Update 6:07 p.m. ET Nov. 14
Doug McMillon is going to be a tough act to follow.
Even so, retail experts said John Furner has the right disposition and experience to step into what is retail’s biggest job — chief executive officer of Walmart Inc.
Furner, 51, has run the company’s namesake division in the U.S. since 2019 and will get the top job on Feb. 1, the company said Friday.
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The retail giant presented him as a kind of link to a future that is defined to a much greater extent by artificial intelligence, which is remaking both how companies work and how consumers shop.
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If that sounds like a tall order, it’s on par with the challenge McMillon faced when he took over the corner office in 2014.
“When he took over that business, it was like people thought Walmart was going to be gone because Amazon was going to rule the world,” said Kirk Palmer, founder and executive chairman of search firm Kirk Palmer Associates.
“He was able to make the business more relevant than ever,” said Palmer, adding that he switched smoothly between technology, people, e-commerce, stores and more.
“This guy connects with his constituencies like nobody I’ve seen,” he said. “It makes me wonder if he doesn’t have ambitions along the way for something else. He’s on top of the game. The business is fantastic, he’s loved and adored. And he’s 59 years old. I do wonder, why now?”
But Palmer said he wasn’t surprised by the way the succession played out.
“Doug came in as an internal candidate,” he said. “Every company is going to purport to be consumer-centric, but Walmart maybe along with Home Depot, wins at that game, because it’s embedded in the company from [founder] Sam Walton.”
McMillon certainly seemed to have that embedded within him.
“It’s going to be the same with John Furner,” Palmer said.
TD Cowen analyst Oliver Chen said it was a “bittersweet change” that nonetheless was happening at “time of strength” for the retailer, which has been revving up its fashion business in recent years.
“The Doug McMillon chapter won’t be easy to follow,” Chen said, describing the CEO as “humble” but impactful. “Mr. McMillon’s expensive but, essential commitments to tech innovation are paying off.”
During his tenure, McMillon’s proved ready to make tough calls, even if they raised eyebrows at times, as was the case when he signed off on the 2016 acquisition of Jet.com for $3.3 billion.
Jet.com was a big deal for retail, although it was a tiny operation by Walmart’s standards. It ultimately seems to have brought more attitude than sales to the company, including a willingness to experiment. Walmart, for instance, toyed with direct-to-consumer fashion brands, buying Bonobos only to change direction and spin off the business.
And Jet.com was shuttered in 2020. But, as Chen said, “The acquisition helped jump-start Walmart’s e-commerce business, which turned profitable this year and grew over 25 percent on volume in 2Q.”
Under his watch, Walmart also refocused its international business, selling off its majority stake in British chain Asda and successfully navigated the pandemic, staying open as an “essential retailer.”
While McMillon is clearly leaving big shoes to fill, Furner is seen as ready to step into them.
He has run both the Walmart discount stores in the U.S. and Sam’s Club and Chen said he has a digital-first mentality, strong relationship with associates and a drive to innovate.
“Similar to Mr. McMillon, Mr. Furner has had to make difficult decisions during his tenure, including closing 10 percent of the club base at Sam’s,” the analyst said. “We also believe he has a similar servant-leader mentality and people/execution focus to Mr. McMillon.”
Neil Saunders, managing director of GlobalData, described McMillon’s retirement as “a small shockwave” for Walmart, but said the retailer will “start life under its new CEO in a very good state. While the company is huge, its humility and constant willingness to listen and improve give it the entrepreneurial spirit of a much smaller entity.”
The Walton family seems to feel much the same.
“John Furner is the right leader to guide Walmart into our next chapter of growth and transformation,” said Greg Penner, chairman of the retailer and son-in-law to S. Robson Walton, Sam Walton’s son.
“After starting as an hourly associate and being with us for over 30 years in a variety of leadership roles across all three of our operating segments, John understands every dimension of our business — from the sales floor to global strategy,” Penner said. “He has proven that he can deliver results while living our values. John’s six-year leadership of our Walmart U.S. business during a time of rapid change, marked by digital acceleration and strong associate engagement, has positioned us for continued success.”
While Walmart is a mammoth, publicly listed business, employing 2.1 million people and driving revenues of $681 billion, it is still controlled by the Walton family, which has grown ultra-rich serving up discounts to shoppers around the world.
Sam’s three surviving children, Rob, Jim and Alice Walton, are number 13, 14 and 16, respectively, on Forbes’ list of billionaires. That puts each of them ahead of Michael Bloomberg, Bill Gates and just about everyone else.
“Our family and board have stated many times that Doug was uniquely qualified to be CEO at the necessary time for Walmart,” Penner said. “Over more than a decade as CEO, Doug led a comprehensive transformation by investing in our associates, advancing our digital and e-commerce capabilities, and modernizing our supply chain, resulting in sustained, robust financial performance. He leaves Walmart stronger, more innovative, and better aligned with our purpose to help people save money and live better.”
McMillon, who has in the past given the family credit for enabling the company’s transformation, described leading Walmart as “a great honor.”
He also said Furner is the right leader for the next age.
“I’ve worked with John for more than 20 years,” McMillon said. “His love for our associates and this company runs deep. His curiosity and digital acumen combined with a deep commitment to our people and culture will enable him to take us to the next level. He’s uniquely capable of leading the company through this next AI-driven transformation. He’s a merchant, an operator, an innovator, and a builder. I know that our future is bright with his leadership.”
Walmart has been changing fast over the past decade.
It is no longer just a brick-and-mortar retailer, but a multifaceted company with a big e-commerce presence, an online marketplace, an advertising business and more.
Now — like the rest of the world — Walmart is trying to figure out just what AI means for its business and retail at large.
“As we enter a new retail era fueled by innovation and AI, our purpose and our people will continue to guide us,” Furner said. “Together, we’ll find new ways to serve customers, support our associates, and strengthen the communities we call home.”
Furner was also elected to the company’s board, where he will sit side by side with McMillon who will stay on as a director for another year to ease the transition.
Investors, who are semi-allergic to change when a business is working well, traded shares of Walmart down 6 cents to $102.48 on Friday.