‘Better Late Than Never’ (Gwen Moritz Editor’s Note)

Wal-Mart’s recent announcement that it will promptly close 269 stores, including all 102 experimental Walmart Express locations, was big news. Practically every news organization, including this one, reported it — as we should. Eleven of the stores to be closed are in Arkansas: 10 Express stores scattered around the state and a Neighborhood Market in Maumelle.

Reactions were swift.

“[B]etter late than never,” said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting and investment banking firm in New York, who had previously criticized Wal-Mart as “too big to manage.”

Shutting down stores shows “good management,” he said, “because what this shows is you’re dealing with your problems.”

What’s more, the hard decision will almost certainly improve profitability. “It’s almost automatic when you close weak stores you allocate inventory more effectively. Your inventory turnover goes up; your margin goes up.”

But not all comments come from people as knowledgeable as Davidowitz.

“From all the Mom and Pop stores you put out of business. How does Karma feel?” a reader using the screen name michellehb commented on ArkansasBusiness.com.

That’s a sentiment I hear all the time, and I’m always reminded that Wal-Mart started as a mom-and-pop store by an entrepreneur who thought he had a better idea. Independently owned stores were definitely good for their owners, but employees generally were not well paid, nor did they have particularly good benefits, nor were there prospects for advancement with the same company.

Those mom-and-pop stores must not have been particularly good for consumers either, because when they had a chance to vote with their dollars, Wal-Mart won. There are independent retailers that have competed with Wal-Mart very well, but they have to compete on something besides price and commodity goods. No retailer — not Wal-Mart and not mom and pop — has a birthright to a profitable market.

“This is what happens when career minimum wagers start whining for more money. Nice job Morons,” another ArkansasBusiness.com reader, Quiet4us2, wrote.

Yes, Wal-Mart has raised wages for low-level workers, and that has been an undeniable factor in the retailer’s lower profits, lower projected profits and lower stock price. But the 269 stores being closed represent 2.3 percent of all Wal-Mart stores and — because so many of them are small-format stores in the first place — less than 1 percent of revenue.

At the same time, Wal-Mart plans to open even more stores — at least 115 domestically and 200 internationally — in the coming year, and the company has not backed off its commitment to try to improve its workforce by paying more.

See, despite the widespread reporting, Wal-Mart (the corporate name is hyphenated, store names are not) has merely done what every business does routinely. It evaluated different lines of business and pulled the plug on those that didn’t make sense.

Sixty stores closed in Brazil were described as “loss-making,” which is much more serious than producing a lower profit because of voluntary increases in expenses. The company said little about the Express experiment, except that it has been “in pilot since 2011.” For any other company, 102 stores would be a full-bore, no-turning-back business commitment, but this is Wal-Mart.

Your company probably makes decisions that affect the top line by 1 percent at least once a year — maybe once a month. What’s more, your business has probably ended up paying more in salaries than its owners or stockholders really want to in order to get better employees. Most companies just don’t have to announce these things publicly as Wal-Mart does.

Curiously, Quiet4us2 blames low-wage workers for a decision made by very well-paid corporate executives. If he were right that higher wages are the reason for all these closures — and he’s not — then who is the moron?

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Some of the very small towns that had Walmart Express locations are being left with no general retail stores. This could be more than an inconvenience in some cases, and that does concern me because not all residents of small towns have the capacity to shop online.

Some of those markets could be profitable for someone else — Wal-Mart did not say that all of the Express stores were “loss-making.”

Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com.