BackTesco replaces Philip Clarke as CEO; Unilever’s Dave Lewis to take over
The firm's first-half profit trailed expectations, the latest in a series of setbacks since Clarke took the helm
Premium
London: Tesco Plc replaced chief executive officer (CEO) Philip Clarke after first-half profit trailed the grocer’s expectations, the latest in a series of setbacks since the company veteran took the helm about three years ago.
Unilever’s personal-care head Dave Lewis has been recruited as a successor for the 54-year-old, the Cheshunt, England-based company said in a statement on Monday.
Under Clarke, Tesco has exited businesses from US to Japan, while seeking to revive growth in the UK, where the company makes the bulk of its revenue. That so far hasn’t yielded results, with the grocer reporting the worst same-store sales in four decades in June and the stock down about 30% since Clarke took the role. Current trading is more challenging than anticipated at the moment, Tesco said on Monday.
“I would have thought Clarke would have been given a bit more time to see the strategy fail," said Bruno Monteyne, an analyst at Sanford C. Bernstein in London and a former Tesco employee. “And the data is showing that it’s clearly failing. This is clearly a profit warning. What they were doing was too little of the wrong strategy."
Tesco rose 1.8% to 290.15 pence at 8.02am in London, trimming this year’s decline to 13%.
Clarke, who has spent his adult lifetime working at Tesco, pleaded for more time from shareholders at its annual general meeting on 27 June, saying the company is undergoing “radical" changes. He said in February the company would invest at least £200 million ($342 million) a year to lower prices on essential food items such as milk and eggs as part of an effort to win back consumers from discounters Aldi and Lidl.
New CFO
Lewis, 49, becomes the second top executive to be named to Tesco’s board this month after Alan Stewart was appointed chief financial officer (CFO). Clarke will be available to support the transition through January 2015.
Lewis has held roles globally at Unilever since joining in 1987 including the chairmanship of its UK and Ireland business and president of the Americas. He brings a wealth of international consumer experience and expertise in change management, business strategy, brand management and customer development, said Tesco chairman Richard Broadbent.
“Dave Lewis knows nothing about retailing, but maybe that doesn’t matter, because as a leading supplier he certainly knows how to win price wars and perhaps that is the big issue now facing Tesco in the UK," said Nick Bubb, an independent retail analyst. Bloomberg
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
