Sam’s Club Cuts Jobs; Stock Price Rises
In another anomaly that just freezes my mind, WalMart has decided to close their Sam’s Club outlets across the country, which is going to eliminate nearly 11,000 jobs. At the same time that’s happening, their stock price actually went up .2%.
If you believe WalMart, they’re not actually shedding jobs, at least not all of them. Supposedly, what they’re doing is bringing on another company to handle some of their product demonstrations in their warehouses, a company named Shopper Events. That company has stated that they will hire most of the people were being laid off, or at least that all those people can apply for the jobs because they may need most of them to fill a role. For some reason it just doesn’t seem viable, but I guess we’ll have to see as time goes on if that actually happens. Walmart also stated that most of the jobs being cut are part time.
I have to admit that I am not a Sam’s Club member, preferring instead to go to BJ’s Warehouse. I did belong to the club for one year, and only went the one time. I can’t exactly say why I wouldn’t go back, and my wife has tried to tell me that her friends tell her they have some products that we might like that are different, but I just wasn’t in the mood.
Sam’s Club has always been one of the lower performing divisions of WalMart. They’ve tried hard to compete against BJ’s in the northeast and Costco’s out west, without much success. Strangely enough, Costco’s stock price also went up after this news, while BJ’s price went down. Some analysts said that it was a good move for WalMart to take on, which probably explains why their price went up.
They will also be cutting positions geared towards offering businesses discounted rates to join Sam’s Club. I’m not sure what that means except maybe they’ve made a determination that business memberships just aren’t profitable, even if they offer the possibility of having more members. That doesn’t sound like the best business move in my mind, but if it works out for them fine.