Wal-Mart Overhauls Senior Management

Castro-Wright Expected to Be Replaced as CEO of U.S. Stores Division

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A correction has been made in this story. See below for details.

BATAVIA, Ohio (AdAge.com) -- Wal-Mart Stores is undertaking its most sweeping management shakeup in years -- and perhaps in its history -- according to people close to the company who expect Eduardo Castro-Wright, CEO of the Wal-Mart Stores Division in the U.S., to move to an international position and be replaced by Doug McMillon, now CEO of the Sam's Club unit.

In all, the latest round of recent or pending management moves involves 10 to 15 people, according to one person close to the company.

Fleming wasting no time
An internal memo obtained by Advertising Age indicates John Fleming, the company's newly minted chief merchandising officer and former chief marketing officer, has already put his imprint on Wal-Mart merchandising, overhauling much of the leadership team there on Friday.

It's not clear how high up the management changes will ultimately go. The level of Mr. Castro-Wright's new post isn't clear, and if it involves succeeding Mike Duke, vice chairman of Wal-Mart International, that could entail a bigger change among the company's top three leaders, who also include CEO Lee Scott and John Menzer, vice chairman of the U.S. business.

A spokesman for Wal-Mart Stores declined to comment, and said executives were difficult to reach as they gathered in Kansas City, Mo., for an annual year-end meeting with supplier executives.

Serial drama
The moves are the latest in what appears to be a serial drama of management upheavals as Wal-Mart tries to rekindle slowing top-line growth. Last week the retailer announced an overhaul of Wal-Mart Stores' marketing and merchandising areas -- including the move of Mr. Fleming and promotion of Stephen Quinn to chief marketing officer from the chain's No. 2 marketing position.

Mr. McMillon, 40, is widely liked and respected by suppliers and others close to the company, some of whom hailed his promotion. Sam's has been a bright spot in a relatively bleak picture of late for Wal-Mart in the U.S. Sam's beat its much bigger sibling both in same-store and absolute sales growth in recent months after trailing in those areas for years.

Mr. Castro-Wright, 51, has been less popular among suppliers, having led, among other things, a renewed effort to increase inventory turns, which has increased pressure on sales. But he is believed to be well-regarded by senior Wal-Mart management and the company's board.

Unprecedented in scope
While Wal-Mart personnel moves have become increasingly common in recent years around the time its Jan. 31 fiscal year closes, this year's moves are seen by people familiar with the company as unprecedented in their scope and number.

One person close to the company said Pat Curran, 42, now executive VP-store operations of Wal-Mart Stores, would succeed Mr. McMillon as CEO of Sam's Club, which would make her the first woman to lead one of Wal-Mart's operating units. But that move wasn't corroborated by other sources, and Wal-Mart declined to comment.

Among other moves reported by people close to Wal-Mart: John Westling, who had been senior VP-general manager of consumables (covering most package-goods categories), will move to head the giant unit's inventory-replenishment operations, where they believe he'll work to expand efforts to reduce the retailer's inventory.

The Wal-Mart spokesman confirmed that Mr. Westling had changed jobs, but not the nature of his new job.

McCall takes over consumables
A Jan. 26 memo from Mr. Fleming and Bill Simon, exec VP-professional services and new-business services, outlined six additional changes among top executives in Wal-Mart's merchandising department. Among them, Scott McCall, who had headed the chain's toy merchandising, will take over Mr. Westling's oversight of consumables, except over-the-counter drugs.

Paul Beahm, who had headed home merchandising, will move to senior VP-pharmacy merchandising, which includes OTC, and will report to Mr. Simon.

The memo doesn't indicate who will take over for Mr. Beahm, but does name new VPs of merchandising for toys (Laura Phillips), consumer electronics (Kevin O'Connor) and media, games and services (David Porter). They'll report to Gary Severson, who remains senior VP-entertainment.

According to the memo, the company has not yet named an exec VP for grocery, essentially a successor for Doug Degn, who the company last week announced will retire after a transition period of a few months.

Wal-Mart did not confirm or deny the authenticity of the memo.

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CORRECTION: An earlier version of this story used the wrong picture of Eduardo Castro-Wright, CEO of the Wal-Mart Stores Division in the U.S. We regret the error.
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