Walmart officials announced on Wednesday that the Homewood store at 17550 Halsted St. will close on March 10 because its financial performance has not met company expectations.
“This decision was not made lightly and was reached only after a thorough review process,” said Felicia McCranie, communications director for Walmart in the North and East U.S. “We have nearly 5,000 stores across the U.S. and unfortunately some do not meet our financial expectations.”
Although theft has been cited as a growing problem for retail businesses, and Walmart CEO Doug McMillon was quoted in December as saying the trend could result in higher prices or store closings, McCranie declined to identify that as a factor in the decision to close the Homewood store.
“Mr. McMillon was asked a question about the broader retail environment and challenges around protecting products for customers,” she said. “There is no single cause for why a store closes and these are never easy decisions. This decision was based on a range of issues concerning financial performance. We have closed a small number of stores annually over the last few years based on factors including current and projected financial performance, location, population, customer needs and the proximity of other nearby stores. This specific store hasn’t performed as well as we hoped.”
On local social media channels Wednesday area residents speculated that Walmart was leaving because financial incentives had expired, but that does not appear to be the case.
The property was once part of a tax increment finance (TIF) district, but the district expired in 2009, so no TIF-generated incentives were available when Walmart opened the Homewood store in October 2016 after closing its store two miles south on Halsted in Glenwood. The company also cited underperformance as the reason for that closure.
The Glenwood store eventually became a U-Haul facility.
Walmart did not receive any sales tax relief, either, although it requested incentives from the village prior to renovating the building. The village board at the time refused to approve any incentives other than a Class 8 property tax relief designation, which included a $4.3 million benefit cap.
The Class 8 designation refers to a Cook County program intended to level the economic development playing field between the South Suburbs, which have high property tax rates, and nearby counties plus including Northwest Indiana, where taxes are much lower.
The designation reduces the property taxes from 25% of assessed valuation to 10% for 12 years. Homewood officials expected the rate to return to 25% sooner than 12 years because Walmart would have had to pay the full rate after reaching the cap.
Homewood Assistant Finance Director Amy Zukowski said the company had received only about half the allotted benefit.
Village officials said without the Class 8 designation the village would have received about $140,000 annually in property tax from Walmart. With the designation, the village received about $56,000 per year.
Homewood officials said they learned that two other Chicagoland stores were being closed, including in Lincolnwood and Plainfield. McCranie indicated there were no plans to announce a closure of the Walmart store in nearby Olympia Fields.
The Homewood store employed 365 workers. They will be able to transfer to other Walmart locations in the area, according to Homewood officials.
The Homewood store will be turned back over to the landlord, McCranie said. When asked whether Walmart will be involved in the future of the building, McCranie said she didn’t know if any discussions had taken place.
The property is owned by Sears Holdings and was a Super K-Mart until that store closed in 2013.