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marmar

(76,985 posts)
Sat Apr 6, 2013, 01:42 PM Apr 2013

Former Walmart District Manager Accuses Company of Widespread Inventory Manipulation


(The Nation) In 1996, Sylvester Johnson left his post as a commanding officer in the US Army and began a career managing logistics at Walmart’s corporate headquarters in Bentonville, Arkansas. Once there, he received a series of rapid promotions, eventually overseeing the HR management of over 26,000 employees in five states. He became friendly with Walmart executive Mike Duke, who became CEO in 2009. In 2002, Johnson received the Sam M. Walton Hero Award, a prestigious company distinction. In 2003, he moved to North Carolina where he oversaw eleven Walmart Supercenters. The company fired him in 2009 for allegedly giving orders to manipulate inventory counts, a claim Johnson denies.

Instead, Johnson believes he was ultimately terminated because he is black. He also alleges—in an interview with The Nation and in a federal discrimination lawsuit—that the company engaged in widespread inventory manipulation.

“We're talking about hiding tens or hundreds of millions of dollars in losses here—inflating the profits of a store, a district, a region, a division and ultimately the entire company,” Johnson told The Nation. In theory, such a practice could have artificially inflated the company’s profit margins and stock price, amounting to a form of federal securities fraud.

Johnson claims that during his tenure as a Walmart district manager he was pressured by the company’s high command to hide losses due to “shrinkage”—defined as lost or stolen inventory—in order for stores to appear more profitable than they really were. Throughout the course of over six hours of interviews with The Nation, Johnson maintained that top management set shrinkage targets for Walmart Supercenter stores under his supervision that were “not ethically attainable” and then used methods of “fear and intimidation” against him in an attempt to compel him to meet those targets. Shrinkage represents a loss to any firm’s bottom line. It is a major factor in retail profitability, costing US retailers an estimated $34 billion in losses annually, according to the National Retail Federation. ............................(more)

The complete piece is at: http://www.thenation.com/article/173689/former-walmart-district-manager-accuses-company-widespread-inventory-manipulation#



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Former Walmart District Manager Accuses Company of Widespread Inventory Manipulation (Original Post) marmar Apr 2013 OP
WHEN?? rsmith6621 Apr 2013 #1
Not soon enough, rsmith. nt Mnemosyne Apr 2013 #3
Effect was to 1) manipulate stock prices and 2) drive competitors out of business. SEC and antitrust leveymg Apr 2013 #2
So, Walmart pulls an ENRON? formercia Apr 2013 #4
Not that much happened to Enron, either... Quantess Apr 2013 #5
I'll say it: supernova Apr 2013 #6
is this why people are seeing empty shelves? because on the books, those products are still there? bettyellen Apr 2013 #7
Hmmm ... sounds like what happened to the ARVN ... eppur_se_muova Apr 2013 #8
well... similar results though, at some point the scheme has got to collapse. bettyellen Apr 2013 #9

leveymg

(36,418 posts)
2. Effect was to 1) manipulate stock prices and 2) drive competitors out of business. SEC and antitrust
Sat Apr 6, 2013, 02:30 PM
Apr 2013

violations simply have not been enforced against Walmart because the company has powerful politicians in its pocket in both parties.

Also, Walmart is China, Inc., so it's untouchable.

supernova

(39,345 posts)
6. I'll say it:
Sat Apr 6, 2013, 09:35 PM
Apr 2013

So Wal-Mart is a giant house of cards that will implode of its own ponderous weight. Maybe not now, or next week, but that option is definitely out there.

eppur_se_muova

(36,227 posts)
8. Hmmm ... sounds like what happened to the ARVN ...
Sun Apr 7, 2013, 01:46 PM
Apr 2013

(Army of the Republic of Viet Nam)

In Asia (and in Europe, centuries ago) the tradition was that commanders were given a payroll based on the number of men under their command; it was up to them to distribute the money. If a commander wanted to claim he had more men than he really did, he could pocket the difference. The problem was ... that when serious fighting broke out his troops were under strength, and tended to lose disastrously. If he was willing to bet that other units would come to his rescue, and didn't care too much about casualties, the temptation to skim the payroll proved irresistible to many, and the ARVN was slowly 'infiltrated' by non-existent troops.

Kind of a stretch comparing Wal-Mart to Viet Nam, I know, but ...

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