Analyst: New CEO Could Point Wal-Mart Toward Global Growth

Last updated Friday, November 21, 2008 4:20 PM CST in News

By Kimberly Morrison
THE MORNING NEWS

Joe Beaulieu, analyst with Chicago-based Morningstar Inc., said the selection of Duke could signal that Wal-Mart considers international growth a priority.

“We were mildly surprised by the timing of the announcement,” Beaulieu said. “But given Wal-Mart’s strong performance this year, we see the logic.”

Duke and Scott, 59, both joined Wal-Mart in logistics capacities and have risen through the company’s executive ranks. Scott joined Wal-Mart in 1979 as an assistant director in the logistics division; Duke entered the company in 1995 as senior vice president of logistics after a 23-year career with Federated Department Stores and May Department Stores.

In Duke’s 13 years with Wal-Mart, he has served in logistics, distribution and administration divisions, as well as U.S. store operations. As vice chairman, he has been involved in developing and executing corporate strategy, including settling higher standards of excellence for the company’s resources and people. Duke led the redesign of logistics and merchandise distribution systems and recruitment of top management talent.

“We are also pleased that our succession and management development process continues to develop leaders internally,” said Walton, son of founder Sam Walton.

Scott is the last of the company’s executives to have served the company under its founder, who retired in 1988 and died in 1992.

Scott quickly became the retailer’s rising star under then-CEO David Glass. Scott became the retailer’s vice president of logistics in 1993 and became its executive vice president of merchandise two years later. In 1998, he was promoted to chief executive of the U.S. division, serving the following year as chief operating officer and vice chairman before becoming president and CEO in 2000.

He faced turbulent times for the world’s largest retailer as it embattled a negative public image, obstacles to growth and a more complex global environment.

But in 2005, Scott surprised many in a speech announcing ambitious initiatives in sustainability, responsible product sourcing, health care and labor issues like wages and diversity.

Under Scott’s direction, Wal-Mart has introduced $4 generic prescription drugs, in-store health clinics and expanded its benefit and bonus program for employees. The company has also made strides in its social environmental practices, introducing renewable energy, reducing waste, selling more sustainable products and establishing a more responsible global supply chain.

“It has been privilege to lead the company Sam Walton created, a company that continues to live the mission and culture he established,” Scott said. He will remain on the board of directors and be an advisor to Duke through 2011.

While Scott has made cemented his legacy in the company’s second-generation culture, Duke has led the company’s international expansion into 14 markets outside the U.S. In his tenure, the company’s international business has become a fast-growing part of overall operations with more than 3,200 stores and 620,000 associates. The international segment is projected to reach nearly $100 billion this year, according to Wal-Mart.

“I look forward to leading this great company,” Duke said.

Shares of Wal-Mart (NYSE: WMT) were up .69 cents to $51.35 in mid-day trading.

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