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While the Sam’s Club in Norfolk is slated to close, the Newport News Sam’s Club will continue operating, a Wal-Mart spokesman said.
Sam’s Club — a division of Walmart Stores Inc. — is closing two membership-based club stores in Virginia — the Norfolk store and one in Richmond, Walmart spokesman Phillip Keene. The Norfolk store at 741 E. Little Creek Road is expected to close by Jan. 26.
Sam’s Club announced Thursday it would close 63 club stores with 12 of them converting to e-commerce fulfillment centers. After the closures, the company will operate 597 clubs.
About 140 employees in Norfolk are affected, according to a layoff notice online with the Virginia Employment Commission.
Walmart is paying affected employees for 60 days to provide time for them to transfer to other Sam’s Club or Walmart stores, Keene said. The company will pay severance to those who are eligible.
“We want to try and transfer as many people as we can,” Keene said.
The company closed specific clubs for a variety of reasons, including financial performance, Keene said.
The announcement came the same day Walmart announced plans to increase its starting wage rate for all U.S. hourly workers to $11, taking effect in February. Walmart also plans to expand maternity and parental leave benefits.
The retail giant said it plans to provide eligible workers, including those affected by Sam’s Club closures, with a one-time cash bonus up to $1,000. The one-time bonus will be given to Walmart employees who won’t receive a pay raise, according to the Associated Press.
Walmart is a large employer in the region with six Supercenter stores and three Neighborhood Markets across the Peninsula and Gloucester. On average, a Supercenter employs about 300 workers, a Sam’s Club employs 150 workers and a Neighborhood Market’s employs about 95, Keene said. The average numbers include salary, hourly, full-time and part-time workers.
Plans for a Sam’s Club at the Marquis development in upper York County near Water Country USA had been in the works in 2015 through 2017, but York County Economic Development director Jim Noel said Friday he didn’t have an update from the company.
Walmart President and CEO Doug McMillon said tax reform, which included lowering the corporate tax rate, is helping the company invest in better wages, among other potential investments.
Because of the tightening of the labor market, Walmart is facing competition for workers, said Bob McNab, director of the Dragas Center for Economic Analysis and Policy at Old Dominion University. Walmart would have needed to raise wages to compete and tax reform just enabled the retailer to do so more quickly, he added.
In terms of the Sam’s Club closures, McNab said it’s more of the Amazon effect where the business is facing online competition in addition to brick-and-mortar competition from rival Costco and others.
“We’re continuing to see retailers right-size their portfolios to match market demand,” McNab said.