McMillon To Lead Wal-Mart International

CEO, President Formerly Ran Sam's Club

Last updated Wednesday, January 7, 2009 5:24 PM CST in Business

By Lana F. Flowers
THE MORNING NEWS

"McMillon is classic Wal-Mart management: Totally homegrown from the inside power of the business, its logistics and distribution core. The company has refined its international strategy from a spray approach to a tightly focused, region-by-region approach," Hastings said.

With that experience comes great responsibility.

"Clearly, he is in a position with great opportunity and great challenges," said Scott Alaniz with Boston Mountain Money Management in Fayetteville. The firm owns Wal-Mart stock. "But, Wal-Mart is clearly the size now where it is very difficult for one individual to move the needle, particularly for someone without the persona of Sam Walton" and his tutelage and influence, Alaniz said.

The Wal-Mart founder died in 1992, when McMillon likely was working at hourly wages for Wal-Mart.

Alaniz speculated McMillon's new assignment may be a step in grooming him as a future president and CEO of Wal-Mart Stores Inc.

But, Alaniz said, "It's a long way from the cookbook to the kitchen."

The news of McMillon's new job did not faze Wall Street. Alaniz noted Wal-Mart stock trading volume was about 10 million shares short of the average volume of 26.69 million shares.

McMillon is familiar with Wal-Mart sustainability issues, such as using windmills to power stores, using bathroom motion sensors to reduce water usage and eliminating product packaging.

"I remember the first conversation that Lee (Scott) had with a group of us, and I didn't really understand what he was talking about. 'Sustainability' was defined in a financial sense to me," McMillon told Fortune magazine in October. "We found items that if you simply reduce the amount of packaging involved, save cost and pass that on to the customer, you sell more."

Selling more may be key in the U.S. economy for Wal-Mart even as McMillon tries to increase overseas sales in the international division.

"Although the US economy is very weak, it has not collapsed and people are still shopping and spending -- and Wal-Mart is still getting lots of those dollars," said Hastings.

Wal-Mart is exploring other markets, especially in South America, "where the economy, centered around Brazil where the company already has a huge presence, seems to be in good shape with an expanding middle class," Hastings said.

Wal-Mart has "strength and momentum" in its international division, Duke said in a company statement.

"We will continue to focus on emerging markets with strong growth potential, as well as established markets that we believe have the potential to deliver consistently strong returns," he said.

McMillon believes those markets in Asia, as he told Fortune, are "some of our most productive units. We're really excited about our units in China and have a big opportunity to grow there."

Wal-Mart in September established a regional Asia headquarters in Hong Kong. The office oversees Wal-Mart operations in mainland China, India and Japan. Staff, including Vicente Trius, president and CEO of Wal-Mart Asia, also identify new business opportunities throughout Asia.

China could one day have more stores than the 4,100 stores that are in the United States, McMillon said.

Shares of Wal-Mart (NYSE: WMT) closed at $55.54 Wednesday, down 48 cents. The share price ranged from a $63.85 high to a $43.11 low in the past 52 weeks.

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