Wal-Mart Shuffles Management In Reorganization

Last updated Wednesday, January 24, 2007 5:26 PM CST in Business

By Anita French
The Morning News

    Wal-Mart Stores Inc. is reorganizing its U.S. marketing and merchandising areas and shuffling management in what some analysts see as the beleaguered company's effort to improve sales in key areas.

    John Fleming will become Wal-Mart's chief merchandising officer after leading its marketing division for almost two years, the company said in a news release Wednesday. Stephen Quinn will replace Fleming as executive vice president and chief marketing officer.

    Also, Doug Degn, executive vice president of food, consumables and hardlines, is retiring after almost 25 years with Wal-Mart. Claire Watts, executive vice president of merchandising, will now head the apparel merchandising area and report to Fleming.

    Wal-Mart said in the release that its merchandise initiatives will be focused on five divisions. Four of these -- grocery, entertainment, apparel and home -- will report to Fleming. He will also have responsibility for two newly created organizations, one focused on the customer experience and the other on planning, pricing and replenishment.

    The fifth division -- pharmacy and optical -- will continue reporting to Bill Simon, executive vice president of professional services and new business development. Simon reports to Eduardo Castro-Wright, president and CEO of Wal-Mart Stores U.S.

    George Whalin, who heads a retail consulting agency in California, said this latest move by Wal-Mart was a step in the right direction.

    "The merchandising and marketing part of their business is going through significant changes, and they have to get it right -- which they haven't the last year or so. The debacle of getting rid of Julie Roehm and then the whole thing with them trying to be fashion-oriented was obviously a mistake, and they figure they need to do something differently," Whalin said.

    Roehm, 35, was a senior vice president in Wal-Mart's marketing communications and reported directly to Fleming. She and a subordinate, Sean Womack, left the company in December under questionable circumstances.

    Roehm had been with Wal-Mart less than a year, where she was responsible for the development and execution of advertising strategies.

    Whalin said there had been industry rumors since Roehm's departure that the company would reshuffle its marketing division, so the promotion of Fleming and Quinn came as no surprise.

    "It's the first step in fixing their apparel problem, and it should help. But they've got to quit this revolving door with executives. That hurts any organization," he said.

    Wal-Mart's recent efforts to improve its image with trendier fashion brands and home fashion accessories have fallen flat. The company reported disappointing fall and holiday sales even as it started re-emphasizing its low prices.

    Last year Castro-Wright outlined to investors a three-year plan to increase the company's sales and profitability. Much of that plan focused on becoming more relevant to the company's diverse customer segments.

    Patricia Edwards, fund manager with Wentworth, Hauser and Violich in Seattle, said Fleming becoming chief merchandising officer should help Wal-Mart improve its sales.

    "They need someone who completely understands their customer and how to connect with that customer in a very touchy-feely, non-scientific way. They've always been great at the finance of retail but not so great at the art of retailing -- the art of providing the right item for the right value in the right shopping experience. Wal-Mart has been kind of in that no-man's zone where they got part of it right but not enough," Edwards said.

    She cited Target Corp. and Nordstrom as two companies who understand the art of retail, noting that Fleming came to Wal-Mart from Target.

    "He did great things there," Edwards said.

    Fleming spent 19 years with Target, serving as senior vice president of merchandising for the fashion divisions.

    Stephen Quinn joined Wal-Mart in 2005 as senior vice president of marketing. Before then he was with the Frito-Lay division of Pepsico Inc., most recently as chief marketing officer. Quinn will report to Castro-Wright.

    Degn began his 24 years with Wal-Mart as a store pharmacist and went on to lead the company's merchandise efforts in consumables, food, electronics and other categories.

    Wal-Mart also said in its release that Carter Cast, president and CEO of Walmart.com, will now report to Castro-Wright.

    Reader Comments (43 comment(s))


    The following comments are provided by readers and are the sole responsibility of their authors. The Morning News does not review comments before their publication, nor do we guarantee their accuracy. By publishing a comment here you agree to abide by our comment policy. If you see a comment that violates our policy, please notify the web editor.

