Wal-Mart Stores Cuts Nearly 30 Directors and Midlevel Managers in China
Cuts Come as Retailer Trims Costs, Seeks to Improve Sales
Wal-Mart Stores is cutting nearly 30 directors and midlevel managers in China.BLOOMBERG NEWS
BEIJING— Wal-Mart Stores Inc. is cutting nearly 30 directors and midlevel managers in China, where the retailer is pushing to contain costs and improve slumping sales.
The cuts include two senior-level directors while the rest come from midlevel management, said Ray Bracy, spokesman for Wal-Mart’s China division. He said the moves were part of an overall restructuring effort in China, but declined to give further details.
Wal-Mart has around 200 midlevel and senior-level managers in China.
The Bentonville, Ark., retailer has been grappling with slower sales in China, where it faces tough local competition and consumers who are reining in purchases of goods, ranging from soda to toiletries, amid a broad economic slowdown and austerity push.
For its third quarter, Wal-Mart reported a 0.8% drop in China sales. Executives attributed the decline to deflation and government austerity measures. Wal-Mart doesn't break out hard sales figures by country.
Executives have said the Chinese government’s clampdown on excessive consumption at its state-owned enterprises has damped consumer confidence overall. In particular, it has cut into gifting purchases—such as gift-cards and boxes of moon cakes associated with an annual autumn moon festival—that previously lifted retail sales.
Retail sales in China grew 12% in the first 10 months of the year, decelerating from 13% growth in the same period of 2013, according to China’s National Bureau of Statistics.
Wal-Mart, which has about 400 stores in China, announced last year it would cut stores that were underperforming and restructure its business for further expansion.
Mr. Bracy said the company is sticking by a plan to have around 480 Wal-Mart stores in China by the end of 2016.
In Wednesday trading, Wal-Mart shares rose 3 cents to $84.98 in New York.
