Walmart is abruptly closing 63 of its Sam's Club stores, the company told Business Insider. Some locations shut their doors as early as Thursday morning, with some employees finding out about the closures via stores with locked doors.
Notable: The closures came just hours after Walmart announced that it was raising starting wages, giving out one-time bonuses and expanding employee benefits, citing the recent GOP tax cuts.
Walmart announced Thursday that it would be raising the starting wages of full-time employees to $11 per hour starting next month, citing the tax cuts, while also giving employees who don't benefit from the minimum increase one-time bonuses.
The bottom line: All else equal, lower corporate taxes should make corporate investment, be it in higher wages, or building stores, more attractive. But the trend of higher wages in retail is about way more than changes in tax policy.
File storage and sharing company Dropbox has filed confidentially for an IPO, according to Bloomberg. Goldman Sachs and J.P. Morgan are leading the offering.
Why it matters: Dropbox is one of the most-valuable tech companies to remain privately-held, having last raised money at a $10 billion valuation.
Five women have accused actor James Franco of behavior they found "inappropriate or sexually exploitative," reports the Los Angeles Times. The allegations largely stem from interactions at two acting schools, environments in which the women felt Franco could directly help their careers through casting in his own projects.
Why it matters: Franco, who won Best Actor in a Musical or Comedy at Sunday's Golden Globes, came under fire for expressing support for the Time's Up movement amid rumors of his own misconduct.
Walmart is boosting starting wages, providing a one-time bonus for employees and expanding benefits, the company said on Thursday, citing the tax cuts signed into law by President Trump last year. The company is also closing 63 Sam's Club stores, it announced Thursday.
Details: The bonus is based on length of service, with those who've worked 20 years eligible for $1,000. The company, which is the largest private employer in the U.S. and employs roughly 2.2 million people worldwide, is also raising its starting wage to $11 an hour. The current starting wage for store associates is $9 an hour. The company also said it plans to expand its maternity and paternity leave benefits.
Private equity buyouts account for 61% of the jobs lost and planned for elimination in the 2016 and 2017 retail apocalypse, according to a new study.
Quick take: Private equity snapped up retail chains like Sears and Toys 'r Us in more benign times. Amazon wasn't yet such a potent force, and buyout firms like Bain Capital and KKR — bursting with cash from institutional investors seeking high returns — saw strong profit possibilities in retail.
But when buyers massively turned to on-line shopping, many of these now-private equity-owned chains, laden with interest payments on the buyout debt, lacked free cash to pivot and compete, said Thomas Paulson of Inflection Capital Management.
Last week we reported that government data may be seriously understating the scale of e-commerce. Now a paper sent by an FoW reader reinforces the appearance of a hugely underestimated e-commerce sector.
David Evans, chairman of GlobalEconomics Group, and Richard Schmalensee, former dean of MIT's Sloan School of Management, say in their 2016 paper that e-commerce is a third larger than reported by U.S. Census data. By 2016, they said, it had been undercounted for five straight years. The Census Bureau has challenged their data, but they say the larger point still stands.
Three decades after Ronald Reagan broke the air traffic controllers union, organized labor is still trying to regain its footing. Just 10% of American workers belong to unions, half the percentage of the Reagan era.
What's happening: Later this month, the AFL-CIO, the largest U.S. labor group, will convene a closed conference call of the leaders of its 55 associated unions to start figuring out how to climb back, Elizabeth Shuler, the AFL-CIO's secretary-treasurer, tells Axios. Later this year, they will gather in Washington, DC, to advance the process.
Ikea is expanding the number of markets in which it offers online sales, and opening dozens of new, urban small-format stores (roughly 1/4 the size of a typical 80,000 square foot outlets, and which won't feature the company's famous meatball-serving cafeterias).
Why it matters: Ikea CEO Jesper Brodin tells Bloomberg that his company is moving at "revolutionary speed" to adapt to the future of retail. Foot traffic at Ikea stores has been flat for a number of years, suggesting that the rising share of young people — Ikea's key demographic — are choosing to live in urban areas far from a typical Ikea's exurban location.
