Oct 9, 2015
Wal-Mart changes CFO, gets new Chief Merchant in latest shuffle
Oct 9, 2015
Wal-Mart Stores Inc on Friday named a new chief financial officer and installed a chief merchant, marking the latest shuffling of its management ranks as the retailer grapples with sluggish earnings.
The world's largest retailer by revenue said 47-year-old Brett Biggs, who runs the finances of company's international division, would take over the CFO role from Charles Holley, 59, who will retire from the job at the end of the year.
In a separate release it said Steve Bratspies, who has been in charge of food, was appointed chief merchandising officer, a key role deciding what and how Wal-Mart will sell items at its 4,500 U.S. stores. Bratspies fills a position left vacant for a year following the departure of Duncan Mac Naughton before the holiday season last year. He starts on Oct. 19.
The moves mark the latest in a series of shuffles of top posts under Chief Executive Doug McMillon, who has been reshaping the retailer since taking the helm 18 months ago. Last week McMillon unveiled plans to cut 450 jobs at its headquarters in Arkansas in an effort to "become a more nimble organization."
In a note to clients, Goldman Sachs noted that the CFO change followed "persistent declines in earnings estimates" and said "investors have been looking for significant changes at the company." McMillon and other top executives are scheduled to address analysts and investors at an annual meeting next week.
Wal-Mart's shares were trading down 0.4 percent at $66.63 on the New York Stock Exchange.
Wal-Mart faces tough competition on various fronts, from the relentless expansion of online leader Amazon.com to regional supermarkets fighting for a piece of Wal-Mart's grocery business, which accounts for more than half of its U.S. sales.
In August, Wal-Mart reported profit below estimates for the second quarter and cut its annual profit forecast, with margins weighed down by its $1 billion investment to boost workers' wages and other cost pressures.
The company also announced last month it had found a "material weakness" in its controls over accounting for leases, though it said any adjustments to its financial statements would be immaterial.
As CFO Holley has responsibility for accounting and control at Wal-Mart. The company did not mention the accounting issue in announcing the CFO change.
It said Holley, who has been CFO since December 2010, had elected to retire. McMillon said Holley oversaw "a period of immense company growth and change" and that he played a key role in "driving significant shareholder returns."
Holley will be replaced by Biggs, who has worked in all of the retailer's three major divisions since joining the company in 2000. Biggs has been international CFO since January 2014 and was previously CFO of the U.S. operations and held senior positions in the Sam's Club warehouse division before that.
One focus for investors will be whether Biggs looks to re-allocate capital from international operations, which are delivering much weaker returns than the U.S. business, said Edward Jones analyst Brian Yarbrough.
Yarbrough said he is also keen to see if Wal-Mart resumes a more active stance on share buybacks after scaling back significantly the past two years.
"It will be interesting to see how Brett navigates the ship. We are sailing in much different seas," Yarbrough said.
Wal-Mart named a new chief merchant - a vital position at any retailer involving oversight of product and promotional strategies - just in time for the holiday season, which kicks off in earnest later this month.
Bratspies joined Wal-Mart in 2005 and has held positions in marketing, grocery and general merchandise. Most recently he served as the executive vice president of food in which he was tasked by Greg Foran, the head of the U.S. operations, with improving the grocery operations with a focus on fresh food.
The company said Charles Redfield, a senior executive at Sam's Club, would assume the post of executive vice president of food at Wal-Mart.
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