Bentonville, Ark. In an unexpected move, Wal-Mart Stores Inc. announced Friday chief executive Lee Scott will retire in February and be replaced by the head of its international division, Mike Duke. Scott will continue as chairman.
Duke, 58, will take over the reins from Scott, 59, effective Feb. 1. Duke also becomes a member of the board of directors effective immediately. The company is expected to name Duke's replacement before he leaves his role as president of Wal-Mart International.
The move comes a week after the retailer said third-quarter profit rose 10% as shoppers hunting for discounts snapped up early Christmas promotions. It also comes as Wal-Mart, which is expanding in countries around the globe, plans to shift more than half of its international capital-spending budget to faster-growing emerging markets in five years.
“This management change occurs at a time of strength and momentum for Wal-Mart,” said Rob Walton, chairman of the Wal-Mart board of directors, in a statement. “Our overall management team has never been stronger. We are confident that the strategy we have in place is the right one for future success and Mike has been actively involved in developing and executing this strategy. We are also pleased that our succession and management-development process continues to develop leaders internally.”
Additionally, Wal-Mart said Eduardo Castro-Wright, 53, was promoted to vice chairman, adding to his current titles of president and chief executive of Walmart U.S. He will take over the company's global-procurement operation.
The international-business unit is Wal-Mart’s fastest-growing division. Its profit rose 11% during the third quarter, while U.S. profit rose 7%.
Duke 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 United States.
"Mike Duke is a highly-respected executive both domestically and internationally, with broad experience throughout the company, having successfully led Wal-Mart's Logistics Division, U.S. operations, and International operations," Walton said. "He understands retail and appreciates the complex global environment in which we operate. He is committed to the culture of Wal-Mart, its mission, and to our associates and customers."
Before joining Wal-Mart, Duke had 23 years of experience as an executive at Federated Department Stores and May Department Stores, which today comprise Macy's Inc.
Scott joined Wal-Mart in 1979 as assistant director in the logistics division, and became president and chief executive in 2000. Among his accomplishments, Scott is widely credited for spearheading Wal-Mart’s commitment to environmental sustainability.
“It has been an honor to serve as the CEO of Wal-Mart Stores, Inc. and to work with our dedicated Wal-Mart and Sam’s Club associates around the world,” said Scott. “And it has been a privilege to lead the company Sam Walton created, a company that continues to live the mission and culture he established.”