Wal-Mart Shuffles Key Divisions After Weak Holiday Sales

Wal-Mart Storessaid it is reorganizing its U.S. marketing and merchandising operations as the world's largest retailer works to boost sales after a lackluster holiday season.

Wal-Mart named John Fleming, who previously led its marketing division and is a former Target executive, its chief merchandising officer.

Stephen Quinn was promoted to chief marketing officer. He joined Wal-Mart in 2005 as senior vice president of marketing and was previously chief marketing officer of PepsiCo's Frito-Lay division.

Wal-Mart has faced disappointing sales growth in the U.S. after store renovations disrupted its business and customers balked at some of its attempts to sell trendier merchandise, like skinny jeans.

Part of Three-Year Plan

The company said the latest management changes are part of a three-year plan that was outlined last year by Eduardo Castro-Wright, president and Chief Executive of Wal-Mart Stores U.S., to boost sales and profitability.

But the changes also follow the abrupt dismissal in December of Wal-Mart's head of marketing communications, Julie Roehm, after less than a year on the job. She was expected to help the retailer update its image and appeal to a wider range of consumers.

Her departure came amid speculation she faced scrutiny from the retail chain for accepting a costly dinner hosted by Interpublic Group of Cos.' <IPG.N> agency DraftFCB. Roehm has denied any inappropriate activity.

Speaking at a Reuters Newsmaker event in New York, Roehm said it was "great" Wal-Mart was taking steps to address the issues it is facing.

"I think it's clear that they realize there's more to be done," Roehm said of the management shifts.

Focus on Five Divisions

Wal-Mart said that its merchandise initiatives will be focused on five divisions -- grocery, entertainment, apparel, home and pharmacy & optical.

Four of the divisions will report to Fleming, who will also be responsible for a new organization focused on the customer experience and another new organization for planning, pricing and replenishment.

The pharmacy and optical division will continue to report to Bill Simon, executive vice president of professional services and new business development.

Doug Degn, executive vice president of food, consumables and hardlines, will retire, the retailer said.

Claire Watts, executive vice president of merchandising, will lead its apparel merchandising area and report to Fleming.