Asda replaces chair Stuart Rose with former chief Allan Leighton
Laura Onita in London
Skip to the comments area.
Access the Editor's Digest at no cost.
Roula Khalaf, the Editor of the FT, shares her top picks in this weekly newsletter.
Stuart Rose, a prominent figure in the city, has stepped down as the executive chair of Asda, with Allan Leighton taking over the role. This change comes as the UK's third-biggest supermarket is facing challenges related to a major IT upgrade and a decline in sales.
Rose, who has been the chair since 2021, began managing the grocery store’s daily operations in September. She took on this role together with Rob Hattrell, an executive from TDR, the private equity firm that holds a majority of Asda's shares, following the resignation of co-owner Mohsin Issa.
The company announced on Saturday that 75-year-old Rose will stay on the board to help facilitate a smooth transition before he resigns.
Leighton, who is 71 years old, served as the CEO of Asda from 1996 to 2001 and led the Co-op, a competing grocery store, for nine years, in addition to other high-ranking positions he’s held. He expressed his excitement about rejoining the company and mentioned that Asda has a lot of promising opportunities ahead.
The company, which was purchased by the Issa brothers and TDR for £6.8 billion in 2020 from American parent company Walmart, has faced challenges lately with stock shortages, unkempt stores, and unsatisfactory customer service.
The company has seen a reduction in its market share and reported a 2.5% decrease in overall revenue, not counting fuel, for the quarter that concluded on September 30. Additionally, there was a 4.8% decline in comparable sales.
The company also cautioned that it could incur a loss of £100 million due to adjustments in employers' national insurance payments outlined in the Budget. Additionally, it recently laid off around 500 employees at its headquarters.
Asda has been working to separate its IT system from Walmart's, which has led to issues with payroll and online orders. According to TDR's Hattrell, Asda is nearing the end of this challenging and expensive task.
Leighton is recognized for revitalizing Asda in the late 1990s, working alongside Archie Norman, who is currently the chairman of M&S, and playing a key role in the company's sale to Walmart.
In an interview with the Financial Times on Saturday, he explained that the supermarket needed to embrace a blend of nostalgia and contemporary elements, highlighting the importance of reinforcing Asda's reputation for offering good value.
The supermarket will carry on its extended quest for a CEO with Leighton at the helm.
According to two individuals familiar with the selection process, Rose was hesitant to extend his time with the grocery chain. Following the announcement, Rose stated that Asda would greatly gain from Allan’s expertise and that he would remain involved with the company as a shareholder and customer in the years ahead.
Gary Lindsay, managing partner at TDR Capital, noted that Asda boasts a top-notch superstore network and a solid position across all retail formats. He emphasized that Allan's expertise and deep knowledge of Asda will be invaluable as he guides the company through its next phase of growth.
