David Cheesewright, who also runs Wal-Mart's Europe, Middle East and
Africa (EMEA) operations, takes the job at a time when Walmart
International's profitability lags that of the overall company, and
the unit is the focus of a costly bribery probe.
Cheesewright, 51, is credited with bringing the supercenter format
to Canada and overseeing the integration of the Massmart acquisition
in Africa and the Netto acquisition in Britain, where he started his
Walmart career in 1999.
"We view Cheesewright as a natural choice for the job given the
breadth and depth of his experience with Walmart International,"
Cowen & Co analyst Faye Landes wrote in a note, calling him a
"one-man SWAT Team" for the unit.
Cheesewright will assume his new position on February 1, the same
day McMillon takes the CEO post.
The British executive will continue to have a home in Toronto and
will maintain a residence in Bentonville, Arkansas, where Wal-Mart
is headquartered, a spokesman said.
Cheesewright is not the only Briton in the top ranks of the world's
largest retailer. Earlier this year, it promoted Judith McKenna, the
chief operating officer of its Asda unit, to the role of executive
vice president of strategy and international development at Walmart
It is the second time in a month that Wal-Mart has promoted an
insider to a top job. Two weeks ago the retailer announced McMillon
would succeed Mike Duke as CEO.
Cheesewright faces a number of big challenges. For one, Walmart
International's profitability has been hurt by its aggressive
expansion. Last quarter it contributed 28.8 percent of overall sales
but only 23 percent of operating income.
Wal-Mart is now scaling back its expansion in key markets. It is
closing about 50 underperforming stores out of hundreds it has in
the major emerging markets of Brazil and China, the company said in
Walmart International is the company's second-largest unit, after
its U.S. operations, and had sales of $135.2 billion in 2012. It has
over 800,000 associates in the international division, the spokesman
[to top of second column]
On Cheesewright's watch, Wal-Mart undertook its biggest expansion in
Canada in 2012 after almost 20 years in the market, with new
supercenters aimed in part at keeping rival Target Corp <TGT.N> at
bay. But last quarter Wal-Mart's Canadian comparable sales fell.
The integration of Wal-Mart's 2012 acquisition of South Africa's
Massmart chain is proving to be challenging because of the difficult
Cheesewright also will have to manage the fallout from a U.S.
Department of Justice probe into whether Wal-Mart paid bribes in
Mexico to obtain permits to open new stores there, and whether
executives covered up an internal inquiry into the payments.
The department is also looking into possible misconduct by the
world's largest retailer in Brazil, China and India. Wal-Mart is
also conducting an international probe. It has so far spent $300
million on the investigations and changes to its compliance
The company is paying for lawyers to represent more than 30 of its
executives involved in a foreign corruption investigation, according
to people familiar with the matter, an unusually high number that
shows the depth of the probe.
Cheesewright's successor as Canadian chief will be named at a later
date, the company said.
Wal-Mart's shares were down 0.9 percent Tuesday afternoon.
(Reporting by Siddharth Cavale in
Bangalore and Phil Wahba and Dhanya Skariachan in New York; editing
by Kirti Pandey, Sriraj Kalluvila and John Wallace)
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