BOSTON — Wal-Mart has fired three company officers, including the senior executive responsible for its 3,000 U.S. stores, for violating “well-known company rules,” spokeswoman Mona Williams said.
Williams declined to reveal the names of the officials, or specify the infractions. But the Benton County Record in Wal-Mart’s Bentonville, Ark., hometown, citing unnamed sources, reported that James H. Haworth, executive vice president, operations, Wal-Mart Stores division, was among those dismissed.
Wal-Mart, the world’s biggest retailer, defines “officer” as positions of vice president and above. It has 200 such employees in a workforce of more than 1.6 million. Most of the fired employees worked at Wal-Mart’s headquarters in Bentonville. The firm also fired four nonofficer employees, Williams confirmed.
The decision, less than two weeks before Christmas, comes during a rocky holiday selling season for Wal-Mart, which has struggled with pricing and lackluster merchandise. Disappointing Black Friday sales caused the firm to lower its December same-store sales projections to a 1 to 3 percent gain from 2 to 4 percent, embark on a new ad campaign and slash prices on key items.
A.G. Edwards retail analyst Bob Buchanan said in a research note that the terminations were “of concern to us inasmuch as we view Jim Haworth as a high-caliber executive.”
The pre-holiday timing “couldn’t be worse,” Buchanan said in an interview. “They are really struggling this holiday. The merchandise is dull, including home fitness and apparel. They’ve also got some problems at the front of the store. They need to be checking people out faster.”
Although Williams would not confirm Haworth’s departure, his biography was removed from the senior officer profile section of Wal-Mart’s Web site on Wednesday. Haworth could not be reached for comment.
The firings had little impact on the stock, which dropped 0.67 percent to close at $53.01 per share in New York Stock Exchange trading.
“Once the infractions came to light we dealt with it quickly,’’ Williams said. “This is not a common action.’’
Williams said no time line had been established for replacing those who had been dismissed, but cited “depth” in the executive ranks.
This story first appeared in the December 16, 2004 issue of WWD. Subscribe Today.
A 20-year veteran, Haworth started at Wal-Mart after graduating from Central Missouri State University in 1984 as an assistant manager. He got the executive vice president title in 2001, which put him in charge of about 3,000 domestic stores.
Although the firings are unusual in recent history, the company has weathered worse. When Wal-Mart founder Sam Walton parted company with his second-in-command, Ron Mayer, in 1976, roughly a third of the company’s senior management followed Mayer out the door. Company insiders dubbed the event the “Saturday night massacre,” and in his autobiography Walton wrote “things looked pretty grim.”
The company has hit another bumpy stretch in the last 18 months, which have seen relatively sluggish same-store sales gains coupled with high-profile fights to get stores built in key expansion markets such as Los Angeles. Wal-Mart has embarked on a public relations campaign to depict the company in a positive light after a spate of lawsuits, including the largest-ever gender discrimination class action case.