Dive Brief:

• As part of a major overhaul of its U.S. operations amid a profit drop, Wal-Mart Stores Inc. is shuffling its merchandising team, according to an internal memo obtained by the Wall Street Journal.

• Marybeth Hays, SVP of home for Wal-Mart U.S., will become chief merchandising and marketing officer for Walmart China, replacing John Furner, who returns to the U.S. in a yet-undetermined role. Hays’s U.S. job will be shared by Wal-Mart merchants Scott McCall and Terry Price. Rick Hays, VP of hardware and paint, will become VP of general merchandise for Sam’s Club China.

• Laura Wilkin, SVP of replenishment, will become SVP of flow strategy and systems innovation. SVP of strategy, pricing, planning and modular development Scott Pleiman will take on replenishment as part of his duties.

Dive Insight:

Wal-Mart Stores Inc. has been battling inventory issues, out-of-stock problems in stores and “shrink,” for a few years, and noted the problems in its latest quarterly report. To combat them, the retailer has been working to keep more inventory at warehouses rather than in the back room of stores.

It’s not clear where Wal-Mart’s problems are though, or which problems they’re solving with these moves. These issues could be the result of not having enough in-store personnel, or people without adequate training. The company has recently boosted its base hourly wages and says it will provide more training. 

But the move could be a way to clear out chaotic back rooms, which are not only difficult to keep track of but also are vulnerable to theft. 

“Have you seen the back room at a Supercenter recently?” Ron Margulis, managing director of RAM Communications and a member of the “Retail Wire Brain Trust,” told Forbes. “It’s more chaotic than Penn Station at rush hour (especially during the past month).”

And it may also be part of the company’s plans to boost e-commerce.

“Either Walmart feels that the flexibility of shipping is such that they can quickly replenish the back room to prevent out-of-stocks, or they are so thin on in-store personnel that putting products in the back room actually makes things worse in terms of moving products to the front of the store,” Kenneth Leung, director of enterprise industry marketing at Avaya, also part of the Retail Wire group, told Forbes. “Certainly it gives them some added flexibility to reallocate products to e-commerce when it is in central warehouse. I guess we will find out how good Walmart’s delivery system is, and whether we start seeing more out-of-stocks in the store as a result.”

In any case, Wal-Mart is taking the search for solutions to the top.