Will Walmart Lose Its Spot as No. 1 Global Retailer?

By Douglas A. McIntyre Published Mar 5, 6:30AM EST

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It seems impossible that Wal-Mart Stores Inc. (NYSE: WMT), with more than 2 million employees worldwide and global sales of $470 billion, could ever be dethroned as the number one retailer in the world. However, another large retail company claims it can do just that.

According to The Wall Street Journal:

Fast Retailing Co. Chief Executive Tadashi Yanai said the Japanese company can overtake its fast-fashion rivals to become the world’s largest retailer by 2020 even without acquisitions.

“I believe we can be on our way to number one in the world,” said Mr. Yanai. “I am very positive about our organic growth.”

Yanai is doing little more than dreaming — probably. His belief that organic growth is enough to make Fast Retailing much larger is unlikely. So, it may be, if he has a shot to reach his goal, it will have to be through M&A activity — or perhaps through growth in the world’s most populous nation — China

The Wall Street Journal also reports that Fast Retailing plans to have 1,000 stores in China by 2020. That by itself could lift the company’s revenue by tens of billions of dollars a year. But China by itself will not get Yanai to his goal. The company will not have a large presence in the United States, which far outruns China in consumer spending. There have been rumors that Fast Retailing will buy J. Crew. By itself, that would not be a big enough move to get it much of a footprint in America.

Beyond its China operations, Fast Retailing will have to take the huge risk of M&A activity to get it deeper into America. It will be difficult to find a company that is “affordable.” That is, unless Fast Retailing is willing to face the long odds of buying a deeply troubled retailer like Sears Holdings Corp. (NASDAQ: SHLD) or J.C. Penney Co. Inc. (NYSE: JCP). Each is available for a small ratio of market value to revenue. But, each is considered beyond repaid.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.