Costco to shut two home-furnishing stores

Issaquah, Wash. Costco Wholesale Corp. said Thursday that it will shut its two home-furnishing stores in July due to the recession.

The company said it decided to close its Costco Home stores in Kirkland, Wash., and Tempe, Ariz., because their leases were close to ending.

"The current economic slowdown and resulting weakness in the home-furnishings business in particular have led us to conclude that the single-format Costco Home concept does not fit into our long-term expansion plans," chief executive Jim Sinegal said in a statement.

The company does not anticipate layoffs related to the closings. Employees at the locations will be offered the opportunity to transfer to other local Costco warehouses, and employees at the Issaquah home offices will also be offered other opportunities within the company. Costco still plans to offer home furnishings at its remaining wholesale clubs.

The closings are also not expected to hurt Costco's financial results.