Closing non-performing stores is a positive. For example:...

Closing non-performing stores is a positive. For example:

Scenario 1 (non-performing store)

1		Store 1	Store 2	Store 1 + 2
2	Revenue	$500m	$500m	$1,000m
3	Profit	$25m	-$10m	$15m
4

Scenario 2 (close non-performing store)

1		Store 1
2	Revenue	$500m
3	Profit	$25m

As shown above, sales has dropped off since closure of Store 2 but the company is now more profitable as the loss making store is closed. Hence, profit margin has increased which would suggest a market re-pricing due to improved cash flow.