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The Honolulu Advertiser

Posted on: Saturday, November 13, 2004

Lagging sales cost workers' jobs

By Sean Hao
Advertiser Staff Writer

Wal-Mart Stores Inc. yesterday distanced itself from the troubles of its Ke'eaumoku neighbor Sam's Club, which this week announced the layoff of 90 workers because of a lack of sales.

Even though sales at the Ke'eaumoku Wal-Mart have been "very strong," its upstairs neighbor, Sam's Club, announced 90 layoffs on Thursday. Part of the difficulty may be the warehouse club's second-floor location, which some shoppers may find inconvenient.

Jeff Widener • The Honolulu Advertiser

"From the time we opened our doors a month ago sales have been very strong," said Wal-Mart spokeswoman Cynthia Lin. "As we head into the holiday season we expect sales to continue to ramp up."

One floor higher at Wal-Mart subsidiary Sam's Club a different story is apparently taking place. Late Thursday the warehouse store announced the elimination of 90 out of 400 jobs because sales have not met expectations. The store opened its doors in October.

Fifteen Sam's Club workers slated to lose their jobs already have transferred to open positions at Wal-Mart, Lin said yesterday. Those losing their jobs can apply for more than 75 additional openings at the adjoining Wal-Mart and the Pearl City Sam's Club, she added. The layoffs were pegged to an inaccurate sales projection and a lack of consumer familiarity with Sam's Club.

"It's just beginning to build its business," Lin said. "We do believe as people become more familiar with what Sam's Club offers, that business will build over time."

Concerns about the viability of the new 150,000-square-foot Sam's Club store aren't new. In 2001, when Wal-Mart's first attempt to buy the "Ke'eaumoku superblock" near Ala Moana Center fell through, a representative of property owner Wichman Family Trust said Sam's Club expressed concern over sales projections.

Part of the difficulty with the new Sam's Club may be its upper-story location. The store is on top of Wal-Mart with direct access from the third level of the adjoining parking garage or an entrance ramp from the first floor. Sam's Club shoppers not parked on the third floor must move their purchased goods between floors of the four-level garage.

"Traditionally, it is difficult when you're on a second floor," said local retail consultant Stephany Sofos. "The bottom line is when you're dealing with shoppers today, it's all about convenience.

"If it's the least bit difficult, people won't do it."

Despite Sam's Club's initial difficulties the location of the store still has several advantages, including its proximity to Ala Moana Center and Ross Stores, along with ample parking, Sofos said.

Even though Sam's Club is a division of Wal-Mart, Sam's Club workers seeking Wal-Mart jobs must re-apply. That allows Sam's Club workers to seek different positions than they hold, Lin said. She could not say whether Sam's Club workers would get any preferential treatment over other applicants.

David Engle, who said he was fired by the Ke'eaumoku Sam's Club for falling short of membership sales goals, said laid-off workers shouldn't hold out hope for a Wal-Mart job.

"They need to get on with their lives and get a new job," said Engle, who left a job as a full-time cook to join Sam's Club this fall. Engle said he returned to Zippy's as a part-time cook after failing to land a job at Wal-Mart.

"I thought I had a good job and that I could go a long way with the company," Engle said of Sam's Club.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.