Wal-Mart to shut down its outlet in Hangzhou

Chinese workers clean the outer wall of a Wal-Mart supermarket in Fuzhou city, East China's Fujian province, Feb 21, 2014. Wal-Mart, the world's largest retailer by revenue, decided to shut down more than 20 outlets in China this year.[Photo/dfic.cn]

Closing part of company's plan to jettison underperforming stores

Wal-Mart Stores Inc, the world's largest retailer by revenue, plans to shut down another underperforming store－in Hangzhou, Zhejiang province－in late April, while a compensation dispute with employees from an inland store that closed in March remains unsolved.

Hu Yinghua, a saleswoman at Wal-Mart's Zhaohui store in Hangzhou, said they had a meeting on Wednesday afternoon as a formal notice of the closing of the store by the end of this month.

"The informal notification came on Tuesday night via text message. We have to choose before April 23 whether to be sent to other Wal-Mart stores in the city, or leave the company with a certain amount of compensation," she said.

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Hu said upper-level managers explained during the meeting that the closure was strategically necessary.

There were a few customers at the store on Wednesday, but some shelves were already empty.

Shirley Zhang, media director from Wal-Mart China's Department of Corporate Affairs, confirmed that the store will close on April 23 as a part of the company's plan of shutting down those failing to make a profit.

The multinational company has opened about 400 stores on the Chinese mainland since it entered the market in the mid-1990s. The company decided to shut down more than 20 outlets in China this year because those stores comprise about 9 percent of the total, but have contributed only 2 to 3 percent of the total sales volume from 2013 to date, she said.

"We take these moves to achieve quality of growth, and we think the strategy adjustment will help us to better meet the demands of customers," she said.

Zhang said the company has tried to make proper arrangements for the employees affected by the closures, including allowing them to transfer to any outlet in China and subsidizing their relocation expenses, including transportation and accommodations.

However, the company's retreat from Changde was not seen as reasonable or fair by most of its local employees. More than 70 out of 135 employees from the store have asked their trade union to seek better compensation from the company after Wal-Mart told the workers on March 5 that the store would be closed in two weeks.

Huang Xingguo, chairman of the Changde store's trade union, said Wal-Mart did not provide an official notification to the trade union in advance for such a vital decision as the law stipulates and failed to show due respect to its employees.