Per media reports, Wal-Mart Stores’ (WMT - Analyst Report) South African subsidiary, Massmart, is undergoing a major change in its management. Grant Pattison — who steered the company for seven years as the Chief Executive Officer (CEO) — stepped down on Apr 10, 2014.
Pattison will be replaced by Massmart Chief Operating Officer, Guy Hayward, effective Jun 1, 2014. Pattison will continue to serve the company as a non-executive director until the end of 2014.
Pattison, who joined Massmart 23 years ago, was the main person behind the sale of majority stake of the company to Wal-Mart. The retail giant bought 53% stake in Massmart in 2011 for $1.58 billion (ZAR 148 billion) as part of its emerging market strategy. In his tenure, Pattison also helped the company enter the e-Commerce business which is helping it to maintain its share in the African market.
Massmart, based in Johannesburg, is a leading distributor of consumer goods and a retailer of general merchandise, home improvement equipment and supplies in the African continent. Massmart operates 290 stores in 13 countries in Africa, with the vast majority of its stores in South Africa.
Pattison is leaving Massmart at a the subsidiary’s most important segment — Game and Masscash— is undergoing challenges. Moreover, the company higher than planned investment combined with soft top lines has resulted in lower margins in the past few quarters.
Wal-Mart has significant exposure in the international markets, which makes it the largest retailer in the world. Currently, the company is expanding its reach in Brazil and China by reintroducing its ‘everyday low price’ strategy. The company intends to open 115 supercenter stores and 270-300 small-format stores in fiscal 2015 in many of the markets, including the U.S., Mexico and the U.K.
Wal-Mart currently carries a Zacks Rank #4 (Sell) Some better-ranked stocks in the consumer staples sector worth considering are Supervalu Inc. (SVU - Analyst Report) , Diamond Foods Inc. and Hanesbrands Inc.(HBI - Analyst Report) . All the stocks sport a Zacks Rank #2 (Buy).
Read the Full Research Report on WMTRead the Full Research Report on SVURead the Full Research Report on DMNDRead the Full Research Report on HBIZacks Investment Research