Only on CNBC, and in the research rooms of the big banks, could Ivy League analysts have the temerity to spin consumer spending and retail data to be a vision of unicorns and rainbows (and don’t forget the skittles). But for those looking at information at face value, it is impossible to deny that the economy is in recession.
And one of the data points that practically assures this truth is what is happening to retailers just weeks after the end of the Christmas holiday season.
Wal-Mart Stores, Inc. (WMT: NYSE) today announced plans to close 269 stores in the U.S. and globally.
In October 2015, the company said an active review of the portfolio was underway to ensure assets were aligned with strategy. Today’s action follows a thorough review of Walmart’s nearly 11,600 worldwide stores that took into account a number of factors, including financial performance as well as strategic alignment with long-term plans. In total, the impacted stores represent less than 1 percent of both global square footage and revenue.
“Actively managing our portfolio of assets is essential to maintaining a healthy business,” said Doug McMillon, president and CEO, Wal-Mart Stores, Inc. “Closing stores is never an easy decision, but it is necessary to keep the company strong and positioned for the future. It’s important to remember that we’ll open well more than 300 stores around the world next year. So we are committed to growing, but we are being disciplined about it.”
As part of today’s action, the company will close 154 locations in the U.S., including the company’s 102 smallest format stores, Walmart Express, which had been in pilot since 2011. Walmart instead will focus on strengthening Supercenters, optimizing Neighborhood Markets, growing the e-commerce business and expanding Pickup services for customers. Also covered in the closures are 23 Neighborhood Markets, 12 Supercenters, seven stores in Puerto Rico, six discount centers, and four Sam’s Clubs. – Zerohedge
Wal-Mart isn’t the only major retailer to close stores, and layoff workers in the first two weeks of 2016. Almost immediately once January came around, Macy’s announced they were laying off 2500 workers, and closing a number of stores in a ‘re-organization’ move.
All that has been holding back the pure recession call has been the consumer and retail data since the industrial sector has long since capitulated. And no matter how much the Fed raises or lowers rates, and corporations borrow free money to buy back stock, the coiled spring that is the stock and earnings bubble appears now to be showing its true self, and there is plenty of room to go before finding the bottom.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.