Costco Wholesale Corp
The retailer said it expected no layoffs as a result of the Kirkland, Washington, and Tempe, Arizona, store closings, adding that there would be no significant impact on operations or financial results. Its shares were up more than 3 percent in morning trading.
The current economic slowdown and resulting weakness in the home furnishings business in particular have led us to conclude that the single-format Costco Home concept does not fit into our long-term expansion plans, Costco Chief Executive Jim Sinegal said in a statement on Thursday.
The slowdown in consumer spending has hurt sales at higher-end stores. Top home-improvement retailer Home Depot Inc
Retail consultant Retail Forward and PricewaterhouseCoopers released a study last week that predicted retail sales growth would be flat this year as job losses, tighter credit and a weak housing market have consumers continuing with conservative shopping habits.
Costco, the No. 1 U.S. warehouse club, said last month that its February sales at clubs open at least a year, or same-store sales, fell 3 percent, more than the 2.7 percent decline analysts had been expecting.
Costco's shares were up $1.67, or 3.6 percent, at $48.01 on Nasdaq.
(Additional reporting by Ajay Kamalakaran in Bangalore; Editing by Maureen Bavdek)