The New Year is off to a busy start at BJ’s Wholesale Club. Amid ongoing speculation about the retailer being a potential takeover target, BJ’s on Wednesday announced the closure of five clubs, several senior level personnel changes and released its December sales a day earlier than normal.
Same-store sales in December increased 3.8%, or 1.4% excluding the impact of escalating gas prices. The company said sales during the five week period were strong during the early part of the month, but negatively affected by an unspecified amount late in the month when severe winter weather hit the Northeastern U.S. where many of the company’s clubs are concentrated. Aside from that impact, BJ’s said traffic at its clubs increased by about 2% while average transaction sizes were flat.
Going forward, the company’s sales performance will be helped by the elimination of five underperforming clubs that are slated for closure by the end of the month. Three of the clubs are located in Atlanta with the other two in the Charlotte, N.C. and the South Florida community of Sunrise. The company currently operates 194 units.
“The five clubs to be closed have historically underperformed and, after careful consideration, we concluded that improvement of their operating results was unlikely,” said BJ’s CEO Laura Sen.
The club closures come as several executives at the company’s home office retire and others are handed new responsibilities. CFO Frank Forward, who has been with the company since it was founded in 1984, will retire as part of planned succession strategy involving the appoint of SVP and director of finance Robert Eddy being elevated to the role of CFO. In addition, SVP of field operations Cornel Catuna was named EVP of club operations to fill the void created by the retirement of Thomas Gallagher who the company said was leaving for health reasons.
“Frank and Tom have made many important contributions to BJ’s and we truly appreciate their years of service. Thanks to their ability to recruit and mentor successors, they have built strong organization with exception leaders in Bob Eddy and Cornel Catuna,” Sen said.
The changes come amid what has for several years now been periodic speculation that BJ’s was a candidate for a private equity transaction.