Wal-Mart Makes High-Level Executive Changes In China

Wal-Mart is making three major management moves related to its operation in China, with the moves possibly tied to a rumored larger shift in employment at the retailer’s headquarter operations in Bentonville.

In a recent internal memo received Thursday (Aug. 20) by The City Wire, Wal-Mart announced that Marybeth Hays, senior vice president over the home category for Walmart U.S., will move to chief merchandising and marketing officer for Walmart China. In this role, she will oversee the management of merchandising, marketing, supply chain and financial services “to drive an integrated strategy that ensures sustainable growth” and report to Sean Clarke, CEO of Walmart China, the memo noted.

Hays joined Sam’s Club in 2009 as senior vice president over home and apparel. In 2012, she joined Walmart U.S. as senior vice president for apparel, where she was was part of an effort to expand several categories. Prior to Walmart, she held merchandising and marketing leadership roles with Lowe’s Home Improvement, Lexington Furniture and HanesBrands Inc. in addition to her professional experience.

The memo also says Rick Hays, who has served as vice president of hardware and paint for Walmart U.S., will take over as the general merchandise and merchandising officer for Sam’s Club China. He will report to Neil Maffey. Rick Hays has been a merchant buyer at Walmart for 35 years.

Clarke said both executives will relocate to China upon work authorization. Also in this shift, John Furner, will leave the role of chief merchandising and marketing officer for Walmart China and move to the U.S. for another job that will be announced soon.

Clarke praised Furner’s work in China.

“During this period, he centralized the buying functions to Shenzhen, and drove significant improvements in buying leverage and reduced organizational complexity. He has also overseen a similar journey of centralization in our replenishment and distribution network,” Clarke noted in the memo. “All of this work has translated into tangible results: improved profitability and price leadership in the market, leading to consistent and significant share gains.”

MORE CORPORATE CHANGES EXPECTED
Local Wal-Mart experts said the management shifts are not being done in a vacuum and could perhaps be a precursor to the rumored downsizing of the retailer’s corporate home office ranks in Bentonville that was first reported by The City Wire on July 10.

The City Wire learned last month that Wal-Mart is planning to downsize its home office head count with as many as 100 vice president or higher ranked jobs being eliminated by November. Estimates for the purge run as a high as 1,000 overall or, roughly 5% of the retailer’s corporate office workforce.

Cameron Smith, CEO of Cameron Smith & Associates, said last month that the layoff rumors continue to surface every day.

“This leads me to believe it will happen, and probably in a few weeks,” Smith noted in a July 27 email.

Smith is so confident of a pending layoff that he’s taken time to educate his staff of corporate recruiters and plan for what could be the biggest corporate downsizing by the retail giant since 2009 when 800 local jobs were eliminated.

“Based on the last layoff, we are bracing for a surge of phone calls, emails, and resumes. Please remember, these people are our neighbors and friends,” Smith noted in the memo to his recruitment staff.

Wal-Mart has neither confirmed nor denied the rumored downsizing. The retailer did say that like all companies do from time to time, it is evaluating its management structure.

The pending layoff was a not surprise to analysts like Brian Yarbrough of Edward Jones, who said most of retail is going through this kind of purge and it’s inline with what Wal-Mart CEO Doug McMillon is trying to accomplish in reducing expenses and shifting focus back out to the stores. McMillon told analysts on June 5 that he intended to shift more energy back to serving stores. He said the management structure had become too bureaucratic and bloated over time.

“There are no cash registers in the home office,” McMillon told analysts in the June 5 question and answer session that followed the company’s annual shareholder meeting.