Walmart's Bench Should Ease Worry on Tech Exits, Bernstein Says
(Bloomberg) -- Investors shouldn’t fret over the growing list of departing Walmart Inc. executives who were involved in tech and innovation, according to Bernstein.
Recent departures do not imperil Walmart’s future because “the people Walmart needs to be innovators were never the ones coming from outside,” analyst Brandon Fletcher wrote in a note on Friday. Outsiders with their “worldview” aren’t helpful to Walmart because getting anyone from either coast to understand or care about places like Grove, Oklahoma, is “nearly impossible,” according to Fletcher.
He recommends that Walmart look within to senior leaders from mid-America “who grew up poor, went to college locally, and understand the needs of customers while possessing the IQ and skill set on par with the coastal aristocracy.”
Walmart “culturally used to distrust smart people and outsiders” but recently has become seemingly “infatuated with smart people who are outsiders.” Fletcher expects the Bentonville, Arkansas-based retailer “will embrace smart people that are insiders who can develop Walmart-appropriate innovation” soon, but not today. “Watch this space,” he said. Walmart is rated market perform at Bernstein, with a price target of $99.
Recent departures include:
- Walmart announced in a blog post Thursday that Katie Finnegan, who co-led Walmart’s technology incubation arm, will leave June 7 to “begin a new adventure outside the company.”
- Chief Technology Officer Jeremy King left the retail giant last month to become the head of engineering at Pinterest.
- Flipkart Chief Executive Officer Binny Bansal resigned in November following an investigation into an allegation of “serious personal misconduct.”
- Jesse Kaplan, CEO of Parcel, the New York City delivery company owned by Walmart, also departed in November.
©2019 Bloomberg L.P.