed by The City WIre indicated that Sam's Club needed to purge some of the operational bloat that was created during more profitable times.
Sam's Club execs have consistently reported that many of it members – small businesses – continue to struggle, which has compromised comparable sales growth for several quarters. The holiday was apparently no better as Wal-Mart gave lower guidance for itself and Sam's Club today (Jan. 31) partly related to weather.
Analysts continue to point to Costco's ability to outperform other big box retailers and note that they all face similar consumer headwinds on a regular basis.
Carol Spieckerman, CEO of New Market Builders, said Costco has evolved as a brand under the longtime leadership of founder Jim Sinegal who has built a loyal customer base. At the same time, she said Sam's Club is s store.
That said, Spieckerman applauded the recent alliance between Sam's Club and the Walmart.com leadership saying this can give them a competitive advantage over Costco which is still mostly a brick and mortar retailer. She said if Sam's Club can figure out a way to leverage Wal-Mart's physical scale with its online service the possibilities are huge.
"Imagine ordering a bundle of products online at Sam's Club but being able to pick it up at local Walmart Neighborhood Market," Spieckerman said.
Sam's Club operates about 600 clubs, a fraction compared to the more than 4,000 Wal-Mart locations across the U.S.