    Beverly Barnes wrote on Jan 25, 2007 7:19 AM:

    " Everyone needs to check their facts - John Fleming never actually worked for the Target division of Daytson Hudson Corp. He worked for the lackluster dept. store division of the corporation, which was eventually spun off due to poor sales. He also orchestrated the debacle in marketing that kept WM in the news throughout the month of December. "

    Edurardo will be wrote on Jan 25, 2007 7:58 AM:

    " our ceo then we will have Problems. He thinks we are to perform like Ecuadorians. "

    carol - newmarketbuilders wrote on Jan 25, 2007 11:31 AM:

    " A couple of high-visibility executive defections and adjustments do not a "revolving door" make. Compare Wal-Mart to other retailers (Gap, for example) and apply the exponential difference in head counts and you end up with minor tweaks. As for all of the fashion debacle talk; it needed (and needs) more time to take. The looks were spot-on. "

    Mickey wrote on Jan 25, 2007 3:31 PM:

    " Wasn't Doug Degen being groomed for H.Lee Scotts position? So why is he retiring? Also Wal-Mart hasn't gotten it right in over 8 years that was the last time their stock split. When you treat your employees like cattle and vendors like they owe you something, eventually you are going to reap what you sow. "

    DoTheShuffle wrote on Jan 25, 2007 6:53 PM:

    " Oh no they shuffled from the bottom of the deck . Wrong side. They should go through front doors of the HO and begin the shuffle,left,right,behind front desk,in the little covey holes and closets,then onto the offices ,down the halls. Form a collum of ex-offio's and march them out of sight. All those who think they were appointed by God need to join the march too . Bye,bye, now and hurry before the door hits you on way out :-) This ones for you Sam . "

    I suspect Doug wrote on Jan 25, 2007 8:26 PM:

    " couldn't deal with this new regimes shenanigans any longer, as an almost 25 year associate, it's difficult to watch all you worked for and believed in for years and years, turn to mush. Plus if you really care about the associates and Sam Walton's beliefs Eduardo the Ecuadorian Wonderboy will run you off! "

    The Dutchess wrote on Jan 25, 2007 8:37 PM:

    " Doug retiring on his own? He worked directly for Tom Coughlin for years. This isn't a coincidence. Now Doug can join the group having Monday Morning breakfast with Coughlin at his ranch since he isn't allowed to leave! Coughlin's "Breakfast Club" is growing fast... "

    disappointed wrote on Jan 25, 2007 9:00 PM:

    " is this someone re-arranging the deck chairs while the titanic sinks? as one who has never worked there but does enjoy an all-american success story it hurts to see what is happening at walmart. i for one stay away as much as is possible. why? because it appears to me that walmart has abandoned the made in the usa theme. can an insider tell me i am wrong? i hope so... "

    To the dutchess wrote on Jan 25, 2007 10:47 PM:

    " you can't be the dutchess, because I am. You sure seem worried about Monday morning breakfast, guess you haven't been invited. Sure Doug worked for Tom, but he's not leaving due to that. If that were the case, he'd have been gone long ago. What position do you have? Town gossip? County Clairvoyant? Keep watching, your current illustrious leaders won't last much longer either. Shareholders don't like it when there aren't improvements, and that's the only thing they've been good at thus far is consistent poor performance. "

    disappointed, wish we wrote on Jan 25, 2007 10:50 PM:

    " could tell you that you're wrong, but considering that 60% of Wal-Mart's merchandise is purchased from China, I would definitely say the Made In U.S.A. has gone by the wayside, along with all the other values of the founder, including respect for the associates. "

    Mr. Sam wrote on Jan 26, 2007 12:14 PM:

    " can now oficially start turning in his grave. "

    Liz wrote on Jan 26, 2007 2:39 PM:

    " I am so sick of everyone saying what "Sam would think" or what "Sam would do." He was a businessman. He to could be tough when it came to business decissions. That is what built Wal-Mart. There are many new challenges in front of Wal-Mart today that he did not have to deal with. Who is to say that he would not have to make some unpopular descisions as well. "

    Sure Liz wrote on Jan 26, 2007 3:05 PM:

