Re­tailer keeps job in fam­ily

Wal-Mart picks Greg Pen­ner to re­place his fa­ther-in-law, Rob Wal­ton, as chair­man.

Los Angeles Times - - BUSINESS BEAT - By Sa­man­tha Ma­sunaga sa­man­­sunaga @la­

Wal-Mart is keep­ing it all in the fam­ily.

Wal-Mart Stores Inc. said Fri­day that Vice Chair­man Greg Pen­ner was re­plac­ing his fa­ther-in-law, Rob Wal­ton, as chair­man of the com­pany’s board of di­rec­tors.

Wal­ton, 70, the son of Wal­Mart founder Sam Wal­ton, will stay on as a direc­tor. He be­gan serv­ing as chair­man in 1992 af­ter his fa­ther died.

“I’m deeply hon­ored to fol­low in his foot­steps and rec­og­nize the deep re­spon­si­bil­ity I have to our as­so­ciates, all share­hold­ers and the board,” Pen­ner said of Wal­ton in a state­ment.

Pen­ner as­sumed his new role at the end of Fri­day’s an­nual share­holder meet­ing. He is only the third per­son to serve as Wal-Mart’s chair­man.

Pen­ner will face tough chal­lenges as the com­pany strug­gles to in­crease sales and at­tract new cus­tomers, said Brian Yarbrough, se­nior an­a­lyst at Ed­ward Jones. In ad­di­tion, Wal-Mart’s plan to in­crease gro­cery of­fer­ings — now more than 50% of its busi­ness — has back­fired af­ter tra­di­tional gro­cery stores low­ered prices and new ri­vals like dollar store chains moved into food.

Just as Wal-Mart dis­rupted the re­tail land­scape for mom-and-pop stores, the Bentonville, Ark., com­pany is now feel­ing the pres­sure from th­ese new ri­vals and Ama­

“They’ve def­i­nitely got some head winds they have to f ig­ure out,” Yarbrough said. “It’s hard to dif­fer­en­ti­ate them­selves.”

Wal-Mart has also faced crit­i­cism for not hav­ing an in­de­pen­dent chair­man.

Be­fore last year’s an­nual meet­ing, In­sti­tu­tional Share­holder Ser­vices ad­vo­cated for the elec­tion of a chair­man with­out fam­ily ties.

With Pen­ner at the helm, Yarbrough said he didn’t ex­pect much to change in terms of cor­po­rate de­ci­sion­mak­ing. Wal-Mart’s chief ex­ec­u­tive, Doug McMil­lon, came on board in 2014. Yarbrough said Pen­ner would prob­a­bly give the new man­age­ment team sev­eral years to show im­prove­ment.

Pen­ner, 45, has an MBA from Stan­ford. He be­gan his ca­reer as a cor­po­rate fi­nance an­a­lyst for in­vest­ment bank Gold­man Sachs and later served as a gen­eral part­ner at Penin­sula Cap­i­tal Part­ners in Detroit.

In 2005, he founded Madrone Cap­i­tal Part­ners, a pri­vate in­vest­ment firm that is af­fil­i­ated with Rob Wal­ton and other fam­ily mem­bers.

Pen­ner joined Wal-Mart’s board of di­rec­tors in 2008.

Shares of Wal-Mart fell $1.09, or 1.5%, to $73.06 on Fri­day.

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