Wal-Mart Stores Inc. has lost two of its top executives in China, potentially complicating the retail giant’s expansion in a key growth market where other foreign companies have also faced challenges recently.
Roland Lawrence, Wal-Mart’s chief financial officer for China, and Rob Cissell, its chief operating officer in the country, resigned “to explore other opportunities,” Wal-Mart spokesman Anthony Rose said in a telephone interview. The Bentonville, Ark.-based company hasn’t yet announced replacements.
The resignations come as the world’s largest retailer is expanding operations in China’s competitive and crowded retail landscape. The company, which entered the Chinese market in 1996, operates more than 330 outlets in China and is aiming to open new stores in smaller cities, Ed Chan, chief executive of Wal-Mart’s China operations, said at a meeting for investors in March.
Wal-Mart has had difficulties finding the right locations and enough employees to staff the stores, Mr. Chan said.
Wal-Mart’s China sales of $7.5 billion last year accounted for just 2 per cent of its $420 billion global revenue. But China and other emerging markets like Mexico and Brazil have offered Wal-Mart growth that it isn’t seeing back in the U.S. market. Wal-Mart’s first-quarter revenue rose 4.4 per cent to $104.19 billion due to a 12 per cent climb in international sales. U.S. sales edged up 0.6 per cent, while same-store sales in the U.S. declined 1.1%.
Other foreign retailers have hit turbulence in China over the past year. Home Depot Inc., the largest U.S. home improvement retailer by sales, closed its last store in Beijing in January, saying it would focus on developing its China business in two other cities where growth is faster. In February, Best Buy Co. closed its nine Best Buy-branded locations in China. And in March, Mattel Inc. shuttered its six-story Barbie store in Shanghai amid weak demand.
Wal-Mart and its biggest competitor, France’s Carrefour SA, were fined a combined 9.5 million yuan ($1.4 million) in February by China’s National Development and Reform Commission for deceptive pricing practices at some of their stores around the country. Carrefour operates around 180 hypermarkets in China.
Source : Wall Street Journal