US: Wal-Mart US chief resignation little surprise
The resignation of Bill Simon as the head of Wal-Mart's US division has come as little surprise
The resignation of Bill Simon as the head of Wal-Mart's US division has come as little surprise, an analyst has said, after being passed over for the CEO role last year.
The retail giant this morning (24 July) revealed it had replaced the CEO of its US division, Bill Simon, promoting Greg Foran into the position.
Simon, who has been in the role since June 2010, said he will be "transitioning out of the company".
Simon was said to have been earmarked by Wal-Mart's board late last year as one of two candidates, alongside now current CEO Doug McMillon, as a contender for the top job.
Janney analysts, however, said the resignation "does not come as a big surprise" given they had wondered whether he would stay for the long term after being passed over for the CEO position.
"Our belief is that it was Mr Simon's decision to leave Wal-Mart, and that this process began after losing the CEO job to Doug McMillon," the analysts noted.
"The new head of Wal-Mart US, Greg Foran, is a somewhat unknown quantity to Wal-Mart investors. He came to Wal-Mart in 2011 to run the China division, from Woolworth's in Australia, where he managed the 150 store Big W discount chain. The initial knock will be that he has no US experience, and that he has no experience running a company this size."
The analysts emphasised that these are "legit criticisms", considering the job he is about to begin.
Nonetheless, they added: "On the flip side, we think Wal-Mart believes they have identified a strong leader with retail expertise to take control of this US business.
"We anticipate there will be little change to the small store strategy, as that has been embraced by both the board, and the company leadership. There will be speculation that Mr Simon was forced out, which once again, we do not believe is the case. There have been some struggles at the US division, but we believe that has been as much a macro issue as anything else."
The analyst put paid to reports Simon was joining US retailer Target.
"There is rampant speculation about Target after Mr Simon's departure today. However, under the published non-compete agreement, he is not allowed to work/consult/render services to any retailer globally for two years. He can work in other industries, but not retail."
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