Wal-Mart’s board of directors have elected Doug McMillon as the company’s next CEO.
Doug McMillon, who unloaded trucks at a Wal-Mart distribution center for hourly pay while working his way through college, will be the next CEO of the world’s largest retailer.
Wal-Mart Stores Inc. of Bentonville announced Monday that its board of directors elected McMillon, 47, to succeed Mike Duke, 63, as president and CEO, effective Feb. 1. McMillon was also elected to the company’s board of directors, effective immediately.
“This leadership change comes at a time of strength and growth at Walmart,” said Rob Walton, chairman of Wal-Mart’s board of directors, in a news release. “The company has the right strategy to serve the changing customer around the world, and Doug has been actively involved in this process. The company has a strong management team to execute that strategy.”
McMillon is currently president and CEO of Walmart International, which has more than 6,300 stores and more than 823,000 employees in 26 countries outside the U.S. From 2006-2009, he was president and CEO of Sam’s Club, Wal-Mart’s warehouse club retailer.
McMillon began his career with Wal-Mart in 1984, unloading trucks at a distribution center.
“The opportunity to lead Wal-Mart is a great privilege,” McMillon said in a news release. “Our company has a rich history of delivering value to customers across the globe and, as their needs grow and change, we will be there to serve them. Our management team is talented and experienced, and our strategy gives me confidence that our future is bright.
“By keeping our promise to customers, we will drive shareholder value, create opportunity for our associates and grow our business,” he said.
As CEO of Walmart International, McMillon has been in command of the retailer’s fastest growing segment, one that was particularly important at a time when the U.S. economy was in recession and sales at the retailer’s domestic stores slumped.
In Wal-Mart’s most recent third quarter, Walmart International posted revenue of $33 billion, flat compared to the same time last year. For its most recent nine-month period, revenue was almost $99 billion, up 2 percent from the same period a year ago.
But the International division has also seen its share of growing pains. During the third quarter, Wal-Mart closed 50 underperforming stores in Brazil and China, two of its most important growth markets. The retailer was also forced to end a franchise agreement with Bharti Retail for the retail business in India, where Wal-Mart has struggled to get more of a foothold amid that country’s strict regulations regarding foreign companies doing business there.
International has also been dogged by allegations that the company violated the Foreign Corrupt Practices Act. The allegations surfaced in an April 2012 New York Times report that said Wal-Mart’s Mexican division paid more than $24 million in bribes so stores could be opened faster than if the company had gone through normal government channels. The article also said Wal-Mart learned of the allegations in 2005, but didn’t pursue them.
Wal-Mart has since by sued by shareholders and investigated by the Department of Justice and the Securities & Exchange Commission. Its own internal investigation and related activities have cost Wal-Mart at least $230 million through April 27 of this year.
According to Wal-Mart, Duke will continue as chairman of the executive committee of the board and, “in the tradition of his predecessors,” serve as an advisor to McMillon for one year. Wal-Mart said it would announce McMillon’s successor as CEO of Walmart International by the end of the fiscal year.