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BJ's Wholesale Club Closing 3 Metro Atlanta Stores | Business

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BJ's Wholesale Club Closing 3 Metro Atlanta Stores
Business
BJ's Wholesale Club Closing 3 Metro Atlanta Stores

ATLANTA -- BJ's Wholesale Club plans to close five underperforming stores, including three in Atlanta, by the end of the month in a move meant to cut costs and enhance shareholder value, the company said Wednesday.

Set to close in metro Atlanta are stores in Norcross, Powder Springs and McDonough. Staying open are stores in Woodstock, Newnan, Conyers, East Point and Cumming.

Natick, Mass.-based BJ's Wholesale Club, which reportedly is being eyed for a hostile takeover bid, also announced plans to restructure its home office and make several management changes.

About 380 people will lose their jobs at the closed BJ's stores.

In addition to the three Atlanta stores, BJ's is closing stores in Sunrise, Fla. and in Charlotte, N.C.

Laura J. Sen, CEO of BJ's Wholesale Club, said in a statement: "Our management team has been working for several months on a strategic plan to optimize our performance and build for the future, thereby enhancing shareholder value. The five clubs to be closed have historically underperformed and, after careful consideration, we concluded that improvement of their operating results was unlikely. The savings associated with the actions we are announcing today will be invested in new clubs, remodels, and information technology, all of which are vital to our competitiveness, future growth and profitability. We remain committed to the Atlanta, Charlotte and South Florida markets and will look to expand in those markets if compelling opportunities present themselves.

Sen concluded: "In making these very difficult but necessary choices, we eliminated positions held by team members who have contributed to our success. We will be supporting affected team members in many ways to help ease their transition."

The announcmeent comes one week after the New York Post reported B.J.'s is in the sights of a private equity firm that may launch a takeover bid within weeks.

Last week, a spokesperson for BJ's declined to comment on the New York Post report.

BJ's also announced Wednesday that Robert W. Eddy, the firm's senior vice president, director of finance, has been named executive vice president and chief financial officer. Cornel Catuna, senior vice president of field operations, has been named executive vice president of club operations. Those management changes begin Jan. 30.

In conjunction with those management changes, the company also announced the retirements of Frank Forward, executive vice president and chief financial officer, and Thomas F. Gallagher, executive vice president of Club Operations. According to the firm, Forward's retirement is a "planned transition that has been under discussion since 2007, when Mr. Eddy joined the company to help manage the Finance Division. Thomas Gallagher has decided to retire for health reasons," according to the firm.

BJ's estimated that taken together, "the total charges associated with the announcements made today will be between $42 and $44 million after-tax, or $0.78 to $0.82 per share in the fiscal fourth quarter ending January 29, 2011."

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