Wal-Mart chooses successor for CEO
NEW YORK - Wal-Mart Stores Inc., the world's largest retailer, unexpectedly said yesterday that its chief executive will retire in February and be replaced by the head of its international division.
The surprise change in leadership right before the crucial holiday season comes as Wal-Mart has roared back to success as people looking for bargains shop more at discounters. Still, the company faces hurdles ahead amid slowing growth in the United States, and analysts say the decision to tap an international executive serves as a testament that the company sees its growth coming overseas.
Bentonville, Ark.-based Wal-Mart said Mike Duke, 58, vice chairman of its international division, will take the reins from Lee Scott, 59, effective Feb. 1. Duke also becomes a member of the board of directors immediately.
Scott, who joined Wal-Mart in 1979 and became president and CEO in 2000, will continue as chairman of the executive committee of the board until January 2011, according to Wal-Mart spokesman Dave Tovar. He will also serve as an adviser to Duke until 2011.
During his tenure, Scott faced increasing scrutiny particularly from union-backed groups over issues from environmental concerns to wages and healthcare, which critics say have been too skimpy. The negative publicity had depressed the company's stock price for 2 1/2 years and made the company the poster child for bad corporate behavior.
But Wal-Mart's overhaul of its stores and merchandise and its reemphasis on low prices came together at a time when the economy began to turn sour last year. Since September 2007, Wal-Mart's shares have made a remarkable comeback and its image has improved as the company, under Lee's leadership, implemented environmental sustainability efforts, a discount drug program for customers, and other initiatives.
Even in recent weeks, the stock has held up as most companies' shares have plunged. Last week, Wal-Mart said third-quarter profit rose 10 percent as shoppers snapped up early Christmas promotions.
Wal-Mart shares rose $2.26, or 4.5 percent, to $52.92.
Some analysts found the timing puzzling, while others said the change may be necessary to give the company a new face to deal with a new US government.