SAO PAULO (Reuters) - Wal-Mart Stores Inc (WMT.N) is considering closing about 30 stores and renting some of its property in Brazil next year, Brazilian newspaper Valor Econômico reported on Wednesday, as the world’s largest retailer looks to exit poor-performing markets.
Wal-Mart declined to comment directly about store closings, telling Reuters it is “constantly reviewing its portfolio and making decisions based on what’s best for the business and clients.” Valor did not identify the source of its story.
Two months ago Chief Executive Officer Doug McMillon pledged to review Wal-Mart’s global store base to eliminate underperforming units. It has begun selling noncore businesses in Latin America, including property in Chile and a restaurant chain in Mexico.
If implemented, the decision could shutter about 5 percent of Brazil’s current store base in Brazil, the newspaper noted. Wal-Mart has 588 stores in the country, it said on its website.
Wal Mart is also considering leasing part of some stores to home furnishings retailers in several regions across Brazil to generate additional revenue, Valor said.
Lagging behind rivals Casino Guichard Perrachon & Cie’s GPA SA (PCAR4.SA) and Carrefour SA (CARR.PA) in Brazil, Latin America’s largest economy, Wal-Mart has over the past four years cut prices that along with rising wage and operating costs have eroded profitability, analysts said.
Net sales in Brazil fell 0.4 percent in the third quarter, below the performance of GPA and Carrefour, Valor reported, adding that sales at stores open at least a year fell 0.6 percent in the period.
Wal Mart rose 0.6 percent in New York to $60.94.
Reporting by Guillermo Parra-Bernal; Editing by Jeffrey Benkoe