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Wal-Mart: Making nice with Obama?

In a surprise shakeup at America’s largest retailer, Lee Scott last week announced that he will step down as CEO of Wal-Mart after nine years at the helm, said Christopher Palmeri in BusinessWeek. He is being replaced by Michael Duke, the head of Wal-Mart’s international division. Duke, 58, “has indicated that he will shift more of Wal-Mart’s new-store focus to faster-growing emerging markets.” The retail giant has 3,200 stores outside the U.S., with annual sales of $100 billion.

There’s also a political subtext to Wal-Mart’s change at the top, said Suzanne Kapner in Fortune. The discount chain has prospered in part due to a low-wage, low-benefits business model that is detested by President-elect Barack Obama’s union supporters. “By ushering in a new CEO, Wal-Mart has an opportunity to clean the political slate.” Duke certainly will need to mend some fences. Prior to the election, “Wal-Mart discouraged employees from voting for Obama,” warning that their jobs could be jeopardized by the Democrat’s pro-union policies. “Good thing for Wal-Mart that Obama doesn’t appear to hold grudges.”

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Computers: Dell loses ground

Computer maker Dell Inc. continues to struggle, reporting last week that quarterly revenue fell 3 percent, to $15 billion, from a year ago, said Catherine Clifford in CNNmoney.com. That’s $1 billion short of analysts’ forecasts. Profits fell 5 percent, to $727 million. With revenues shrinking, the company has been slashing expenses and jobs, including 11,600 positions in the past 15 months. “We are going to be very aggressive on costs,” said Chief Financial Officer Brian Gladden. “It is the one level we can control.”

Commodities: Oil bounces back

Oil’s steep price slide appears to be coming to an end, said Brian Baskin in The Wall Street Journal, as crude-oil prices rose above

$50 a barrel this week, an 8.6 percent jump in a single trading day. The catalyst for the rally was the federal government’s latest rescue plan for a financial giant—Citigroup—which investors saw as a possible turning point for the sinking economy. But analysts don’t expect a quick return to $150-a-barrel oil. “There’s still a long way to go before market sentiment really changes,” said oil analyst Tom Bentz.

Investing: Buffett takes a hit

Warren Buffett has ignored his own warning that derivatives are “financial weapons of mass destruction,” said Erik Holm in Bloomberg.com. After losing $6.73 billion on derivatives in the third quarter, Buffet’s Berkshire Hathaway Corp. said last week it would provide detailed information about its derivatives holdings in next year’s annual report. Berkshire used the complex financial product to place $35 billion in bets that stocks would rise; their value has plunged with the stock market. Berkshire’s losses have investors wondering if the legendary “sage of Omaha” has, in the words of investment analyst Douglas Kass, “lost his groove.”

Luxury goods: Fine China, lousy outcome

Lenox Group, a maker of dinnerware, gifts, and collectibles, filed for Chapter 11 bankruptcy protection this week, “the latest company to succumb to the weak retail environment,” said the Associated Press. The company was known as Department 56 until 2005, when it purchased fine-china maker Lenox Inc. and adopted its name. Executives blamed the company’s troubles on the “excessive” debt it took on to purchase Lenox. The firm has secured financing to continue normal operations while it seeks a buyer.