Retail Closings, Layoffs, and Sales: Walmart, Neiman Marcus, Lowe's, Tuesday Morning, and More
A lot has happened in retail so far this February.
We learned January retail sales jumped 3%, Walmart is closing three of its tech hubs, Neiman Marcus Group announced layoffs, Tuesday Morning is closing stores, Lowe's sold its Canadian business, and a possible sale may be in Subway’s future.
With all these strategic shifts impacting — or potentially impacting — the retail workforce, get caught up on the latest below.
[See also: — Special Report: Voices From the Frontline]
Walmart Closing Three Tech Hubs
Earlier this week, reports came out that Walmart is closing three tech offices and operations will move to its remaining tech hubs.
Walmart confirmed to RIS its Global Tech team will no longer operate out of Austin, TX; Carlsbad, CA; and Portland, OR, and offered the below statement:
“The unique culture and values of Walmart are at the core of who we are – to our customers, members, associates and partners. With this in mind, we’ve made the decision to focus our tech team’s presence within select locations. We hope to relocate or allow for remote work for all affected associates.
“Our decision to be together more frequently anchors to Walmart’s fundamental belief that our people make the difference, our culture matters and we build stronger partnerships when we are physically together. With this in mind, we've asked the Global Tech team to plan regular in office days.”
Walmart stressed to RIS that this is just a location strategy, and the company hopes employees choose to relocate. The decision regarding where they relocate is managed individually.
Walmart will begin to require all its technology workers to come into the office at least two days a week, according to the Wall Street Journal, which reviewed a staff memo.
[For more background: Walmart Global Tech Team To Grow 25%]
Tuesday Morning Closing Stores
Off-price retailer Tuesday Morning announced Tuesday it had filed for bankruptcy protection, again. The Dallas, TX-based retailer filed in the Northern District of Texas, Fort Worth Division, and said it plans to focus on optimizing its store footprint and focusing on its core and heritage markets.
The company announced a list of stores closing on its website and stated in a press release that it intends to close stores in low-traffic regions, while allocating the proper resources to remaining stores in high-traffic regions. In addition, Tuesday Morning plans to realize significant cost reductions and new efficiencies across its distribution channels as a result of focusing on a narrower set of high-performing stores. The company said it expects to pivot to a third-party logistics, or 3PL, model and transition to a more cost-effective inventory acquisition strategy for remaining stores.
“After considering how best to address Tuesday Morning’s exceedingly burdensome debt, we have determined that the best path to reorganizing and transforming the Company begins with a Chapter 11 filing,” said CEO and director Andrew Berger. “Fortunately, we have the support of a committed capital provider in Invictus (the retailer obtained a commitment from Invictus Global Management, LLC (to provide $51.5 million of debtor-in-possession financing to support ongoing operations during the proceedings) and a clear vision for transforming into a focused retailer that serves its core, heritage markets in a profitable manner. We look forward to taking steps that enable us to emerge as a stronger retailer that draws on a legacy of offering a unique off-price value proposition to our loyal customer base.”
Neiman Marcus to Lay off Around 5% of Workforce
Neiman Marcus Group (NMG) said on Tuesday it would lay off less than 5% of its workforce across the organization as part of the strategic realignment.
Additionally, an evolved leadership team structure was announced, which moves additional group-level responsibilities for strategic capabilities to each of NMG's brand presidents. The realignment aims at supporting fast decision-making and agility, the company said.
The company has also identified open roles to best support its operating model going forward, which will be filled based on strategic business needs, it said.
As part of the new leadership team structure, Darcy Penick, president, Bergdorf Goodman will assume group-level leadership of the NMG Product & Technology organization. Darcy brings deep leadership experience throughout her career in digital-led customer strategy and a proven history of execution excellence to lead group-level product & technology teams. Ryan Ross, president, Neiman Marcus, will lead Customer Insights for the group. Ryan has deep experience in these areas with previous leadership roles focused on integrated channel strategies and customer migration.
Bob Kupbens, chief product & technology officer, will transition out of the organization after successfully building momentum across the Product, Technology & Analytics organization, enabling the transition of these core capabilities back into the business. His extensive experience in product and technology helped the organization build differentiated strategic capabilities, including the Neiman Marcus app, enabling selling associates to engage with customers in new ways using CONNECT, as well as the acquisition and implementation of Stylyze.
"It is always our intent to minimize the impact to existing associate jobs, and we take these types of decisions very seriously. We will support those associates who will be leaving the company with severance and other benefits," said Geoffroy van Raemdonck, CEO of NMG.
Lowe's Sells its Canadian Retail Business
Earlier this month, Lowe's Cos completed the sale of its Canadian retail business to private equity firm Sycamore Partners to focus on its U.S. business.
Based in Boucherville, Quebec, Lowe's Canadian retail business operates or services approximately 450 corporate and independent affiliate dealer stores in a number of complementary formats under different banners, which include RONA, Lowe's Canada, Réno-Dépôt and Dick's Lumber.
The sale was first announced last November.
"With the closing of this transaction, we are now singularly focused on the transformation of our U.S. home improvement business, where we have a great opportunity to simplify Lowe's operations and take market share," said Marvin R. Ellison, Lowe's chairman, president and CEO. "Our simplified business model will support our efforts to improve operating margin and ROIC, while delivering sustainable value to our shareholders. I would like to extend my appreciation to the entire Canadian team for their commitment to serving our customers, and I wish them the best as they move forward under new ownership."
Subway to Explore Selling the Company
A possible sale may be in Subway’s future.
The company announced Tuesday that its shareholders are exploring a possible sale of the company. J.P. Morgan is advising the company and will conduct the sale exploration process, but the company gave no indication of timing or assurance that a sale will occur.
The restaurant chain said its management team remains committed to the future and will continue to execute against its multi-year transformation journey, which includes a focus on menu innovation, modernization of restaurants and improvements to its overall guest experience.
Kum & Go Reports
Kum & Go LC is reportedly exploring all options for its network of more than 400 convenience stores. These options include a refinancing, real estate leasebacks or other forms of recapitalization as potential alternatives, reported Reuters.
