News of the closings caught consumers by surprise and came on the same day Walmart touted wage hikes for workers.

(Bloomberg)—On the same day that Wal-Mart Stores Inc. boosted its starting pay to $11 an hour, it said it was closing a series of Sam’s Club warehouse locations.

The Business Insider website reported that Sam’s was closing 63 locations, citing an unnamed company official. A Sam’s Club spokeswoman didn’t respond to several calls and emails requesting details on the closures, which spanned from Seattle to Atlanta, according to local news reports and state WARN notices about displaced workers.

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A spokesperson told CNBC that 10 to 12 of the closed stores could be converted to e-commerce facilities. The news is consistent with ongoing plans by Sam’s Club to optimize its stores to fulfill more online orders and keep pace with internet retailers such as Boxed Wholesale, No. 326 in the Internet Retailer 2017 Top 500.

The move came after a review of the chain, reflecting that cost cutting will remain a key focus for the world’s biggest retailer—even as it gives workers a raise.

“After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy,” Sam’s Club said in a Twitter post, adding that it’s working with affected employees.

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Founded in 1983, the chain had 660 locations as of October and employs about 100,000 in the U.S., according to its website. It accounts for about 13% of Walmart’s total revenue. Walmart is No. 3 in the Top 500.

Shares of rival Costco Wholesale Corp. (No. 9), whose locations tend to be in more affluent areas, rose about 2% on the news.

 

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