Wal-Mart’s (WMT.NYSE) seemingly sudden reversal of fortunes in China belies long-festering flaws in the retail giant’s performance, Bloomberg reported, citing internal documents and employees of the company. Practices including bulk sales to other retailers and some sales allegedly booked when no merchandise left the shelves made business appear strong even as retail transactions slowed and unsold inventory piled up. The bulk sales provided at least RMB1.6 billion (US$243 million) in sales and price markups accounted for 4% of gross profits in 2010 alone at 98 stores examined by Stanford Lin, who conducted the internal review and has since left Wal-Mart.
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