Quite the Chinese recall.
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Welcome to see such punchy prose from an executive, surely.
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
Sometimes they are also enough to knock $10bn off your market cap six years after taking place.
Walmart shares were down as much as 4.9 per cent on Monday after the NYT’s investigation into the silencing of a bribery probe in Mexico, before recovering a bit. They were down 4.3 per cent at pixel time, while shares of Walmart Mexico were off 11.4 per cent. Read more
Walmart is to take a controlling stake in Yihaodian, the Chinese e-commerce retailer, Reuters reports. The 51 per cent stake will deliver Yihaodian’s logistics network across Chinese cities into Walmart’s hands, and also follows a series of leadership changes at the US retailer’s China unit. Walmart first announced plans to take a minority stake in Yihaodian in May last year. Yihaodian sales hit Rmb2.7bn ($429m) in 2011, compared with Rmb805m in 2010, the FT says. The Chinese consumer ecommerce market is dominated by homegrown online retailer Taobao.
Walmart’s China chief executive and a senior human resources executive for the country are leaving the company, the latest upheaval to hit the US retailer’s operations in China, reports the FT. The company on Monday said that Ed Chan, chief executive for China, and Clara Wong, senior vice-president for human resources in China, had resigned “for personal reasons”. Walmart said Scott Price, president and chief executive of Walmart Asia, would serve “as interim leader” of Walmart China, where the US retailer has 353 stores in 130 cities. A company spokesman declined to give any further detail.
Walmart’s China operation has lost both its chief executive and a senior human rights executive, amid restrictions on its business from Chinese authorities in the city of Chongqing, Bloomberg reports. The resignation of the CEO, Ed Chan, follows more than a dozen store closures and the arrest of several employees in recent weeks, Reuters says. Chongqing officials say they are investigating the possible mis-selling of pork. A US executive in Beijing said the measures taken in Chongqing against Walmart might be part of an effort to put pressure on the US in light of recent Congressional criticisms of China’s currency, the FT reports.
Walmart, the US retailer, has closed 13 stores in south-western China after police detained a number of store managers following allegations that employees labelled ordinary pork as organic, the FT reports. The company would not say how many of its store managers in the city of Chongqing had been detained but said it was co-operating with an investigation by the Chongqing Administration of Industry and Commerce. “We believe the closure has come about as a result of the recent investigation in some of our stores in Chongqing” due to the alllegations of mislabelled pork, Walmart said in a statement. The stores are to remain closed for 14 days, which would allow it time “to focus on implementing corrective actions.”
Walmart has been fined Rmb2.69m ($423,548) by authorities in China for mislabelling ordinary pork as organic and will close seven stores in the city of Chongqing for a fortnight, the FT reports. Walmart China confirmed it was co-operating with the investigation by the Chongqing Administration of Industry and Commerce and that some of the company’s employees had been detained by the Chongqing Public Security Bureau. The US retailer declined to comment on the fine, which was disclosed by Xinhua, the official Chinese news agency, quoting government officials in Chongqing. In a statement, Walmart said: “We believe the closure has come about as a result of the recent investigation in some of our stores in Chongqing” due to the issue of mislabelled pork. It said the closure of the stores would allow it time “to focus on implementing corrective actions.” The company said it sent a task force to the southwestern Chinese city several days ago to work with the authorities.
The US Supreme Court has handed a significant victory to business by ruling that a sex discrimination case against Walmart cannot go ahead, a decision that could make it harder to file class action lawsuits against corporations, the FT reports. The court threw out a class action in which six plaintiffs who complained of discrimination at Walmart had sought to represent a group of current and former female employees estimated to number up to 1.5m. The case was of vital importance to business because it was the first time in more than a decade that the court had considered the standards that plaintiffs needed to meet to mount class actions. The US Chamber of Commerce had warned that if the case was allowed to go ahead it would unleash an “avalanche” of class action litigation, potentially hobbling business with a range of employment, antitrust and product liability lawsuits.
The US Supreme Court has handed a significant victory to business by ruling that a sex discrimination case against Walmart cannot go ahead, a decision that could make it harder to file class action lawsuits against corporations, writes the FT. The court threw out a class action in which six plaintiffs who complained of discrimination at Walmart had sought to represent a group of current and former female employees estimated to number up to 1.5m.
Walmart is to defend itself at the Supreme Court in the world’s largest sex discrimination case, which has the potential to transform the future course of legal disputes between big business and workers in the US, reports the FT. The court on Tuesday will hear arguments on whether the case can go forward as a class-action lawsuit. Walmart argues that the class action brings together claimants who have too little in common to be included in a single suit, Reuters reports. Court precedent is on Walmart’s side. While the Supreme Court could affirm the class action and allow it to proceed to the merits, little short of a truly ‘seismic’ compensation ruling threatens Walmart’s finances, Reuters adds.
Walmart, the world’s largest retailer by sales, said on Tuesday that comparable sales at its US stores fell for the seventh consecutive quarter, despite predicting a turnround in sales declines at its largest and most profitable business, the FT says. The retailer said comparable sales – at stores open at least a year – fell by 1.8 per cent against the same period last year. Net sales in the US also fell by 0.5 per cent in the three months to the end of January, to $71.1bn. Walmart’s overall fourth-quarter earnings of $5.02bn, however, were boosted by continuing strong growth in its international business.
Walmart, the largest US retailer by sales, has scored a significant breakthrough in its multiyear campaign to remove political obstacles to further US growth, winning the public endorsement of first lady Michelle Obama for a new food nutrition and health initiative, reports the FT. The effort will see the retailer reformulating its Great Value private label foods to reduce sodium and sugar content, with targets that will increase pressure on other food manufacturers to follow suit. But Walmart also included a commitment to building stores in “underserved communities”, a reference to an urban growth strategy that is facing political opposition from labour unions. While it operates more than 4,000 stores across the US, Walmart has virtually no presence in the major cities of the west coast and north east. The new healthy food drive was announced on Thursday at a community centre in a low-income area of Washington. It was attended by the first lady, who also leads an administration initiative to fight childhood obesity. Mrs Obama said she was “thrilled” about the plan, adding: “I believe this charter is a huge victory for folks all across this country.”
