Sam's Club Chief Executive Officer Rosalind Brewer is leaving her position after being in charge of the warehouse division of Wal-Mart Stores Inc. for five years.
The retailer announced the leadership change Friday in a filing with the U.S. Securities and Exchange Commission. The filing said Brewer, 54, will retire Feb. 1 from a role she has held with the company since February 2012 and will be replaced by John Furner, who is currently the members-only segment's chief merchandising officer.
Wal-Mart Stores Inc. CEO Doug McMillon said in an internal memo that Brewer "has decided she wants a new challenge."
"We will miss Roz -- both professionally and personally -- and we're grateful for her many contributions as she departs as the longest serving President and CEO in Sam's Club history," McMillon said in the memo to employees.
Brewer earned $8.4 million in fiscal 2016, according to the company's proxy statement. Furner's salary has not been disclosed.
McMillon complimented Brewer for leading Sam's to three consecutive quarters of improving same-store sales and driving innovation in the clubs.
Some of the notable developments under her leadership included digital programs like the drive-thru club pickup service, which allows customers to order items online and pick them up at the store. More recently, Sam's Club introduced its scan-and-go program throughout its 650 stores. The service gives customers the chance to skip checkout lines by scanning items as they shop and paying for them through a mobile application.
Brewer's "transformation" plan for the $57 billion business also included the consolidation of its private label brands. Improving the quality and value of food and merchandise were part of efforts to drive membership and increase sales.
Same-store sales at Sam's Clubs were down 0.5 percent in the fourth quarter of fiscal 2016 compared with the previous year, but sales increased 0.1 percent, 0.6 percent and 1.4 percent, respectively, in the first three quarters of fiscal 2017.
McMillon said it's a sign that Brewer is "leaving Sam's with momentum." She will receive payments totaling $1.9 million in multiple installments through January 2019 as part of her retirement agreement.
Edward Jones retail analyst Brian Yarbrough said Brewer's efforts never led to a significant bump in same-store sales, which continue to lag behind competitor Costco Wholesale Corp. So Yarbrough said he wasn't surprised to see the company announce a change at the top of the wholesale division Friday.
"Unfortunately, we're in a business where results matter," Yarbrough said. "Take nothing away from her, but I just think the results at Sam's Clubs have been pretty subpar and they've definitely underperformed the competition. ...
"They've tried some new tactics with getting more members to join, but it just seems like for some reason they are a step or two behind Costco and they cannot catch up."
But Carol Spieckerman, a retail consultant and president of Spieckerman Retail, said Costco shouldn't be narrowly defined as Sam's Club's primary competitor. She said Sam's, under Brewer's guidance, made an important shift in acknowledging and leveraging that reality with some of its initiatives.
"Innovations like drive-thru pick up and scan-and-go were direct attempts to go up against non-club retailers that have traditionally been top-of-mind for convenience and fill-in trips," Spieckerman said. "Streamlining Sam's private label portfolio was another step in the right direction."
Spieckerman said she believes Brewer "laid a good foundation," but acknowledged that there is more work to be done and opportunities to explore at Sam's. She pointed to the potential of closer relationships among Wal-Mart, Walmart.com, Jet.com and the recently acquired ShoeBuy.com.
Brewer's responsibilities now fall on Furner, 42, who joined the company as an hourly store employee in 1993.
Prior to being named chief merchandising officer at Sam's Club, Furner was chief merchandising officer for Wal-Mart China from January 2013 to October 2015. He also held senior vice president roles in home and apparel, global sourcing, proprietary brands and merchandising solutions.
McMillon said Furner has "climbed the ladder of opportunity at Walmart" and provides a "unique set of experiences and a deep understanding of our company" to his new role as Sam's Club CEO.
"In John, I see someone who loves the company and our associates, has learned the business from the bottom up and across, and has the desire to lead change which is so necessary in today's environment," McMillon said. "He'll be a great CEO of Sam's."
Business on 01/07/2017