Wal-Mart stores said yesterday the head of its Canadian division would take over the retailer’s international unit next year, succeeding Doug McMillon, who was named CEO of the company last month.

David Cheesewright (51), who also runs Wal-Mart's Europe, Middle East and Africa operations, takes the job at a time when Wal-Mart International's profitability lags that of the overall company, and the unit is the focus of a costly bribery inquiry.

Mr Cheesewright is credited with bringing the super-centre format to Canada, and overseeing the integration of the Massmart acquisition in Africa and the Netto acquisition in Britain, where he started his Wal-Mart career in 1999.

"We view Cheesewright as a natural choice for the job given the breadth and depth of his experience with Wal-Mart International," Cowen & Co analyst Faye Landes wrote in a note.

Mr Cheesewright will assume his new position on February 1st, the same day Mr McMillon takes the CEO post.

Mr Cheesewright faces a number of challenges. Wal-Mart International’s profitability has been hurt by its aggressive expansion. Last quarter it contributed 29 per cent of overall sales but only 23 per cent of operating income.

Wal-Mart is now scaling back its expansion in key markets. It is closing about 50 underperforming stores out of hundreds it has in the major emerging markets of Brazil and China.

The integration of Wal-Mart’s 2012 acquisition of South Africa’s Massmart chain is proving to be challenging because of the difficult economy there.

Mr Cheesewright will also have to manage the fallout from a US department of justice inquiry into whether Wal-Mart paid bribes in Mexico to obtain permits to open new stores.

There is also an inquiry into whether executives covered up an internal inquiry into the payments. – (Reuters)