Wal-Marts Scott Retiring as CEO, Duke to SucceedBy Reuters - | Posted 2008-11-22 Print
The surprise announcement by Wal-Mart, the world's largest retailer, lands one week before the crucial Thanksgiving holiday shopping weekend. This comes as Wal-Mart builds on its strength as a discount retailer in a contracting U.S. economy. Mike Duke, who will become Wal-Mart's fourth CEO, also takes over as the retailer increasingly looks overseas to fuel expansion as U.S. growth slows.
NEW YORK (Reuters) - Wal-Mart Stores Inc, which is gaining market share amid a global economic downturn, said Lee Scott will retire as chief executive early next year and will be succeeded by Mike Duke, who heads its international operations.
The world's largest retailer also promoted Eduardo Castro- Wright, 53, a rising star at the helm of its U.S. operation, to vice chairman, effective immediately.
The surprise announcement on Friday, landing one week before the crucial Thanksgiving holiday shopping weekend, comes as Wal-Mart builds on its strength as a discount retailer in a contracting U.S. economy.
Duke, 58, who will become Wal-Mart's fourth chief executive officer, also takes over as the retailer increasingly looks overseas to fuel expansion as U.S. growth slows.
"Some of you might be wondering why we are making the change at this time," Chairman Rob Walton said in a memo to employees. "I think Lee said it best when he told me, 'This is a great job, but you can't do it forever and at that point you have an obligation to find the right time for a transition'."
Walton, son of Wal-Mart founder Sam Walton, said he was "confident that the strategy we have in place is the right one for future success and Mike has been actively involved in developing and executing this strategy.
The CEO change is effective February 1, 2009, Wal-Mart said.
Analysts said the succession plan is being outlined as Wal-Mart gets back on track, boosting profits by persistently focusing on low prices.
"I think it's good. I'm happy to see it," said Joseph Feldman, an analyst with Telsey Advisory Group, of Duke.
Feldman said the timing of the announcement was "a little strange," but recalled that, at Wal-Mart's analyst meeting in October, there was almost a sense that Scott was saying farewell and "finally had the upper hand over Wall Street."
He said Castro-Wright's promotion could also signal the executive as a future CEO candidate.
"Wal-Mart is pushing well over $400 billion in sales," said Thomas Nyheim, portfolio manager at Christiana Bank & Trust. "Their business model is probably the only one that's working."
Wal-Mart shares rose 2.3 percent to $51.81 in afternoon trading.
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