|Page (1) of 1 - 03/15/12||email article||print page|
Tesco's UK head quits as retailer struggles; CEO Philip Clarke to focus on British operations
LONDON (AP) ' Tesco, Britain's biggest retailer, said Thursday that the head of its domestic business, Richard Brasher, is resigning in the wake of a profit warning following one of the company's most disappointing trading periods in years.
Tesco said Brasher will be leaving in July and that the company's chief executive Philip Clarke will take direct command of the British business. Brasher will be leaving the board immediately.
Clarke, 50, who took over as CEO last year, said his concentration on the British business "will allow me to oversee the improvements that are so important for customers."
Brasher, 49, was appointed chief executive of the U.K. operation at the same time that Clarke moved up.
Clarke's focus on the British operations comes as the company has lost market share to competitors, such as J Sainsbury PLC. Tesco's U.K. market share fell to 29.7 percent in the 12 weeks to Feb. 19, compared to 30.3 percent a year earlier, according to market research company Kantar Worldpanel. That was the lowest share since 2005.
Tesco issued a profit warning earlier this year after a big price cut campaign failed to revive sales and the company said it would step up its investment in revitalizing the British operation.
Tesco shares were down 0.7 percent at 322.34 pence in early trading in London.
They were trading above 400 pence at the start of the year, but fell sharply after the group reported disappointing trading during the Christmas and New Year holiday period.
Philip Dorgan, analyst at Investec Securities, said Brasher's departure was "a sad, but perhaps inevitable consequence of the recent profit warning."
Dorgan estimated it will take five years to get Tesco's margins back to their level in 2010-2011.
Tesco's British stores account for two-thirds of Tesco's revenues ' 67 billion pounds ($104 billion) in 2010-2011 ' and two-thirds of trading profit.
Tesco will announce full year results for 2011-2012 on April 18.