    " you have a great point, but one wonders how long it will take for some of this new blood to decide that Sam's ways are to old fashioned and they deserve higher salaries, better planes and no more room sharing on trips. No matter how many hard decisions he would have had to make, his core values are about to be left in the sut. "

    oops wrote on Jan 26, 2007 3:05 PM:

    " s/b left in the dust. Sorry "

    Grace wrote on Jan 26, 2007 3:23 PM:

    " I used to work for WM over ten years ago and we were talking about Mr. Sam rolling over in his grave then. At that time it was the Bill Fields fiasco. Some things never change, just the people. If they truly want sales to go up, they need to focus on customer service. I don't think the merchandise is that bad, but if you ever visited the WM store in my town, you'd never shop at another one. "

    Sam is Dead but not forgotter wrote on Jan 26, 2007 3:52 PM:

    " Mr Sam took scores of executive groups (non WM) around to 3rd world nations to teach them outsourcing. He never supported "American made", that was just another pitch. I once dated the pool assistant who typed and distributed reports of Mr. Sam's outsourcing jaunts. Low prices are pushed by low costs. "

    Will wrote on Jan 26, 2007 3:57 PM:

    " Correct. I had friends in marketing at the time who worked on the campaign. It was understood that the "Made in America" promotion would be used as long as it acheived the financial results. And when it didn't, it was dropped. "

    Assoc 2 wrote on Jan 26, 2007 4:11 PM:

    " Let the Associates run it!!!!!!! "

    Will wrote on Jan 26, 2007 4:17 PM:

    " Are you talking about the store associates? "

    disappointed wrote on Jan 26, 2007 6:22 PM:

    " thanks for the information ref the "made in America" matter. that was an eye opener for sure. "

    Yellow Rose wrote on Jan 26, 2007 9:42 PM:

    " To the dutchess - no, not town gossip. Just helping rid the upper mgmt staff of the good ol boys. Times are a changing. Too bad your husband can't speak up and do something about it. If he was so good, why isn't he back in ridding this place of the filth? "

    Obviously wrote on Jan 28, 2007 12:45 AM:

    " the current leadership is not interested in someone that cares about the people, exhibits honesty and integrity, or that focuses on raising sales instead of cutting expenses, as well as preserving the foundation of the company. Believe me, he would love to go in and clean up, problem is, your leadership are like little piggies, and just love filth! And, I may be partial, but the fact is he IS darn good at running his business. He never ran anything that didn't end up the best performance in the company, ever! And always gave credit to those he worked with, and deservedly so. The only way he could go in, is if they(the current leaders) went out. He'd literally work for free to be able to make a difference, out of his loyalty to Sam and the associates. Maybe someday... "

    Been There... wrote on Jan 29, 2007 7:20 PM:

    " The revolving door is definitely alive at WMT Home Office. What no one sees are the SCORES of women officers (not as notorious as Julie Roehm - but pretty senior) who have mysteriously resigned to "spend more time with their families". Oh Please! If anyone thinks that 12+ Executive women who have worked past the HUGE boys club that is WMT's to just throw in the towel and believes is must be kidding themselves. There are really favored executives who can do no wrong (even when they do) and are considered Golden Boys... Fleming has been one of them since he walked in the door. Oh and I have seen so many men come in and be counter to the culture its not even funny! If a woman exec did it - they'd be gone in a heartbeat. Of course, to spend more time with their families... "

    I recall wrote on Jan 29, 2007 8:38 PM:

    " Lee stating that the good ole' boys club was going to be gone. Referring to Tom C. Now, let's see, there is still a good ole' boys club, now it's Lee's club. No more hunters, just boaters and golfers. What would be great would be to have leaders that led the entire company instead of their fair haired boys. If the CEO hires one more neighbor, I'm going to puke! If you went into Pinnacle and checked the lockers on golf day, you would find nearly the entire executive committee golfing instead of working on the company improvements. "

    Good Ole Boys wrote on Jan 30, 2007 8:46 AM:

    " is just a term, now it is rich ole boys playing on our dollars. "

    God wrote on Jan 31, 2007 3:07 AM:

