Tesco chief to retire after 14 years at helm

8th June 2010, Comments 0 comments

Tesco, Britain's biggest retailer, said on Tuesday that chief executive Terry Leahy who led great changes in the business will retire in March 2011 to be replaced by the head of Asian operations Philip Clarke.

Leahy helped transform Tesco into Britain's biggest retailer selling electrical items, clothes and financial products alongside its traditional food items, while also overseeing a massive expansion abroad.

"Sir Terry Leahy has decided, after an outstanding career at Tesco, to retire in March 2011 at the age of 55 after 14 years as CEO," a company statement said.

"The Tesco Board has moved to implement its long-term succession plan, with Philip Clarke succeeding Sir Terry."

Following Tuesday's announcement, Tesco's share price was one of the biggest fallers in morning trading on London's benchmark FTSE 100 index, with a drop of 2.44 percent to 397.15 pence.

"The market was taken a little by surprise (by Leahy's announcement), but investors were reassured that the success of Tesco is broad based, and that if the hand over to Philip Clarke can be a smooth one, then concerns should be allayed," said Giles Watts, Head of Equities at City Index.

Leahy said he felt his task of turning around Tesco was "almost complete".

He said in the statement: "When I became CEO I had a plan to build Tesco around its customers, to make it number one in the UK and to find new long-term growth in non-food, in services and in international expansion.

"I wanted to develop a purpose and values that could sustain Tesco through its challenges and encourage and grow future leaders. It has taken 14 years but that strategy has become a firm reality now and so I feel my work is almost complete."

Leahy said he would "concentrate mainly on private investment" following his retirement from Tesco.

"I will, of course, keep a large shareholding in Tesco and remain its biggest supporter," he added.

Tesco chairman David Reid described Leahy as "undoubtedly one of the leading businessmen of his generation" who "has put in place a strategy which can secure the progress of Tesco for years to come".

Clarke has meanwhile worked at Tesco since 1974, when he joined as a part-time assistant while still at school. After studying economics at Liverpool university, he joined the supermarket's management training scheme.

The 50 year-old joined the Tesco board in 1998 and is currently responsible for the group's operations in Asia and Europe as well as its IT unit. In recent years, Clarke has been involved in Tesco's expansion into China, India and Turkey.

"I am honoured and delighted to succeed Terry who has taught me so much," Clarke said in the company statement.

"I am very excited by the opportunity to lead such a fantastic team of executives, many of whom I've worked with for years. Together we will build a global business which focuses on the customer and fully respects our people, our communities, our supply chain and our shareholders," he added.

Tesco also announced that it had hired its first chief executive of Asia, appointing UK retail and logistics director David Potts to the role.

Tesco recently unveiled soaring annual net profits, aided by a strong performance in Asia, and said it would create 16,000 jobs after emerging strongly from Britain's recession that ended last year.

Net profits jumped by 9.3 percent to 2.327 billion pounds in the 12 months to the end of February. Tesco employs more than 460,000 people in 14 countries around the world.

© 2010 AFP

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