Wal-Mart replaces H Lee Scott, appoints Mike Duke as new CEO
22 Nov 2008
Wal-Mart Stores Inc, the world's largest retailer, unexpectedly announced the retirement of CEO H Lee Scott after almost nine years at the helm, replacing him with overseas chief Mike Duke. The changes are effective 1 February, the Bentonville, Arkansas-based company said in a statement.
Scott disclosed his departure even as Wal-Mart was poised to be the top performer among the 30 stocks in the Dow Jones Industrial Average this year. The discount retailer more than doubled its annual revenue to $378.8 billion since Scott took over in January 2000.
Scott will continue as chairman of the board's executive committee. His replacement at the helm of day-to-day affairs with Duke seems logical as international operations accounted for a quarter of Wal-Mart's revenue last year.
Eduardo Castro-Wright, head of Wal-Mart's US operations, was named vice chairman, effective immediately. The company will name Duke's replacement before he leaves his role as president of Wal-Mart International.
Chairman Rob Walton said the leadership change "occurs at a time of strength and momentum," as the company has seen its sales strengthen of late in the US as other retailers have been recording slumping sales. (See: Wal-Mart beats slump with higher quarterly profit, projects weaker Q4)
The moves come as Wal-Mart, which is expanding in countries from Brazil to China, plans to shift more than half of its international capital-spending budget to faster-growing emerging markets in five years. That marks a reversal from the spending pattern of the past five years, the majority of which was focused on established markets such as Canada and the UK, Duke told a company meeting with investors and analysts in October. (See: Wal-Mart in $1-billion Brazilian expansion as US slows down)
The stock rose 6.7 per cent this year till Thursday, adding to last year's 2.9 per cent increase. Since Scott took over, the retailer has lost 22 per cent of its stock-market value.
Duke, an industrial engineering graduate from the Georgia Institute of Technology in Atlanta, helped Wal-Mart curb distribution and logistical costs as an executive in those units. He took charge of the overseas division in 2005, 10 years after joining Wal-Mart and after working for Federated Department Stores and May Department Stores. He said he is "looking forward to leading this great company, " calling Wal-Mart "very well positioned in today's economy."
