Wal-Mart Stores Inc. (WMT:US) Vice Chairman Eduardo Castro-Wright, a key figure in a bribery probe at the company’s Mexico operations, retired on July 1.
The Justice Department and U.S. Securities and Exchange Commission are probing allegations the Bentonville, Arkansas- based retailer approved as much as $24 million in bribes as recently as 2005, when Castro-Wright ran the Mexico business. Castro-Wright retired on schedule, David Tovar, a Wal-Mart spokesman, said in an e-mail.
His departure marks the end of an 11-year career at the world’s largest retailer. Besides presiding over rapid growth in Mexico, where officials allegedly paid bribes to open stores faster, Castro-Wright also started Project Impact in the U.S., a failed plan to focus on fast-selling products while thinning the assortment Wal-Mart was long known for.
“A lot of founder Sam Walton’s precepts were hard to find under Eduardo,” Bernard Sosnick, an analyst with Gilford Securities Inc. in New York, said today in a phone interview. “Since he has gone, Sam’s maxims are at work again.”
Castro-Wright, 57, led Wal-Mart de Mexico SA from August 2001 until February 2005. He encouraged the use of bribes so the retailer could grow in Mexico so quickly that rivals wouldn’t have time to respond, The New York Times reported in April. The company has about 2,088 stores in Mexico out of more than 10,000 locations worldwide, according to its annual report.
Castro-Wright was tapped to be chief operating officer of Wal-Mart’s stores in the U.S. in February 2005, the number two job at a division that then accounted for about two-thirds of total revenue and three-quarters of operating profit.
“Eduardo is a proven leader who has helped Wal-Mart Mexico achieve outstanding results,” Mike Duke, at the time head of Wal-Mart International, said in a January 2005 statement announcing Castro-Wright’s move to the U.S. In 2006, Fortune magazine named Castro-Wright one of “Corporate America’s Next Generation of Leaders,” alongside Procter & Gamble Co.’s Robert McDonald.
Castro-Wright was promoted to vice chairman in 2008, putting him on a short list to succeed then-CEO Lee Scott. Duke was named chief executive officer the following year. In June 2010, after Project Impact coincided with falling same-store sales and customer traffic, Castro-Wright moved to California to run online operations and global sourcing.
Born in Ecuador into a family that operated a local retail chain, Castro-Wright received a mechanical engineering degree from Texas A&M University in 1975 and began his career at RJR Nabisco Inc.’s Latin American and Asian units. He later moved to Honeywell International Inc., where he was president of Honeywell Transportation and Power Systems Worldwide.
Last year, Texas A&M University’s Center for Retailing Studies at its Mays Business School awarded Castro-Wright its “Visionary Merchant Award,” where he was honored for “positioning the company well for the future.”
Wal-Mart shares rose 1.4 percent to $70.63 at 12:06 p.m. in New York. The shares had risen 16 percent this year through July 2.
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