Advertise with

Wal-Mart hid real performance, inflated sales - China
Wal-Mart hid real performance, inflated sales - China

Wal-Mart hid real performance, inflated sales - China

RETAILER NEWS - Dec 12th 2014, 08:41

New York - Wal-Mart Stores Inc. has reportedly discovered discrepancies in accounting practices its China business was using that made performance look better than it really was. 

According to Bloomberg, shifty accounting practices included making unauthorised bulk sales to other retailers and even booking non-existent sales.

Bulk sales totalled at least $243 million and accounted for 4% of the profit Wal-Mart’s China operation reported in 2010. The impact on the business included lower margins, price mark-ups and fewer customers. It is not certain whether any activities in China are in the scope of an investigation the Department of Justice is conducting to see if Wal-Mart violated the Foreign Corrupt Practices Act.

Internal documents indicate Wal-Mart was concerned about possible discrepancies in fiscal reports from its China business as early as 2011 and had its legal team make inquiries in May 2014. Four senior China executives left the company in 2011, and in the past month, Wal-Mart has dismissed another 30 executives there. By the end of the year, Wal-Mart plans to eliminate 250 jobs, and open nine new stores and a new distribution centre in China.

In a statement to news outlets, Wal-Mart said it has implemented a prescriptive action plan in response to this discovery, including disciplinary actions and executive changes, and that none of these issues had a material effect on operations. Wal-Mart also said bulk sales are a common practice among retailers in developing markets.From 

Related News

Chinese spending hits record high on Singles' Day
13/11/2019 - 13:53
Chinese consumers spent a record amount on Alibaba platforms on Monday during the annual “Singles’ Day” buying spree, the world’s biggest 24-hour shopping event, which was launched with a glitzy show by US singer Taylor Swift.

How a US-China trade deal could benefit SA
11/11/2019 - 09:53
Africa is poised to become the “land of opportunity” for bond and equity investors should the US and China strike a trade deal, Bank of America (BofA) says.

Shoemaker Vans treads wearily as China fumes over Hong Kong
09/10/2019 - 13:20
US sports brand Vans has removed “a small number” of submissions in a sneaker design competition including one apparently giving a shout out to Hong Kong’s pro-democracy protests, as companies weigh the risks of angering China.

Alibaba set for new era as flamboyant Jack Ma departs
11/09/2019 - 09:33
Alibaba chair Jack Ma has stepped down from the Chinese group, leaving his handpicked successor a daunting task of steering the $460bn juggernaut at a time when the market for its core e-commerce business has slowed sharply.

Alibaba results beat estimates on cloud, e-commerce growth
19/08/2019 - 14:08
China’s Alibaba Group Holding Ltd reported better-than-expected quarterly revenue and profit, aided by growth in its e-commerce and cloud computing businesses.