Mac Naughton Exits Wal-Mart, Bio Removed From Website

The corporate shuffle continues at Wal-Mart with news that Duncan Mac Naughton, chief merchandising officer for the retailer’s U.S. division, has resigned just ahead of Black Friday. The news comes as the reporting structure within the marketing division recently shifted to the new Walmart U.S. CEO Greg Foran.

Mac Naugton’s bio has been removed from Wal-Mart’s corporate website. Rumors have swirled about Mac Naughton’s future with the company when Wal-Mart CEO Doug McMillon selected Foran for the U.S. CEO job. Local sources confirmed that Mac Naughton’s wife moved to Texas more than two months ago in preparation for his departure.

Wal-Mart confirmed Mac Naughton’s departure with the following statement from Foran:

“Today, I’m going to share with you leadership changes within our Walmart U.S. Merchandising organization. Duncan Mac Naughton, Chief Merchandising Officer – Walmart U.S., has decided to leave the company to pursue new opportunities. I’d like to thank him for everything he’s done for Walmart, and specifically our U.S. business.

Duncan’s departure has allowed me to relook at our Merchandising structure and the incredible talent within the team. At this time, I have chosen not to name a new Chief Merchant. I would like to use this opportunity to get closer to the Merchandising organization, so effective immediately, these leaders will report directly to me with the following responsibilities.”

The exit is not unexpected as Mac Naughton was once believed to be the shoo-in for the top U.S. job back in July when CEO Bill Simon parted ways with the retailer. McMillon’s selection of Foran for the job was a surprise, but has since won favor with Wall Street analysts given Foran’s aggressive operational strategy to improve U.S. sales.

“If you look at some of the recent talent selections in the C-suite it’s apparent that Wal-Mart is looking for something different, casting a broader net to gather people with varying experiences,” said Allan Ellstrand, expert in corporate leadership and professor at the University of Arkansas.

He added that if companies always do things the same way with the same people it’s hard to get different results. McMillon and Foran have each said they are after higher sales and better performing supercenters.

“Research shows that bringing in outside talent can be more contentious, but overall, companies that do it often get richer, better and more compelling results,” Ellstrand said.

Mac Naughton joined the company in 2009 as chief merchandising officer of Wal-Mart Canada and moved to the merchandising operations at the U.S. business in 2010.

While a popular figure, Mac Naughton and Simon struggled with sagging same-store sales for seven quarters. Those figures just recently returned to positive territory.

“I am a little surprised by the timing of the departure given this is the busiest time of year for a retailer,” Ellstrand said.

With Foran at the helm, all eyes will be on his leadership through the holiday season. Wal-Mart execs warned there could be negative financial pressure this quarter from the macro-economic standpoint, but they expressed hope that lower gas prices will equate to more merchandise sold.

The last time Mac Naughton spoke publicly was walking reporters through the Black Friday sales plan. During the October investor meeting, Foran fielded questions on Wal-Mart’s store operations in a candid manner. He admitted that inventory was too high, store staffing too short in some cases and there was much work to do in the area of “fresh” merchandising.

Mac Naughton chimed in to say that inventory was up largely because of new store additions and the Port of Long Beach issues which had the retailer ordering earlier than normal for the holidays. While the exchange was cordial enough, there was a sense of tension in Mac Naughton’s effort to justify the higher inventory levels.

“Looking at Bentonville, you can see Wal-Mart is looking for something different. It’s visible in their varying formats — pickup, convenience and explosion in Neighborhood Markets. Bentonville has become a lab for formats because they see this as the next potential growth engine. This innovation requires risk taking and diverse talent selection,” Ellstrand said.

He said an executive of Mac Naughton’s caliber and experience level has a great deal of options when he does finish his tenure at Wal-Mart.

Foran’s email to Wal-Mart employees also laid out other details in the management shuffle:

• Steve Bratspies will transition from his role as Executive Vice President (EVP) of General Merchandise to EVP of Food, which includes a strong focus on Fresh.
• Andy Barron will retain his role as EVP of Softlines and will assume responsibility for General Merchandise.
• Michelle Gloeckler will remain EVP of Consumables and U.S. Manufacturing.
• Labeed Diab, Senior Vice President, and his Health & Wellness team will transition to report to Gloeckler.
• John Aden will remain in his current role as EVP of Sales Innovation.
• Scott Huff will remain in his current role as EVP of Merchandising Operations.
• Jack Sinclair will be helping to transition the food business over the coming weeks before taking another role within Walmart, to be announced at a later date.

“Through Duncan’s leadership, we have focused on developing our merchants while also driving stronger collaboration between Marketing and Merchandising. This has made us more relevant to and focused on our customers. I also think it’s important to recognize Duncan for his leadership in re-engaging with our suppliers to develop joint business plans. This work is resulting in better and more localized assortment in our stores.

In partnership with the Operations team, Duncan has driven customer-centric innovations that we will build from to move forward. He’s always been, and I’m sure always will be, an advocate for our customers and our stores. We’ll miss his creativity and energy. Please join me in thanking him and wishing him well,” Foran concluded in the email.

Carol Spieckerman, CEO of NewMartketBuilders, applauded the retailer’s recent efforts to steer a new course.

“The great news is that Wal-Mart is doing a great job of incubating talent and building executive bench strength. The other side of that coin is that not every leader will complete their career trajectory at Wal-Mart. There are only so many slots. Wal-Mart is clearly heading in a fresh direction when it comes to its merchandising initiatives, particularly at the store level, and Greg Foran is messaging that clearly.”

Spieckerman said over the past few years, most retailers have found themselves dumping resources into playing a mean game of digital catch-up. As a result, some are awakening (or soon will) to the fact that their stores have gotten a bit musty.

“In this climate, Greg Foran is sending an important message by making it clear that the next wave of store-level block and tackle work will have Wal-Mart fully leveraging its physical assets at a time when doing so has never been more critical to the company’s overall omni-channel strategy. Although Wal-Mart may have gone ditch to ditch on some initiatives in the past, Foran isn’t talking about driving in-store efficiencies at the expense of digital, he is making sure that the stores don’t get lost in the equation. That kind of synergistic thinking will put Wal-Mart ahead of the pack as others struggle with balancing bricks and clicks,” Spieckerman said.