Hefner Appointment Suggests Wal-Mart Eyes New Sam's Initiatives

Linda Hefner, newly appointed executive vice president of merchandising and replenishment at Sam's Club, has an interesting background and one that suggests the operation may be in line for a shake up.

Since joining Wal-Mart in spring 2007, Hefner has served as executive vice president and general manager of home, and she supervised the redesign of that department's merchandising. The project was significant. For at least five years, Wal-Mart recognized it needed a new display system in a home department that had become cramped, labyrinthine and out of step with the lower scale, more open lay outs that had evolved at its major competitor's stores. Wal-Mart had significantly improved its product offering, providing a wider range of products and more luxury items such as pima cotton towels, but it's displays didn't show off the improved assortment effectively. The company's redesigned home departments have lower display fixtures and airy aisles that have been a hit with customers. In reviewing March results, Wal-Mart cited home as achieving mid single digit comparable store sales gains despite less robust numbers generated by its stores overall.

Speaking at the Morgan Stanley Arizona Field Trip event early this month, Bill Simon, executive vice president and COO, Walmart U.S, told gathered investors before they visited one of the company's stores:

And as you tour the store, one of the areas that's probably the most obvious from a product clarity standpoint is our home area, where we've had some recent success. We've redefined and restated the 'good, better, best' proposition that we've had in this area by relaunching the three brands, Mainstays, Canopy, and Better Homes & Gardens, and you will see those in the store. And the product clarity along with the color this year, which is certainly on trend, is having a very big impact on the business.

Hefner looks like an executive who could jump into the top spot at the warehouse club if her recently appointed boss, Brian Cornell, does what other Sam's CEO's have done and moves into a senior executive position at Wal-Mart corporate. The division's former CEO, Doug McMillon, became president and CEO of Wal-Mart International in February, making way for Cornell.

Hefner's success in executing a big change at Wal-Mart stores and her diverse background suggests that the company wants to initiate some new ideas at the warehouse club division, which it does from time to time, often when management changes occur. Sam's has recently refocused on the small business customer, but Costco is challenging it there. Sam's, for its part, hasn't had the reputation for apparel that Costco has built nor the standing in the food business that both Costco and BJ's have achieved. While Sam's is unlikely to abandon its small business focus, Hefner and Cornell, who was CEO of the Michael's crafts retail chain and who held executive positions at Pepsico, have a wide range of experience they could apply in various ways at the warehouse club division in reworking the core operation or enhancing ancillary elements in food, apparel and home furnishings that appeal to consumer members, current or potential.