The big wheel keeps on turning.
said Friday that its president and CEO, David Glass, will step down immediately, handing the reins at the world's biggest retailer to COO Lee Scott. Glass, 64, will continue to sit on the board for at least a year.
The succession, if not the timing of the announcement, was expected by Wall Street, and Wal-Mart's shares barely budged. "Wal-Mart is pretty good about transitions," says Robert Hagstrom, manager of the
Legg Mason Focus Trust, which holds Wal-Mart shares. "This has been in the works for some time."
The only part of the announcement that initially gave analysts pause was the fact that Glass is stepping down immediately, rather than after a formal transition period. Wal-Mart spokesman Jay Allen says that Glass has spent the last "year or two" working on a succession strategy, and that the timing of the announcement was his decision. Earlier this month, the company said that Thomas Schoewe, CFO of
Black & Decker
, would take on the same job at Wal-Mart, a position left unfilled for six months.
With its domestic and international operations humming along, e-commerce looms as a new challenge for Wal-Mart's new management. The company launched its revamped site this year, and recently said it is joining with
, a venture capitalist firm, to establish
as a separate company based in Silicon Valley. Analysts say the company could go public as soon as this year.
Scott, 50, is a 20-year 'Mart veteran, spending most of that time in the logistics area. Wal-Mart's distribution and supply-chain systems are acknowledged as the best in the industry; in November, the company said it was planning to move inventory so quickly that products are sold before Wal-Mart pays its vendors, effectively having negative working capital. "They're using the
model," says Hagstrom.
Scott became president and CEO of the Wal-Mart stores division in 1998 and last January was named vice chairman and COO of the company. "He's someone who can bring it all together," says Richard Church, analyst with
Salomon Smith Barney
, who gives Wal-Mart shares his highest rating. (His firm has done recent underwriting for the company.)
During his tenure, Glass expanded Wal-Mart's general merchandise operations and developed warehouse discount retailer
. He also took Wal-Mart on the road, opening stores in Europe, Asia and South America. Presumably you can't buy
2 Live Crew
albums there, either.