A&P, one of the country’s oldest retail names, has filed for Chapter 11 bankruptcy protection following mounting losses at its 395 stores in the north-east and mid-Atlantic states, the FT reports. The company said in its filing that it was seeking more time to carry out a reorganisation of its regional supermarkets business in 2011, and was carrying $3.2bn in debt as of September, Reuters says. A&P has bled cash since a 2008 $1.3bn acquisition of Pathmark Stores. Regional grocery chains, most of which are unionised, have been struggling since the 1990s, when the emergence of discount chain Walmart led to a wave of industry consolidation, adds the FT.
Walmart has offered to buy a 51 per cent stake in Massmart, South Africa’s third-biggest retailer, for 16.5 bn rand ($2.34bn), Bloomberg reports. Massmart will maintain its listing on Johannesburg’s bourse, the news agency added. In a statement Walmart said it had “irrevocable” support for its 148 rand per share offer from shareholders representing 35 per cent of Massmart, while another 15 per cent had offered “non-binding” support to the bid. Walmart is hoping that South Africa will act as a base for expansion into African markets. Reuters adds that Grant Pattison, Massmart’s chief executive, has said the company would retain its South African management after the deal.
Walmart has proceeded to the next stage of bidding for Indonesian retailer Matahari Putra Prima PT’s $1bn sale of its hypermarket business, Reuters reports. Sources said that Casino Guichard-Perrachon and South Korea’s Lotte Shopping Co will also join Walmart in making bids. The sale of Matahari has previously attracted interest from private equity company Carlyle Group but they will not proceed to the second round, the news agency reported, and it was unclear whether South Korea’s Shinsegae Co is still present. Meanwhile the FT reports that Walmart, the largest retailer by revenues, saw strong sales and earnings in its expanding international business during the third quarter, helping offset continuing sluggish demand at its US stores. The retailer’s overall sales increased 2.6 per cent to $101.2bn.
Walmart plans to offer free shipping on its website, with no minimum purchase required, until 20 December Thursday’s New York Times reports. Walmart, the world’s biggest retailer by sales, launched the offer in a bid to attract customers over the upcoming holiday season. “Everyone’s trying to figure out how we can serve a customer that’s trying to save every penny they can,” said Steve Nave, senior vice president and general manager of Walmart.com, the newspaper reported. The US giant said it will not raise prices or press shippers, including UPS and FedEx, to absorb the costs. However there are concerns that the move, which may create an expectation for free shipping among customers, could make it harder for smaller rivals to survive.
Mike Duke, the chief executive of Walmart, has delivered a rare high-profile plea to the Indian government to open up the country’s retail sector to direct foreign investment, the FT reports. The plea comes days before the arrival in the country of President Barack Obama and a large US business delegation. Mr Duke told a meeting of the Federation of Indian Chambers of Commerce and Industry in New Delhi that Walmart, the world’s largest retailer, understands the government’s “calibrated approach” to the opening of the sector. But he repeated the argument that allowing international retailers to own and operate their own stores would bring a range of benefits to India, including the modernisation of food distribution and the growth of small and medium supplier businesses.
Mike Duke, chief executive of Walmart, sought to reassure investors on Wednesday that the pursuit of international growth by the world’s largest retailer would not come at the expense of investment returns, the FT reports. Speaking at a meeting of analysts and investors, Duke said the retailer saw “tremendous upside” for future growth in emerging markets such as China, Brazil and Mexico, but that “every decision, every investment that international is looking at has a focus on growth and returns”. His comments follow the retailer’s R32bn ($4.6bn) offer for Massmart, South Africa’s third-largest retailer, which led several Wall Street analysts to question the likely returns on the investment, that would be its largest ever single deal in an emerging market.
Walmart offered more than $4bn for South African wholesaler Massmart Holdings on Monday as the world’s largest retailer seeks to expand in fast-growing Africa, reports Reuters. Massmart, South Africa’s third-largest listed store group by value, owns chains such as Game and Makro and has been among the most aggressive South African retailers in expanding into the rest of sub-Saharan Africa, and now operates in 14 countries. There had long been speculation that Walmart would try to expand in Africa, with Massmart seen as a likely target. The two companies said Walmart had offered R148 per share for Massmart, valuing the company at R28.9bn ($4.1bn) or a premium of nearly 10 per cent above the share price at Thursday’s close of R134.75.
Greenpeace has accused Walmart, Tesco, Carrefour and other international companies of buying products from Indonesia’s Asia Pulp & Paper, which it claims is destroying rainforests in violation of promises not to threaten endangered species. APP is the world’s fourth largest paper and pulp company, and is owned by Indonesia’s Sinar Mas conglomerate, the FT said.
US companies are indicating a desire to buy back their own shares at the highest rate in months, as record levels of cash pile up on balance sheets, reports the FT. Companies announced 27 new buy-back programmes last week totalling $18.5bn. the most since February, according to data provider TrimTabs. Walmart alone announced a $15bn plan, which included $4.7bn from a previous buy-back.
Walmart, which has stores aimed primarily at lower- income shoppers, reported its fourth consecutive quarter of falling US comparable sales on Tuesday with a 1.4 per cent drop during its first quarter. The results, the FT says, underline the uneven recovery in US consumer spending, suggesting that purchases by low-income Americans were still lagging the pick-up in expenditure by middle-class shoppers.