Wal-Mart Stores Inc. said it will close 48 of its 61 Bud’s Discount City stores and take a fiscal second-quarter pretax charge of $40 million to $50 million.
Wal-Mart said it’s closing the stores because they didn’t meet business objectives.
The Bud’s chain was started in 1990 to occupy Wal-Mart stores that were closed after the company built nearby Wal-Mart supercenters, which include grocery stores.
“We are always trying to figure out how to do things differently and build a better mousetrap, and this was an experiment that didn’t meet our objectives,” said Steve Hunter, a Wal-Mart spokesman.
Bentonville, Ark.-based Wal-Mart said it is comfortable with analysts’ estimates for the quarter ended July 31. The company is expected to earn 35 cents a share, the average estimate of 23 analysts polled by I/B/E/S International Inc.
Most of the Bud’s stores were located in the southeastern U.S. Most of the 1,000 to 1,500 employees at the stores scheduled to be closed will be offered jobs within the company.
