Wal-Mart’s $640 Million Sneeze
Posted on Dec 23, 2008
Wal-Mart will pay as much as $640 million to settle 63 lawsuits around the country alleging that the retailer had exploited its workers. The payout could add up to less than 0.1 percent of the company’s revenues this year.
The agreement comes five weeks before Mike Duke takes over from outgoing Chief Executive Officer H. Lee Scott, who has overseen a sales resurgence and sought to burnish Wal-Mart’s image among environmentalists, politicians and labor groups. Wal-Mart may pay from $352 million to $640 million, potentially less than 0.1 percent of its $378.8 billion in revenue in 2008.
“In terms of money, it doesn’t move the needle at Wal-Mart, but cleaning it up is going to be viewed as a positive by everyone, including Wall Street,” Howard Davidowitz, chairman of Davidowitz & Associates Inc., a New York-based retail consulting and investment banking firm, said in a phone interview. “They don’t want to pass this along to the next CEO.”
Flickr / Brave New Films