Walmart merchandising chief leaves
NEW YORK -- Walmart Stores Inc.'s chief merchandising officer John Fleming is leaving the company Aug. 1 after 10 years, the world's largest retailer said Friday.
Fleming, who played a big role in shaping what was on store shelves, will be replaced temporarily by two people: Jack Sinclair, an executive vice president, will oversee food and health and wellness merchandise; John Westling, another executive vice president, will oversee general merchandise and replenishment.
A Walmart spokesman said Fleming is leaving to spend more time with his family.
The move comes three days after the company, based in Bentonville, Ark., said Chief Operating Officer Bill Simon would take over from Eduardo Castro-Wright as president and CEO of its U.S. operations. Castro-Wright will lead the retailer's e-commerce unit Global.com and its global sourcing division. He will remain vice chairman of the company.
Walmart's CEO Mike Duke said earlier in the week that the shift allows Castro-Wright to relocate to California to be with his wife following her recent heart transplant. The move will help Walmart focus on growing its international Web retail operations at a faster pace and expand online sales, he added.
Walmart Stores Inc. benefited as consumers traded down during the recession. But now wealthier patrons are showing signs of trading back up, and high unemployment and gas prices are still squeezing the retailer's main clientele.
In May the company posted a 10 percent increase in first-quarter net income, but that was driven by cost-cutting and growth overseas. A key measure of revenue dropped 1.1 percent, the fourth consecutive quarter it fell, as Walmart's namesake stores saw people shopping less or defecting to rivals such as Target or dollar stores, which have heightened their discounting pitch.
The economy's slow-motion recovery has hurt Walmart, but company executives acknowledged to investors in May that a series of merchandising missteps was partly to blame for lackluster revenue results.
A weak area has been clothing, which the chain has tried to turn around with different strategies. And items like extra varieties of soups or laundry detergent that it stopped carrying when it tried to de-clutter its stores will be coming back. Walmart is also being more aggressive with price cuts, after a year when analysts said the company has been too complacent.
Fleming oversaw the chain's redirection toward trendier fashion items in 2005, a strategy that flopped.
In a note to staffers, Simon said Walmart's mandate is to "increase customer traffic, make sure our products are relevant to our customer and never give an inch on price leadership."
Richard Hastings, a consumer strategist with Global Hunter Securities, said it was "unusual" to see so much change at the top so quickly" and said it suggests that Walmart is looking for new ways to solve its existing problems.
"The model it had in place was heavily oriented in procurement and logistics," Hastings said. "This could be a hopeful turning point for Walmart."
Shares fell 33 cents to $48.18 during midday trading.