Sam's Club consolidates membership structure, offers free shipping

FILE PHOTO - A employee walks by a meat cooler in the grocery section of a Sam's Club during a media tour in Bentonville, Arkansas, U.S. on June 5, 2014. REUTERS/Rick Wilking/File Photo

(Reuters) - Warehouse chain Sam's Club, a unit of Walmart Inc, said on Wednesday it will consolidate its membership structure for customers and improve its e-commerce offerings by adding free shipping and opening more e-commerce warehouses this year.

The company last month shut 63 stores, or about 1/10th of its total, and laid off nearly 10,000 workers after a review of profitability. The layoffs were the largest since the first Sam's Club opened in 1983.

The moves are a part of a strategic shift by Sam's new chief executive, John Furner, as he attempts to turn around a business that has underperformed its parent Walmart and rivals like Costco Wholesale Corp.

"We are creating a new Sam's Club for our members," Furner said on a media conference call.

"We are adding more value to our membership, we're making strategic choices and changing how we work to drive visible growth," he said.

Sam's Club will now offer two membership options, down from three earlier. They will be offered as Sam's Club for $45 a year and Sam's Plus for $100 a year.

The company will offer free shipping on 95 percent of the items it sells online, with no minimum order size for Sam's Plus members, Jamie Iannone, chief executive of SamsClub.com, said on the conference call.

The retailer, which currently relies on Walmart's supply chain network to make online order deliveries, recently said it will open its own first e-commerce fulfillment center in Memphis, Tennessee, and expects to ship its first package in the spring.

It is also considering other regions, like Texas, Central Florida, Southern California, the Chicago area, the Mid-Atlantic and the Northeast, for new e-commerce warehouses.

(Reporting by Nandita Bose in Boca Raton, Florida; Editing by Leslie Adler)

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