    " help this company "

    Global Procurement wrote on Jan 31, 2007 3:08 AM:

    " is dying too. Get Lawrance Jackson Back "

    Attention: Wal-Mart Board of Directors: wrote on Jan 31, 2007 11:24 AM:

    " President Bush Urges Corporate Boards to Tie Compensation Packages to Executive's Performance NEW YORK (AP) -- President Bush took aim Wednesday at lavish salaries and bonuses for corporate executives, standing on Wall Street to issue a sharp warning for corporate boards to "step up to their responsibilities" and tie compensation packages to performance. If you listen to the President, Lee shouldn't be getting a raise, or bonus, neither should the other 9 top ten executives! "

    The above wrote on Jan 31, 2007 11:27 AM:

    " would be something different! Think how much money the company could save if the board held the executives accountable, and paid them based on performance! "

    Mary wrote on Feb 3, 2007 9:07 PM:

    " Here we go again,give me the softline job,believe me I can sell wal-Mart clothes..The people in this small town only need friends they know and trust.They come to shop and visit,get to know your people..come on its no secret "your people take care of you if you take care of them"SIMPLE>>21 years softlines... "

    And... wrote on Feb 4, 2007 8:18 AM:

    " if you DON'T take care of your associates.......They WON'T take care of YOU! I shopped in a Wal-Mart last night and the lines were backed up and only 4 open, in a fairly large supercenter. The cashier said the schedules are made in Bentonville, and whomever was doing them needed to be fired. You see, the cashiers knew it was super bowl weekend and tax returns are being distributed. She knew perfectly well that they were going to need more cashiers, and so did the store managers. The managers aren't in charge of the schedules. Think about this:the company spent tons of money to set up district offices for the market managers and all the other staff to supposedly enhance the reaction to assist stores.Problem is that they aren't given the autonomy to run their business.They are working within the same perameters of the managers...General Office micromanages the stores with computer systems, and the managers are not allowed to run their stores based on their needs.The computer also requires accurate counts to reorder merchandise,and that is why there are so many out of stocks, because the associates aren't given proper time...too busy running cash registers.The corporate headquarters should NOT be in charge of scheduling, the manager should! "

    They need to shuffle alright, wrote on Feb 4, 2007 8:52 AM:

    " backwards that is. The new people are destroying the company. Shuffle backwards and bring some of the good ones back. The CEO told all the executives in a meeting a while back that he knew what color of underwear they had on at 2pm on Saturdays, and he was going to weed out what he considered the "BAD' ones.He basically stated he would eliminate anyone who still believed in the culture, or wouldn't accept his decisions quietly. He has created a dictorship. That is against any book you read about improving your company. Management through intimidate will not make a good strong company, Ask all the people that used to work for woolco. The similarities are haunting. "

    Have you noticed that wrote on Feb 4, 2007 8:54 AM:

    " Lee, Eduardo etc... rarely go into stores? Why not? The associates can't stand them, that's why. They better get someone of authority in there that will fight for the people. "

    Anne wrote on Feb 5, 2007 11:06 AM:

    " With thousands of stores now, how would you even know if they were in stores everyday? Once again, someone posting without facts. Also, what do you mean "fight for the people?" The "people' need to do the jobs they are paid to do or move on. "

    The people are doing the jobs they are paid to do wrote on Feb 5, 2007 11:39 PM:

    " but don't underestimate them, because they are also going to, whether you like it or not, stand up for the foundation of this company, and the beliefs that were bred into them for years. They aren't given credit for their abilities to know what is best for the company's long term survival. You on the other hand sound like a paid blogger, some executives assistant, or, last but not least, another WM attorney looking for brownie points. Their will be closure to this at some point, and if I was going to place a bet, I'd bet on the strongest labor group in the world, the Wal-Mart Associates. And they aren't planning on moving on, anytime soon, quite the opposite. "

    to all you naysayers out there wrote on Feb 6, 2007 12:05 AM:

