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Sam’s Club locations in Orange and Manchester to close as part nationwide cutback in stores

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A sign on the door of the Orange Sam’s Club on Thursday.
A sign on the door of the Orange Sam’s Club on Thursday.Jessica Lerner / Hearst Connecticut Media

ORANGE — More than 300 people will lose their jobs — and some area warehouse-club members potentially left in the lurch — when the Sam’s Club stores in Orange and Manchester close their doors Jan. 26.

Shoppers were confused Thursday morning when they arrived at the Sam’s Club on Boston Post Road to find it closed — and then said they were angry and felt betrayed after learning the wholesale warehouse would be closing permanently later this month without any notice.

Officials with Sam’s Club told the Connecticut Department of Labor Thursday they will close the warehouse club in those two locations later this month, in a move that will leave 306 people out of work.

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The Orange store, which is located 2 Boston Post Road, employs 155 people, with the remainder of workers based out of the Manchester store, according to notice filed with the state Labor Department. State officials have not been notified of any plans to close the Newington location of Sam’s Club.

Both the Orange and Manchester stores were closed Thursday as officials with the Bentonville, Arkansas, company, which is a subsidiary of retail giant Walmart, notified the workers of their fate.

Hourly workers at the Manchester and Orange locations will leave the company’s payroll on March 16, while the management team at both locations have until April 13. The Connecticut closings are part of a nationwide plan to close approximately 63 stores, according to Business Insider, a move that likely will result in the elimination of more than 11,000 jobs nationwide.

Company officials were not immediately available for comment, but the Sam’s Club Twitter account offered up a brief statement.

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“After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy,” the retailer’s Twitter account said Thursday afternoon. “Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.”

All the employees who lose their jobs will have the opportunity to apply for open positions at other Sam’s Clubs or Walmart facilities, according to a required WARN Notice notice sent to the state Department of Labor and the Orange first selectman’s office.

The Sam’s Club closing are part of a seismic shift in the retail business driven by large numbers of consumers choosing to purchase goods online rather than go to bricks-and-mortar locations, according to Donald Klepper-Smith chief economist and director of research for New Haven-based DataCore Partners.

“The retail industry is as dynamic as I’ve ever seen and I don’t necessarily mean that in a good way,” Klepper-Smith said.

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David Cadden, a professor emeritus at Quinnipiac University's School of Business, said he was surprised by the closing. Cadden said warehouse clubs, along with luxury goods retailers, have been among the top performers in the retail business.

Sam’s Club is a members-only warehouse chain that sells groceries, electronics and home goods. It competes against Costco and BJ’s Wholesale Club, both of which are doing well, even in a tough retail environment, he said.

Cadden said the closings could be for strategic reasons.

“Walmart has been fairly aggressive in acquiring e-commerce companies as it looks to compete with Amazon,” he said. “So it could be a move to free up some cash to make further acquisitions.”

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Another possibility, he said, is that Walmart could be seeking to avoid a showdown with the U.S. Justice Department over future anti-trust concerns the agency might have.

Customers who drove to Sam’s Club at 2 Boston Post Road Thursday found the store had closed without any notice. Customers who spoke to the New Haven Register said they felt betrayed and angry.

Within just a few minutes of shocked employees learning the news, word of the closings was quickly posted on Facebook, where customers expressed concern over membership fee refunds, especially for those who recently bought or renewed memberships.

Carlos Ibarra of West Haven said he was upset by the prospect of the Orange store closing permanently. Having just renewed his membership, he feels the store should have sent a letter or something similar in advance to let people know.

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Loren Scarinzi of Orange was surprised by the news, saying the store is always open. She renewed her membership in December.

“I’m upset because that was $100, and [my husband and I] are moving, so we thought we would continue our membership in another state,” she said.

Shoppers were not allowed in the Orange store Thursday — except to the pharmacy, to which they were escorted by a guard. One shopper said employees throughout the store were crying and said they had no idea about the closing.

One man, who did not want to identify himself, said his daughter works at the cafe in the Orange store, and he was speechless when she sent him a message saying the store was closing. The cafe was not open Thursday, he said.

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“I live right here,” he said. “This is my favorite store. I feel betrayed. ... How do you treat your customers like that?”

Shaun Masslieno of Stamford said he has worked for Sam’s Club for about two years and said he is now feeling stressed about having to find a new job in just a few weeks.

“[But] there’s nothing I can do about it,” he said.

Orange First Selectman Jim Zeoli said on Facebook that he has heard from many people who are unhappy about the closing.

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“The Big Box stores that were the demise of many small stores years ago are now feeling their own demise by online shopping,” he wrote. “I was told they are closing stores across the country. I had heard a few weeks ago that Walmart’s biggest fear was Amazon.”

In an email, Zeoli said the closing is “a tragedy for all the employees that need jobs.”

“I am a member there and will be forced to go elsewhere also,” Zeoli wrote.

Walmart on Thursday announced it is boosting its starting salary for employees to $11 an hour and handing out one-time cash bonuses, according to The Associated Press. Walmart says the wage increase benefits all hourly U.S. workers within its stores, including Sam’s Club, its website and logistics department, according to the AP.

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One man outside the Orange store Thursday morning said he doesn’t believe it was a coincidence that the announcement of Sam’s Club closures and Walmart’s increase in its employees’ starting salary happened on the same day. As a former Walmart employee, he said, “It sounds like a Walmart deal.”

But both Cadden and Klepper-Smith said it is unlikely that the news about the increase in wages and benefits was a significant factor in the Sam’s Club closings.

“Quite frankly, it was something that was overdue in order for them (Walmart) to compete for the best employees,” Cadden said. “They were losing workers to Costco and BJ’s. And Walmart was seeing significant turnover levels and a rise in absentee rates.”

Klepper-Smith said the decision by Sam’s Club to close two Connecticut stores is indicative of the difficulties the state’s economy is having.

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“Connecticut has more people leaving the state than it is seeing moving in,” he said, adding that 428 people are moving out of the state each week. “What’s going on in retail right now is a shell game with retailers moving to where they think there consumers will be in the future, not where they are today.”

Cadden said the closing of big box stores is problematic for Connecticut and other states where the economy is sluggish. Commercial landlords who are unwilling to subdivide big-box stores into smaller spaces are finding that their stores are remaining vacant, sometimes for years, he said

“They really need to do whatever it takes to find new tenants, even if it means carving up the stores into smaller spaces,” Cadden said. “The longer one of these large space remains vacant, the less likely consumers are to seek the shopping center as whole as being a vibrant space. It’s like the spread of gangrene.”

Other retailers are looking to reduce their space levels. Cadden used Kohl’s as an example, saying the Wisconsin-based department store chain is looking to sublease some of the space in its larger stores to other retailers that might bring in more customers traffic, such as grocery store chains.

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Klepper-Smith said one-stop shopping is becoming even more important to retailers who chose to keep their brick-and-mortar stores open.

As he made the comment, the economist was shopping in a Florida Walmart that he described as “bigger then anything I’ve ever seen.”

“It has a full grocery store and climate-controlled pods where people can pick-up what they’ve ordered from Walmart online,” Klepper-Smith said. “They have a drive-through pharmacy and huge amounts of parking. But the grocery business is the key, because if you don’t have what the consumer wants, they’re going to go elsewhere.”

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Luther Turmelle is a business reporter with Hearst Connecticut Media Group. Turmelle has covered the towns of Cheshire and Wallingford and he specializes in the utility and energy beats. A graduate of Boston University, Turmelle has held multiple leadership roles in the Society of Professional Journalists, including two terms on the organization's national Board of Directors.