Bill Simon, who discovered he’d lost the competition for the top job at Walmart to Doug McMillon last November, is leaving the company after he spends six month consulting with his successor as president and CEO Greg Foran, who started in retailing as a teenager stocking grocery shelves in his native New Zealand.
Foran’s “experience includes merchandising and marketing — skills Wal-Mart hopes can ease criticism that its stores run out of regular items,” writes Reuters’ Siddharth Cavale.
Brian Sozzi, CEO and Chief Equities Strategist of Belus Capital Advisors, said that “while the change might have been brewing since McMillon took on the CEO role in February, he believes the ‘last straw’ was when Simon made what sounded like an earnings warning” in July 8 CNBC interview,” according to USA Today’s Jayne O’Donnell.
“Referring to unemployment numbers, Simon said it was ‘going to take a while for those numbers to balance out’ and singled out low- and middle-income consumers as being ‘still pretty challenged,’” O’Donnell writes.
Evidently public candor is a no-no, although a Walmart’s spokesman stressed that Simon was “leaving on good terms.” In a company-issued statement announcing the moves, Simon said, “This felt like the right time to move on and focus on my next opportunity.”
Writing on TheStreet.com, Sozzi calls the decision “long overdue given five straight quarters of declining U.S. same-store sales” under a hed that refers to O’Brien as “fumbling.”
In the New York Times, Customer Growth Partners president Craig Johnson tells Elizabeth A. Harris that “the company should have been building small-format stores rapidly over the last few years, instead of dabbling at it.”
On the positive side, Simon “led the turnaround of Wal-Mart’s business right after the recession by focusing on the company's roots of offering everyday low prices,” points out an AP story. “He also helped restore thousands of popular items that the company had stopped selling in an overzealous attempt to declutter the stores.”
In the Walmart statement, McMillon called the incoming Foran “one of the most talented retailers I’ve ever met,” citing his “depth of knowledge and global experience” as well as “his passion for fresh food, experience in general merchandise and commitment to e-commerce.”
Said Foran:” We must be fierce advocates for our customers, work meticulously to exceed their expectations and earn their trust every day.”
Bryan Gildenberg, an analyst at Kantar Retail, tells Bloomberg’s Renee Dudley, “Simon’s leaving is a natural completion of the McMillon/Duke CEO transition process rather than representative of a new shift in Wal-Mart’s direction.” He also pointed out that McMillon hired Foran when he was running the international business.
“From humble origins stacking supermarket shelves more than 30 years ago, the 53-year-old has risen to become one of the most high-flying executives this country has produced,” writes Richard Meadows in New Zealand’s Stuff.co.nz website.
The most recent example of his propensity to rapidly rise: he became CEO of Walmart China just six months after joining the company in 2011; his new promotion comes two months after he was named to head up Walmart Asia.
Foran himself quit the Woolworths supermarket chain down under (no direct connect to the former F.W. Woolworth’s five-and-dime empire in the U.S. except that it cadged the named) after he was passed over for the top job there in 2011 for another internal candidate, Grant O’Brien, Sue Mitchell and Eli Greenblat report in the Sydney Morning Herald.
“Greg is one of the many world-class retailers to have worked with Woolworths over the years,” O’Brien said yesterday. “Woolworths has long had a close relationship with Walmart and we look forward to continuing this into the future.”
Foran “had a long-running battle with [former Woolworths’ CEO Michael Luscombe] over profit margins in the wake of Wesfarmers acquisition of Coles in 2007, writes John Durie in The Australian.
“Luscombe elected to maintain high margins which allowed [its rival] Coles room to move and the decision is claimed by former Coles boss Ian McLeod as one reason he was able to gain momentum on his rival.”
Foran has never worked in the U.S. and may have to adjust some of his business jargon to reflect his new realities. “Moving the goals posts” — something consumers themselves are doing with alacrity — will still work, however: Foran's son Kieran, 24, is a star professional rugby player for the Manly-Warringah Sea Eagles and his older brother, Liam, was also a pro rugger.