Advertise with fastmoving.co.za
 
 

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

ChainStoreAge.com - 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 ChainStoreAge.com 

Related News

SA's first citrus shipment arrives in China
13/06/2019 - 15:39
The historic shipment of 5 200 tons of citrus in a breakbulk vessel has arrived at Shanghai Port in the People’s Republic of China.

US jealousy sparked trade wars, says Chinese ambassador
21/05/2019 - 10:48
The US is jealous of China’s rapid economic growth and achievements in the past few years and was using the trade wars to frustrate and stall it, Lin Songtian, the Chinese ambassador to SA said.

Alibaba beats analyst estimates as recommendations boost sales
17/05/2019 - 09:38
The Alibaba Group posted quarterly revenue and earnings that topped analyst estimates as personalised recommendations drive consumer spending across its shopping sites.

Nestlé opens new research and development centre in Beijing
26/03/2019 - 10:08
Nestlé aims to accelerate trend-based innovation in China as it inaugurates a new research and development centre (R&D) in Beijing and a system technology hub in Shenzhen.

Global economic slowdown and trade war hit risk appetite
12/03/2019 - 11:18
More and more evidence that the global economy is turning for the worst and the more aggressive stance of the US on trade tariffs against China had led to a sudden turn-around in risk appetite across the globe.