Tesco's Philip Clarke will step down as CEO amid major company profit warnings. The company reported that quarterly comp-store sales dropped 3.7 percent, adding that Clarke will be leaving Britain's largest retailer. He will be replaced by Dave Lewis, formerly a senior executive at Unilever.
Lewis, president of personal care at Unilever and a non-executive director at BSkyB, will become the first outsider to lead Tesco, and the board hopes he will be able to improve the ailing retailer, reported The Telegraph.
In the same announcement, Tesco reported that fiscal 2014 sales are "somewhat below expectations," due in part to investments aimed at improving customer offers and building long-term loyalty.
Clarke has acted as CEO since 2011 when sales began to continuously decline. He said the company's profits are the worst he has seen in 40 years since stacking shelves for Tesco as a teenager, reported the Daily Mail. He will officially step down October 1 after 40 years with the company.
"Despite Clarke's relatively short, bumpy stint at the top, we have to remember that when he inherited the business three years ago, the focus was very much on international operations–some of which have since rightly been divested–while its core U.K. stores were overrun and underinvested," said Natalie Berg, global research director at Planet Retail. "Although we feel Clarke has made significant progress on refreshing existing stores, the fundamental issue remains–shoppers are no longer making that big weekly trip to an out-of-town superstore. Unfortunately for Tesco, over half of its stores fall in the 50,000 plus sq. ft. bracket."
This is the second change among Tesco executives in the last few weeks. Marks & Spencer's Alan Stewart signed on as CFO, replacing Laurie McIIwee. McIlwee is one of six leadership directors that have left Tesco since Clarke became chief executive.
"Having taken the business through the huge challenges of the last few years, I think this is the right moment to hand over responsibility and I am delighted that Dave Lewis has agreed to join us," said Clarke.
-See this Telegraph article
-See this Daily Mail article
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