retail news in context, analysis with attitude

BJ’s Wholesale Club announced yesterday that it will close five stores that it described as “underperforming” - three in Atlanta, one in Florida and one in North Carolina - and will restructure its home and field operations, creating eventual savings that it said would be “invested in new clubs, remodels, and information technology, all of which are vital to our competitiveness, future growth and profitability.”

The closures are expected to eliminate some 500 jobs throughout the company, including more than 60 at its Natick, Massachusetts, headquarters.

BJ’s also announced that it has named Robert W. Eddy (currently, Senior Vice President, Director of Finance) to the position of Executive Vice President and Chief Financial Officer; and Cornel Catuna (currently, Senior Vice President of Field Operations) to Executive Vice President of Club Operations.

The company also announced the retirement of Frank Forward, Executive Vice President and Chief Financial Officer since 1997, and Thomas F. Gallagher, Executive Vice President of Club Operations since 2007. The company said that “Forward’s retirement is part of a planned transition underway since 2007; and Gallagher is retiring for health reasons. Forward, who has been with BJ’s since its founding in 1984, will continue to advise and counsel senior management as a consultant.”
KC's View:
The general speculation seems to be that BJ’s management is cleaning up the deadwood and positioning itself for a sale, with current management hoping to convince new ownership that it can make the tough decisions necessary to make the company viable and sustainable. All of which seems logical ... and the expectation here is that we’ll be hearing more big news from BJ’s in the near future.

The question that needs to be asked is why BJ’s has not been as successful as Costco and Sam’s as navigating the recessionary waters. It is interesting to note that as BJ’s restructures, Sam’s is announcing a new health-oriented initiative and Costco is saying its December same-store sales were up six percent.

BJ’s management may be good at bailing out a sinking ship ... but new ownership may want to ask why the ship hit the iceberg to begin with. (Okay, this metaphor may overstate the company’s problems a bit...but you get my point.)