    " We are loyal to Wal-Mart, not the leaders, to Sam, not Lee and Eduardo. The company cannot force loyalty, they must earn it. They cannot force us to give 150%, we must want to. We can't be fired for giving less, only giving unacceptably. We can't be bullied into leaving. We cannot be intimidated. We do not have to respect the leaders, the must earn it. We do not have to trust the leaders, they have to earn it. We are, of course only totally replaceable associates, but together as one, as you will see, we are a source to be reckoned with. We will speak as one, soon, and we will be heard. Say whatever you want, you won't take the wind out of us, we are more focused than we have ever been, and not near as stupid as you try to give us credit for. "

    To Anne wrote on Feb 6, 2007 7:04 AM:

    " How to know if they're in stores everyday? It's easy, if they're in their office, they're not in stores! "

    The people ARE doing the jobs they are paid to do wrote on Feb 6, 2007 7:09 AM:

    " And they WON'T be moving on!!!It's all about focus. It has always been said that the associates are capable of achieving the unachievable...well, it looks like they still are, doesn't it? It's not over til the fat lady sings...and...she's...edging...towards...the...mike... "

    John wrote on Feb 6, 2007 10:42 AM:

    " She need to start singing or get off the stage. This is the same kind of complaining and grandstanding that I used to hear years ago when I worked at Wal-Mart. The leadership is used to it. "

    J wrote on Feb 6, 2007 5:41 PM:

    " After working for Wal Mart for a number of years first as a buyer and now at the home office I have seen a change from the Belt Buckle Club to the Golf and Boating Club (No GIRLS ALLOWED). Lee Scott and the boys should take a look at the talent that they have and stop looking outside the family, if Sam would have had Lee’s philosophy toward hiring Lee would still be stocking shelves. There are a lot of talented people (Men and Women) working for the company, why do we have to go out side. "

    used to be it didn't matter wrote on Feb 6, 2007 8:31 PM:

    " if you were an old cowboy,a golfer,a fisherman,an intellectual,or anything else.it used to be about your ability to perform,to bring success to the table for the company, to train your successors and take pride in it,to care about the culture of the company,to be honest and loyal.Somehow 3 years ago,if you were a cowboy type,you got put into a "group".Some of those cowboys were Texans,and you can take the Texan out of Texas,but you won't get Texas out of the Texan.I saw many awesome leaders that just so happened to also be Texans and wore belt buckles. SO WHAT!If they did there jobs,and did them well,they should not have been cast into a bad light.There were also golfers that performed.There were intellectuals that performed.There were people with boats that performed.It's not right to categorize people,they must be judged individually.But your CEO thinks not.He thinks cowboys and hunters don't fit the "Fortune 500" look.Sam was a hunter and wore buckles from time to time,and that man loved Texas.I'm just sure he would like to wring lee's neck.Now all we have is a bunch of highly educated anal cavities.If they keep the same leaders 2007 will really be bad,it's already headed south.The ONLY way to fix it, is for the Waltons to step in hold the current leaders accountable,review what is successful in this company and bring back some leadership with integrity and proven performance "with Wal=Mart" to rally the troops.The current focus and priorities by Lee are dividing and destroying Wal-Mart "

    From the appearance of everything wrote on Feb 7, 2007 7:16 AM:

    " it looks like there is no focus. They seem to be branching off in numerous directions doing fix its. They are having an identity crisis, so to speak. It is apparent that what they "have" done thus far has not generated additional profit or sales, but they are having one heck of a negative publicity roll, and keep having it. Their lackluster performance this year has not helped them either. It certainly isn't a company I feel good about investing in right now. "

    J wrote on Feb 9, 2007 2:51 PM:

    " Lee should look at the customer base that we have built and stop trying to make our stores into up scale department stores. The “talent” that he has brought in from out side is used to shopping in New York and Los Angles not in Rogers, Harrison, or Fort Smith. If Sam would have hired a bunch of over educated, stuck up, want to be Management types instead of down to earth hard working people we would be just another chain of stores. Lee take your multi million dollar bonus and go to Florida for an extended vacation so the few people that remember Sam and Sam’s way can try to save our future. If not at the end of the day I’ll sell my retirement stocks and buy WMT on a six month margin and move to Florida rich:) "


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