Walmart To Close 269 Stores

[JANASENA]

 

 

Walmart (WMT) will close 269 stores around the world in a strategic move to focus more on its supercenters and e-commerce business, the company said Friday.

The closures include 154 U.S. locations, encompassing Walmart's entire fleet of 102 "Express" format stores, its smallest locations meant to compete with dollar stores, which have been in pilot testing since 2011. Some supercenters, Sam's Clublocations and Neighborhood Markets will also close, plus 115 stores in Latin American markets. The closures were decided based on financial performance and how well the locations fit with Walmart's broader strategy, says Greg Hitt, a company spokesman.

 

Walmart has been working aggressively to grow its e-commerce presence and digital services, plus upgrade stores and provide shoppers with a more pleasant experience. In that vein, the company has also been making a big push to increase wages and provide more training to employees, an effort that's costing more than $1 billion.

 

The store closures, which represent less than 1% of global revenue from Walmart's nearly 11,600 stores worldwide, will allow the retailer to step up its digital and in-store initiatives, Hitt says.

 

In a statement, Walmart CEO Doug McMillon said the company is "committed to growing, but we are being disciplined about it." Walmart plans to open more than 300 stores in the coming fiscal year.

 

Given the company's scale, the store closures won't have a huge impact on the business, says Brian Yarbrough, consumer staples analyst with Edward Jones, adding that the move also opens up the opportunity for dollar stores to regain market share as they'll no longer compete against Walmart's Express stores.

 

"In the grand scheme of things and as far as being material to the financial results, this means nothing," he says. Although Yarbrough says it could spell more store closures in the future as Walmart re-evaluates its physical footprint in a Web-centric market.

 

In addition to its supercenters and e-commerce initiatives, Walmart also plans to invest more in its Neighborhood Market format, smaller stores that are around 38,000 square feet and concentrated in fresh grocery items and pharmacy services, plus expand in-store pick-up services for online orders.

 

Around 16,000 store associates are affected by the store closures, with about 10,000 in the U.S. Some will have the opportunity to relocate to other Walmart stores. The rest will receive 60 days pay plus severance if eligible, the company said.

 

The news comes as other retailers have announced store closures recently in order to stay competitive in a changing retail landscape. Finish Line said last week that it would close 150 stores after reporting a third-quarter loss. Macy's also said last week that it plans to close 36 stores and eliminate more than 4,500 positions in a bid to become a more nimble business.

[VenkatD]

Recession started antava uncle

[JANASENA]

Recession started antava uncle

 

NO :)

 

WASHINGTON — Last week’s harrowing plunge in U.S. stocks — fueled by economic fears about China and plummeting oil prices — left investors anxious and alarmed. Some wondered if it signaled an approaching recession in the United States.

The answer, most analysts say, is no.

The American economy is expected to prove resilient and nimble enough to avoid serious damage, at least anytime soon. For all the economy’s challenges, the job market is strong, home sales are solid and cheaper gasoline has allowed consumers to spend more on cars, restaurants and online shopping.

The companies that make up major stock indexes are far more vulnerable than the economy itself is to distress abroad: Companies in the Standard & Poor’s 500 index derived 48 percent of their revenue from abroad in 2014, up from 43 percent in 2003.

 

The S&P 500 sank 2.2 percent Friday and has tumbled 8 percent since the year began, deflated by expectations of even lower oil prices and fears that China’s once-explosive economy is slowing more than anyone had expected. On Friday, the Xinhua news agency reported that Chinese banks reduced loans last month from a year earlier.

It was the latest sign that China’s economy continues to decelerate — an ominous trend for U.S. companies, such as heavy-equipment maker Caterpillar, that have significant business there. (Caterpillar shares shed 2.7 percent Friday.)

“For many of these companies, the narrative behind their growth and earnings prospects is China,” said Mark Zandi, chief economist at Moody’s Analytics. “If you throw that narrative out, investors get nervous.”

A disconnect

The disconnect between the actual economy and the price of stocks isn’t new. From the waning days of the Great Recession into the tepid recovery that followed, stocks managed to gradually rise despite persistently high unemployment and tepid economic growth. Now, the opposite seems true.

“Main Street is better, and Wall Street is suffering,” said Jim Paulsen, chief investment strategist at Wells Capital.

The job market appears particularly robust. Employers added an average of 221,000 jobs a month during 2015 and 284,000 a month from October through December. The unemployment rate has sunk from 10 percent in 2009 to 5 percent, a level associated with a healthy economy.

Improved job security — layoffs have slowed to exceptionally low levels — has helped embolden many Americans to shop. Consumer spending, which drives about 70 percent of U.S. economic activity, rose at an annual rate of more than 3 percent in the spring and summer. Auto sales hit a record last year.

Not that the U.S. economy has been left unscathed by the weakness abroad. Partly because a stronger dollar has made their goods more expensive abroad, U.S. manufacturers are suffering.

Industrial production fell in December for a third straight month, the government said, and orders to factories dropped in November for the third time in four months. Last year, factories added just 30,000 jobs, the fewest since the recession year of 2009.

What’s more, energy companies are reeling from sharply lower oil prices. And though falling oil prices have helped boost consumers’ spirits and encourage spending, they also helped slow the overall economy last year by prompting energy companies to slash investment.

In addition, the Federal Reserve has signaled that it expects to further boost interest rates this year after raising them from record lows in December, and some fear it will move too fast. Fed hikes were considered a trigger for three of the last four recessions.

Global economic links

Economists don’t entirely understand the links among the world’s major economies. The International Monetary Fund has acknowledged surprise over just how much China’s slowdown has hurt other countries in the developing world.

It’s also possible that damage to the United States could prove worse than direct trade ties suggest.

Wells Capital’s Paulsen notes that small- and medium-sized U.S. companies supply the multinationals that do big business overseas. When exports falter, those companies can suffer in ways that don’t show up in trade numbers.

Tumbling stock markets themselves can also cause economic damage, by making Americans who have money tied up in stocks feel poorer and less inclined to spend.

A month ago, Joel Naroff, president of Naroff Economic Advisors, predicted that the U.S. economy would grow 3 percent this year. Now he’s considering cutting his forecast. He’s not worried about the impact of economic weakness overseas. He’s worried about the toll that falling stocks may take on consumer confidence.

Still, he doesn’t think a recession is coming, no matter how scary the stock plunge of late.

As famed economist Paul Samuelson once quipped, the stock market has forecast “nine of the last five recessions.”

[adwitiya_original]

Oh dear

[TOM_BHAYYA]

Opening 350 new stores too :)