January 6, 2017 / 2:58 PM / 8 months ago

UPDATE 2-Wal-Mart unit Sam's Club CEO to retire next month

(Adds details; updates shares)

By Siddharth Cavale

Jan 6 (Reuters) - Wal-Mart Stores Inc said Rosalind Brewer, the longest-serving CEO of its warehouse chain Sam's Club, would retire next month, and would be succeeded by company veteran John Furner.

Brewer, the first woman and the first African American to run a top Wal-Mart business, will leave on Feb. 1 to take on a "new challenge", according to an internal memo seen by Reuters.

Brewer, 54, a champion of diversity within the workplace, came under fire after she alluded that she saw a problem with an all Caucasian male staff at a Sam's Club supplier.

The comments, made during a CNN interview in December, was seen by some critics as promoting workplace racism, triggering hashtags "#boycottsamsclub" and "#boycottracistsamsclub".

Under Brewer's five-year tenure as CEO, Sam's Club's sales rose 5.6 percent to $56.2 billion. The unit's same-store sales growth beat analysts' estimates in the past three quarters.

Furner, currently the chief merchandising officer at Sam's Club, joined Wal-Mart in 1993.

Furner, 42, has served in various capacities, including as the chief merchandising officer of Walmart China.

"In John, we see someone who loves the company and our associates, has learned the business from the bottom up and across, and has the desire to lead change which is so necessary in today's environment," Wal-Mart's Chief Executive Doug McMillon said in the memo.

Sam's Club, the smallest of Wal-Mart's three business units, operates membership-only warehouse clubs in 48 states in the United States and in Puerto Rico. The business accounted for about 12 percent of the company's fiscal 2016 net sales.

The world's biggest retailer's shares were down 1.3 percent in afternoon trading on Friday and was the top percentage loser among Dow stocks. (Reporting by Siddharth Cavale in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)

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