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Wal-Mart home remodels in question

Bentonville, Ark. – Wal-Mart admitted the remaining home department revamp projects under its current remodel/special projects plan are “a little bit up in the air right now” in terms of completion, because of the costly, cumbersome, and lengthy conversion process.

Tom Schoewe, evp and cfo, said during the retailer’s presentation at the Bear, Stearns 13th Annual Retail, Restaurants and Consumers Conference today that these home division remodels “are so invasive in the store.”

He added: “They take up to twice as long as some of the other special projects. They are expensive and destructive to the store.” He said Wal-Mart will “do some more of those [home remodels], test the waters and see what our approach is going to be for the rest of the year to make sure that we are maximizing our return on investment.”

Schoewe insisted, though, that as the company evaluates the stores that are remodeled – whether through upgrades in the electronics and apparel areas or simply with cleaner restrooms for shoppers – it is finding revamped stores not only perform better than when Wal-Mart started the remodel program but also perform better than a control group of stores that are not being fixed.

Wal-Mart’s remodel/special projects plan encompasses 1,800 targeted units selected for remodels over an 18-month period. It began in 2005 and is scheduled to be completed by this fall, with the exception possibly of the stores slated for home division remodels.

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