Retail giant Wal-Mart Stores, Inc.’s (WMT) U.S. operations’ Chief Executive Officer (CEO) Bill Simon has stepped down. Wal-Mart, however, did not cite any reason for his resignation. Shares declined on the news.
Greg Foran, current President and CEO of Wal-Mart Asia, has been promoted and will take over the responsibility from Simon as CEO, Wal-Mart U.S.
Foran joins Wal-Mart U.S. when the division is in doldrums. The division has been struggling since the past few quarters due to a challenging retail environment. The economic strains in the U.S. are pressurizing Wal-Mart’s low-income shoppers in fiscal 2015. Wal-Mart anticipates macroeconomic headwinds like reduction in government benefits, higher taxes, tighter credit and higher group health care costs to impact fiscal 2015 results.
Under Bill Simon’s leadership, Wal-Mart U.S had embarked on a turnaround strategy to boost its top line by focusing on everyday low cost products. He also initiated the company’s contribution to the revitalization of the U.S. economy and pioneered the ‘Made in U.S.A manufacturing philosophy. However, his initiative failed to bring any fruit to the company’s struggling U.S. division.
It remains to be seen how the new CEO improves Walmart’s business in the U.S. Foran is expected to strengthen the growing food business. Moreover, he is expected to employ strategies according to the changing demand scenario in order to enhance the performance of the region.
Foran, 35, has been part of Wal-Mart since Oct 2011. He was made President and CEO of Wal-Mart China in Mar 2012. Under his leadership, Wal-Mart China made significant progress through several strategic investments in supply chain and store portfolio during his tenures.
Foran has an extensive retail experience. Prior to joining Wal-Mart, he served as the managing director of supermarkets, liquor and petrol at Woolworths, the leading retailer in Australia and New Zealand; general manager of Big W (Woolworth’s leading discount store business) as well as general manager of Dick Smith Electronics.
Wal-Mart carries a Zacks Rank #3 (Hold). Some better-ranked retailers include The Fresh Market Inc. (TFM) and The Kroger Co. (KR), both holding a Zacks Rank #2 (Buy). Another stock in the retail sector worth considering is Dollar Tree Inc. (DLTR) carrying a Zacks Rank #2.