Wal-Mart Names Duke as Next CEO

By Anne D'innocenzio

NEW YORK -- Wal-Mart (WMT Quote), the world's largest retailer, unexpectedly announced Friday that its chief executive will retire in February and be replaced by the head of its international division.

The Bentonville, Ark.-based retailer said Mike Duke, 58, vice chairman of its international division, will take the reins from Lee Scott, 59, effective Feb. 1. Duke also becomes a member of the board of directors immediately.

Scott, who became president and CEO in 2000 and has been with the company since 1979, will continue as chairman of the executive committee of the board until January 2011, according to Wal-Mart spokesman Dave Tovar. He will also serve as an adviser to Duke until 2011.

Additionally, Wal-Mart says Eduardo Castro-Wright, 53, was promoted to vice chairman, adding to his current titles of president and chief executive of Wal-Mart U.S. He will take over the company's global procurement operation.

"We think the right time is now, a time of strength and momentum for the company," Tovar told The Associated Press. "Our strategy is sound, and Mike has been integrally involved in developing and executing the strategy."

Wal-Mart shares rose 22 cents to $50.88 as investors considered the news.

Tovar said the decision to name Duke was part of an "ongoing rigorous succession planning process." He declined to name other candidates who were considered.

The moves come a week after the retailer said third-quarter profit rose 10% as shoppers hunting for discounts snapped up early Christmas promotions.

Amid financial-market turmoil and a marked decline in consumer spending, Wal-Mart Stores has been one of the best performers as consumers trade down to discounters and hunt for bargains.

The international business is the company's fastest-growing division, and profit rose 11% during the quarter, while U.S. profit rose 7%.

Scott joined Wal-Mart in 1979 as assistant director in the logistics division. He became president and chief executive in 2000.

Duke, who joined the company in 1995 and has served in a variety of posts, including president and chief executive of Wal-Mart Stores division in the U.S., "understands retail and appreciates the complex global environment in which we operate," said Rob Walton, Wal-Mart's chairman.

Before joining Wal-Mart, Duke was an executive at Federated Department Stores and May Department Stores, which are now known as Macy's Inc., for 23 years.