Wal-Mart seen shaking up management - again
CEO of company's namesake U.S. stores and Sam's Club division may be among those affected, report says.
NEW YORK (CNNMoney.com) -- Wal-Mart is moving to shake up its senior management, which could mean leadership changes at the company's Wal-Mart U.S. stores division and its Sam's Club unit, according to a report published Tuesday.
Citing people close to the company, AdvertisingAge reported that Eduardo Castro-Wright, CEO of the Wal-Mart Stores Division in the U.S., may move to an international position to be replaced by Doug McMillon, chief executive of the Sam's Club unit.
But at least one industry expert said that there's a good chance of more management changes to come.
"There's a high degree of likelihood of something like this happening," said Burt Flickinger, managing director with consulting firm Strategic Resources Group.
Last week, Wal-Mart tapped John Fleming as its chief merchandising officer in an effort to boost sales and profitability. (Full story)
Additionally Doug Degn announced he was retiring as vice president of food, consumables and hard lines for Wal-Mart Stores.
"With Doug Degn taking early retirement, he's an irreplaceable loss for Wal-Mart. Degn was one of the people hand-chosen by Sam Walton when he was alive to be a leader. Losing Degn makes it a problem for Wal-Mart," said Flickinger.
AdAge also reported that the management changes could affect 10 to 15 people.
Exactly where Castro-Wright, 51, would go from his current position remains unclear, AdAge reported, although he is believed to have the respect of both the company's board and senior management.
"With Wal-Mart struggling in its international markets like Puerto Rico, Japan and getting kicked in its can all over Latin America, especially with Carrefour in Argentina and Brazil, the company needs to fix that situation," Flickinger said. "Castro did a superb job with Wal-Mart de Mexico and because of that he inherited Wal-Mart U.S."
McMillon, 40, has helped make Sam's Club more competitive with warehouse club leader Costco (down $0.06 to $55.21, Charts), even as the Wal-Mart discount stores have struggled in recent months to grow profits and sales.
"These could be some good management moves, but it also is indicative of major holes in terms of Wal-Mart's bench strength," said Flickinger. "It's analogous to Gap and the Fisher family losing Mickey Drexler and the problems that followed."
Last week, Pressler was ousted as the CEO of Gap Inc. (up $0.19 to $19.00, Charts) after the retailer struggled with disappointing sales, profits and traffic trends at its Gap, Old Navy, and Banana Republic brand stores. Pressler took over in 2002 for Drexler, who helped take the apparel chain to new heights, transforming the company into a $14 billion industry leader.