Walmart Inc (NYSE:WMT) has said it will close four of its eight stores in Chicago as it continues to bleed millions of dollars a year from its locations in the third biggest US city.
Collectively, its Chicago stores have not been profitable since it opened the first one nearly 17 years ago, the retail giant said in a statement.
“These stores lose tens of millions of dollars a year, and their annual losses nearly doubled in just the last five years,” Walmart said. “The remaining four Chicago stores continue to face the same business difficulties, but we think this decision gives us the best chance to help keep them open and serving the community.”
The retailer said it has, over the years, tried many different strategies to improve the business performance of these locations, including building smaller stores, localizing product assortment, and offering services beyond traditional retail. It noted that it has invested hundreds of millions of dollars in the city, including $70 million in the last couple of years to upgrade its stores and build two new Walmart Health facilities and a Walmart Academy training center.
“It was hoped that these investments would help improve our stores’ performance,” Walmart added. “Unfortunately, these efforts have not materially improved the fundamental business challenges our stores are facing.”
Walmart said all associates working in the affected stores are eligible to transfer to another Walmart location and it is working with local leaders to help find reuse options for the buildings, including the Walmart Academy which it intends to donate to the Chatham community.
Pharmacies at the affected locations will remain open to serve patients for up to 30 days, it added.
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