New Wal-Mart CEO's international experience key
Duke, 58, has headed Wal-Mart Stores Inc.'s international division since 2005, making key moves including pulling out of some countries and expanding in others, such as Brazil and India. Before that, he held various senior logistics, distribution and administration posts since he joined the company in 1995.
That makes Duke a "capable" executive who knows the company "inside and out," Goldman Sachs analyst Adrianne Shapira said.
Duke became chief executive and president of the Wal-Mart Stores U.S. division in 2003 and switched over to head the international division two years later as the Bentonville, Ark.-based retailer increased focus on strategic international growth.
International sales account for about a quarter of the company's revenue.
In 2006, Duke was involved in major changes in the company's international strategy, including exiting the German and South Korean markets, where the company was faltering before Duke took over. Duke said at the time it wasn't possible to achieve the "size and results" the company was seeking in the two countries.
Last year, the company took full ownership of its money-losing Japanese subsidiary and introduced a turnaround plan, remodeling stores, keeping inventory low and focusing on low prices. It has also expanded in Brazil and India.
"Mike has had a pretty stellar career at the company," said Morgan Keegan & Co. analyst John D. Lawrence. "He has done a good job in assessing the situation in international, making some decisions over there. Those were tough decisions."
Meanwhile, as economic conditions in the U.S. continue to deteriorate, Wal-Mart Stores has said it is shifting its focus to emerging markets. Over the next five years, it plans to allocate 53 percent of its capital to emerging markets, with the remainder in mature markets. Over the past five years the company allocated about 67 percent of capital to mature markets such as Britain and Canada.
Duke's international experience is particularly important, Shapira said, given the recent shift in investment toward the division and its positioning as the main driver of growth.
Before joining Wal-Mart, Duke spent more than two decades as an executive at department-store operator at May Stores and Federated Stores Inc., now known as Macy's Inc.
Sandy Kennedy, president of the trade group Retail Industry Leaders Association, where Duke served on the board until he took the international post, said Duke was an "outstanding retailer, very strategic, but also just a fine human being."
Duke, who has two daughters and son with wife Susan, graduated from Georgia Tech with a degree in industrial engineering in 1971. Following his first job at Rich's department store in Atlanta, he stayed in the department-store business for 23 years at May and Federated. He joined Wal-Mart in 1995.
During a 2003 address at his alma mater, Duke said Wal-Mart's story is "not about the big numbers, but it is about one customer and one associate at a time improving their standard of living."
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