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Wal-Mart on PR offensive to repair image
( 2004-02-02 14:55) (Agencies)

Wal-Mart Stores Inc. is tired of critics who say it is a behemoth bent on destroying small-town America, driving down wages and shipping jobs to foreign sweat shops.  

Wal-Mart, Fortune magazine's "most admired company," is also among the most sued. Dozens of cases claiming sex discrimination and wage violations have stained its image. Editorials deplore how low-paid Wal-Mart workers must sign up for welfare to make ends meet.

Even men's magazine Playboy got in on the act, calling Wal-Mart's Bentonville, Arkansas, headquarters the "epicenter of retailing's evil empire."

But after years of abiding unflattering views, the empire is striking back with a tough new public relations strategy.

"No one likes to hear someone say something negative about their family," said Wal-Mart spokeswoman Sarah Clark. "There are some things out there that are totally inaccurate, and we're looking to set the record straight."

Officials at the world's largest company have started firing off letters to the editor responding to critical news articles and editorials. Once-reticent Wal-Mart executives are speaking out more in the hopes of cleaning up the world's largest retailer's stained image.

The company has also altered its advertising campaign to showcase women managers and others who have benefited from working there.

"We all want to defend our company," Clark said.

Besides top management, she said, store employees have taken it upon themselves to write letters, with no directive from headquarters.

"As we have become the most visible company in the U.S., we have increasingly become a target of criticism and even attacks," she said. "We are really in the position of protecting and enhancing an already good reputation, not trying to repair a bad one."


In the last few weeks, Wal-Mart's benefits manager wrote to The New York Times to explain the retailer's much-maligned health insurance plan, and a district manager sent a letter to The Salt Lake Tribune to "share some things that aren't so bad about us" after a series of stories.

Chief Executive Lee Scott wrote to Ohio's Akron Beacon Journal after a columnist said Wal-Mart deserved some blame for the closing of a local factory owned by Newell Rubbermaid Inc., one of the retailer's major suppliers.

Scott called the column a "diatribe against our company" that did not reflect the facts.

In January, he became the first Wal-Mart CEO to speak at the National Retail Federation trade group's conference. In a speech that he acknowledged sounded defensive at times, he chided the media for heavy coverage of the company's legal troubles, massive imports from China and employee health-care policies.

Other executives have also started banging the drum.

"We are not popular with a lot people," Vice Chairman Tom Coughlin said at the grand opening of a new Wal-Mart store in San Antonio in January.

"If our wages and benefits were so bad, we wouldn't have had that type of attraction with the customer," he was quoted as saying in the San Antonio Express-News. "The chain wouldn't be the size it has become if we were doing as many things wrong as people like to attribute to us."


Despite the more aggressive approach, public relations experts say Wal-Mart's image-improvement efforts are not enough to shore up its reputation.

"For years they've been a classic example of the wrong way to do PR," said Jonathan Bernstein, president of Bernstein Crisis Management and author of "Keeping the Wolves at Bay: A Media Training Manual."

"They're going to continue to get beat up as long as they basically have a reputation for being unfair or unreasonable to their employees," he said. "All the damage control in the world can't help them unless their policies change.

This year Wal-Mart faces two key tests that should help determine whether reports of worker mistreatment are isolated incidents or widespread.

A California judge is set to decide later this year whether a sex discrimination lawsuit should proceed as a class action covering 1.5 million current and former women employees.

Meanwhile, an investigation into illegal workers at some Wal-Mart stores will be back in the spotlight when a Pennsylvania grand jury completes its deliberations in a few weeks.

"If they lose one of those cases in California or Pennsylvania, it will hurt," said Paul Argenti, professor of corporate communications at Dartmouth College's Tuck School of Business.

Argenti, who advised Kmart in the early 1990s when it was struggling to compete with Wal-Mart, said Wal-Mart's "most admired company" ranking in Fortune's annual poll of executives, directors and analysts should help the company through the worst of the image problems, but it needs to change its insular corporate culture if it hopes to make new friends.

"They've been very, very internally focused for most of their life," he said. "That's built into their culture. They've never really had to reach out. Now they do."

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