You are here
LONDON -- Tesco Chief Executive Terry Leahy plans to step down in March at the age of 55, after 14 years leading the company's transformation from an industry follower to market leader. He will be replaced by Philip Clarke, 50, the company's current head of operations in Asia and Europe, The Associated Press reported.
Leahy, who was knighted by Queen Elizabeth II in 2002, said he was leaving the group in good hands at an appropriate time.
"We're coming out of a difficult recession, which I've steered the business through," he said. "By March 2011, we'll be into a strong recovery and that's a good time for the new team to take over."
But the timing of his departure came as a surprise to the market, raising some questions over his decision to leave before Tesco's fledgling U.S. business has fully bedded in.
Tesco reported a trading loss for the 2009 financial year in the United States, as it opened new Fresh & Easy stores, but has said it believes its losses there have peaked as sales rise. It plans to open more stores at a one-a-week pace, the AP report stated.
"I'd anticipated he would continue for quite a bit longer and would stay until he proved the expansion into the U.S. had been a success," said Charles Stanley retail analyst Sam Hart, noting Clarke is not as well known in the industry.
"But he's almost a mirror image of Sir Terry and most will give him the benefit of the doubt," Hart added.
Tesco said Clarke, who joined the board 12 years ago, has broad experience within the group and was already in charge of almost 2,000 stores and nearly two-thirds of group space.
Leahy's departure will give rise to a more extensive board shake-up: Tim Mason, the president and CEO of Fresh & Easy, will become deputy CEO of Tesco; David Potts, currently the U.K. retail and logistics director, will become the company's first CEO of its Asia business; and Richard Brasher, currently commercial director, will assume the newly created role of CEO of the U.K. business, according to the report.
Leahy said he's looking at investing in "business generally" when he retires, but refused to provide further details on his plans for life after Tesco.
Fresh & Easy Opens Three in Fresno
Tesco CEO Identifies Post-Recession Growth Drivers