Wal-Mart says COO Simon to lead US operations, Castro-Wright becoming head of global sourcing

Wal-Mart names operating chief Simon as new US CEO

BENTONVILLE, Ark. — Wal-Mart Stores Inc. said Tuesday that Bill Simon is taking over as president and CEO of its U.S. operations, replacing Eduardo Castro-Wright who is shifting to lead the retailer’s e-commerce unit Global.com and its global sourcing division.

Simon, 50, has served as chief operating officer of Walmart U.S. and previously led global business development at Chili’s Grill owner Brinker International. He takes the lead as U.S. Walmart stores are struggling with declines in customer traffic. Wealthier patrons who turned to the world’s largest retailer during the Great Recession appear to be trading back up, and stubbornly high unemployment and gas prices are still squeezing its main clientele.

CEO Mike Duke said the shift allows Castro-Wright to relocate to California to be with his family following his wife’s recent heart transplant. He added that the move will help Wal-Mart focus on growing its international Web retail operations at a faster pace and expand online sales.

International sales helped drive the company’s 10 percent boost in first-quarter net income. With lackluster sales in the U.S., the world’s largest retailer is increasingly counting on its international business to boost growth, and saw strong gains in the first quarter in China, Brazil and Mexico markets. Overseas revenue accounted for about 25 percent of the company’s total sales during the period.

Castro-Wright, 55, served as president and CEO of Wal-Mart de Mexico from late 2002 until early 2005, when he joined Walmart U.S. He became vice chairman in November 2008, responsible for Walmart’s U.S. stores and the company’s global procurement operations.

Castro-Wright will continue to serve as vice chairman and will transition to his new position by Aug. 1.

Jefferies analyst Daniel Binder said Simon was the logical choice to succeed Castro-Wright. He expects Simon to likely only “fine-tune” Wal-Mart’s corporate strategy, not make major change.

“Clearly Bill has big shoes to fill, but we think he has good judgment,” Binder wrote in a note to clients. “He has been a driving force behind improvements in store execution, including faster, friendlier customer service, and cleaner stores. Bill is also credited for developing the $4 prescription drug program, which has been a resounding success.”

Both Simon and Castro-Wright earlier this year signed two-year non-compete agreements with the Bentonville, Ark., retailer, according to a regulatory filing. In exchange for signing the contracts Castro-Wright received a grant of 37,016 shares of performance-based restricted stock and Simon received 35,772 restricted shares.

Shares fell 82 cents to $48.75 in afternoon trading, as the broader markets tumbled on a sharp drop in consumer confidence and fresh concerns over euro-zone fiscal problems.