Sam’s Club’s Executive Shuffle
Wal-Mart Stores Inc. last Friday said that Brian Cornell, who is credited with helping Sam’s Club regain its sales momentum, is leaving the company. Rosalind Brewer, who ran Walmart’s eastern division, will take over as the warehouse club’s CEO.
Mr. Cornell, who formerly ran Michaels Stores before taking over Sam’s in 2009, is returning to the Northeast for family reasons.
“My wife and I want to put down roots in the Northeast and live in the same ZIP code as our children — not just occasionally seeing them in hotels and restaurants,” Mr. Cornell said in the company’s news release.
Under his watch, food and private label offerings were expanded and a refocus to cater to more-upscale customers helped Sam’s compete better against its more successful rival, Costco. In the third quarter, Sam’s comps increased 5.7 percent, dwarfing the 1.3 percent increase at U.S. Walmart stores.
With the success he brought to Sam’s Club, Mr. Cornell, 52, was considered a potential future CEO at Walmart by insiders at the company, according to the Wall Street Journal. But they also said that given his short time at Walmart, he would likely have had to go on to run Walmart’s U.S. or international division before being eligible to one day succeed Walmart CEO Mike Duke.
“Brian has done a terrific job at Sam’s Club,” Mr. Duke said in a statement. “He is a strong, high-energy leader who has delivered great results and leaves behind a business with outstanding momentum.”
Ms. Brewer, 49, was most recently president of the Walmart’s U.S. east business unit, where she was responsible for more than $100 billion in annual revenue, representing almost 1,600 stores and more than 500,000 associates. Prior to Walmart, Ms. Brewer worked for Kimberly-Clark, eventually becoming president of a key business sector in 2004.
“I have seen her develop into a talented merchant and retailer,” said Mr. Duke. “She has strong strategic, analytical and operational skills and has successfully managed a large and complex business”.
Ms. Brewer’s hiring received some mainstream media attention because she became both the first woman as well as the first African-American to lead one of Walmart’s business units. Walmart also promoted two other women: Gisel Ruiz to chief operating officer for Walmart U.S., and Karenann Terrell to chief information officer.
Discussion Questions
Discussion questions: What do you make of the CEO changes at Sam’s Club? What positive changes have you noticed at Sam’s under the leadership of Brian Cornell? What should be the next strategic focus for Sam’s or the warehouse channel overall?
I have always been intrigued by the modest branding and marketing efforts, and I wonder if the changes will bring about new efforts to more aggressively reach out to and educate shoppers on the value proposition and uniqueness of the discount club approach vs other big-box options.
Also, with so much focus on multichannel engagement and strategies for retailers to compete against pure e-commerce rivals, I would expect to see more options to tie together online tools with the store experience.
Sam’s Club, under Brian Cornell, might say to the oncoming and capable Ms. Brewer, “I beg your pardon, you may not recognize me. I’ve changed a lot under Mr. Cornell.”
Nonetheless, we say to Sam’s Club, those improvements still haven’t let you match the skills and results that are driving Costco with its established and enlarging customer base.
So the challenge for Rosalind Brewer will be to enhance Sam’s appeal to a broader base. We shall watch to see how Ms. Brewer can lead and navigate the sizable U.S. Sam’s Club in today’s challenging warehouse club waters.
There is nothing good about losing a star quarterback. Had they hired someone with coaching skills and game-day savvy, there would be far less concern for the transition.
One exciting aspect of this necessary change is that it offers a lot of options. Exploring how SAMS could be used as a platform to take on internet discounters more successfully is a needed visit that will pay big if operated by those in the know.
Bad news. Anytime a key executive would rather be somewhere else, strictly because of location, indicates poor organizational behavior. This is especially true among talented, successful leaders. Sam’s Club should be doing whatever is necessary to ensure that their executives stay in-place and continue to lead their company to success.