Costco Wholesale Corp., the nation’s biggest retail group, is closing several stores after its chief executive said the deal was “very complicated.”
Read moreAt a company-wide earnings conference on Wednesday, John Manley, the company’s chief financial officer, said the acquisition of Costco would bring a “very sophisticated” store management team, but added that he was unsure if the deal would be completed in time for the end of the year.
“Costco is moving into a very complex business, and I can’t get into specifics,” Manley said.
“I think that’s why it’s a big deal.
The complexity is going to be a huge part of the process.”
In an email to investors on Thursday, Manley reiterated the need for Costco to “focus on growth, profitability, and delivering on customer service, and we are working hard to make that happen.”
The deal was approved in October by the company board of directors, with Costco CEO Jim Murphy serving as acting chief executive.
The deal includes the Costco chain’s Costco Whole Foods, which has nearly 50,000 locations.
The merger will include two of the world’s largest retail chains, and has been touted as a boon for consumers.
Costco’s stores are expected to make up more than half of all U.S. retail sales by 2025, according to research firm Retail Industry Association.
The company has also reported an average revenue of $3.1 billion in the first quarter of fiscal 2019.
Costco will be able to tap into Costco’s retail business as part of its new business, which it said is “focused on delivering better value to our members.”
Costco said in a statement that it is “deeply committed to investing in our local community.”
The Costco deal is the latest to involve large-scale retail consolidation.
The conglomerate, which operates more than 2,400 stores in 26 countries, last year agreed to buy Target for $3 billion.
In the months leading up to the Costco deal, the grocery chain has been under pressure from the federal government, with regulators investigating whether the chain failed to disclose a potential conflict of interest when it decided to buy Whole Foods for $2.9 billion.
Costco, which employs 2,700 people, had also faced antitrust scrutiny in the past.
In addition to the acquisition, Costco is in talks with two other potential buyers for the retailer’s businesses.
A group of U.K.-based companies that owns grocery stores in Europe is planning to buy the Costco business in 2020, according a source familiar with the negotiations.