Wal-Mart -- lotsa changes

There have been a steady parade of changes at Wal-Mart lately -- starting it seems with the agency-search debacle a couple months back, but more likely in response to flattening comp-store results, the changes of direction in terms of the chain's positioning, and bad news from overseas (the closures in Korea and Germany, poor results in UK).

In short, things have not been happy in the House that Sam Built.

My own opinion (admittedly an outsider with no specialized knowledge of what's going on) is that Wal-Mart has lost focus -- their foreign ventures and attempts to move upscale seem to have distracted them from their core competencies and left them looking like they're floundering.

I've listed most of the bad news above. The good news would be that they are taking action. Whether the actions are the right ones or whether it's just more floundering only time will tell.

Here's a BusinessWeek article saying that the move of the chief marketing officer, John Fleming, to head up merchandising is an attempt to "ease the deep tensions between the two divisions that have hurt the retailer's turnaround efforts."

Underlying the problems in marketing, though, was a divide with Wal-Mart's powerful merchandising division, the unit responsible for buying and displaying goods within stores, company insiders say. Before Fleming became marketing head, the marketing department played second fiddle to merchandising and was jokingly referred to as the place Wal-Mart employees went to retire. It didn't even have a consumer research arm.

Fleming went to work expanding the department, adding consumer research and marketing strategy staffs, and creating a branding unit to define how Wal-Mart should position itself with consumers. Fleming called the department "a startup in the world's biggest turnaround."

Fleming's aimed to have the ascendant marketing department use its consumer research to help guide the merchant's product choices. But Wal-Mart's merchandising division wasn't accustomed to taking direction from marketing and the two departments didn't work together effectively, people familiar with the situation say. The merchants were slow to follow marketing's lead on product direction. For example, marketing had pushed denim for fall, but the theme wasn't apparent in stores.

And Advertising Age reports on additional moves, including the head of the US stores division to international and his replacement by the head of Sam's Club.

In all, the latest round of recent or pending management moves involves 10 to 15 people, according to one person close to the company.

It will be interesting to see if the recent round of problems is just a bump in the road, fixable by moving some people around, or if Wal-Mart has topped out and will now settle into slow decline.

Do they just have a cold, or have they contracted the dreaded, terminal Sears Disease?