By Shelly Banjo
Wal-Mart Stores Inc.'s chief merchandising officer is leaving
the retailer just days before the annual Thanksgiving shopping
frenzy known as Black Friday, causing a broader shake-up in the
company's namesake U.S. division.
Greg Foran, chief executive of Wal-Mart U.S., told employees in
a memo Tuesday that Duncan Mac Naughton decided to leave the
company "to pursue new opportunities," effective immediately. Mr.
Mac Naughton confirmed the move through a spokeswoman.
The departure allowed Mr. Foran to restructure the U.S.
operation as Wal-Mart tries to fix a problem that has dogged it for
years: stocking products that will attract more shoppers into its
stores. As a result, Wal-Mart won't name a new chief merchant at
this time and executives in charge of food, general merchandise,
apparel and several other business lines will report to him
directly.
"I would like to use his opportunity to get closer to the
merchandising organization," Mr. Foran said in the memo.
Wal-Mart's U.S. business, which makes up nearly 60% of the
company's $476 billion in sales, has been struggling to boost sales
during two straight years of declining shopper traffic. Chief
Executive Doug McMillon is rethinking the retailer's U.S. strategy
more broadly. To that end, he is slowing the expansion of its giant
supercenters and moving into e-commerce and smaller-format grocery
stores.
And the company has started to see a glimmer of improvement. In
the most recent quarter, the retailer posted its first U.S. sales
increase since 2012, with a 0.5% gain excluding newly opened or
closed stores, helped by lower gasoline prices.
The chief merchant plays a key role at any store chain, deciding
on retailing strategy and choosing which products to promote to
drive sales. This year, Mr. Mac Naughton led a strategy to forgo
the traditional one-day Black Friday frenzy in favor of hosting
more than a week of deals around Thanksgiving to encourage
consumers to shop early and spend their dollars at its stores.
The company also announced it will replace Wal-Mart's head of
grocery, Jack Sinclair. Grocery makes up 56% of the U.S. business
and has been struggling to improve performance on its fresh
products in the dairy, meat and produce aisles. It has also been
trying to ensure items are in stock and on the shelves when
customers want them.
Steve Bratspies, who had led Wal-Mart's general merchandise
division, will take over as executive vice president of food, with
"a strong focus on fresh," the memo said. Mr. Sinclair will be
taking another role within Wal-Mart to be announced at a later
date.
The most immediate hole will be the loss of Mr. Mac Naughton
right before the all-important holiday season, when retailers
typically bring in a fifth of their annual sales. Wal-Mart said the
holiday strategy has been in place for months and that the
operations team, not the merchants, are now primarily in charge of
carrying out the plan.
"We feel confident in operators and merchants to execute the
holiday plan and take us on to next year," spokeswoman Deisha
Barnett said.
Mr. Mac Naughton joined Wal-Mart in 2009 as chief merchandising
officer of Wal-Mart Canada and moved over to the merchandising
operations at the U.S. business in 2010.
According to people familiar with the matter, one of the reasons
he left was because he was passed over for the top U.S. job in July
by Mr. Foran, a New Zealander who had been running Wal-Mart's Asia
division and had never run a U.S. retailer.
Write to Shelly Banjo at shelly.banjo@wsj.com
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