A FORMER Morrisons director has hit out at a veteran stockbroker over comments about the grocer’s decade-old acquisition of Safeway.
Roger Owen, group property director for 22 years until his retirement in 2009, contacted The Yorkshire Post after Keith Loudon OBE, senior partner at Redmayne Bentley, gave his views on Morrisons’ relegation from the FTSE-100.
Mr Loudon said: “Things started to go wrong with the takeover of Safeway, with the takeover badly managed. It has then drifted from pillar to post.
“The company has changed, going from bad to worse. It finds itself in a mature market, with well-managed competitors fighting for the available business.
“The optimists say Morrisons is a ‘takeover target’ or a recovering stock. The market will now see it as highly speculative.”
In a letter to The Yorkshire Post, Mr Owen said: “There won`t be many Morrison watchers or shareholders who have had much to smile about over the last two-to-three years, thanks to the appalling mismanagement of the business by the unlamented Dalton Philips, propped up by the equally clueless board chaired by Sir Ian Gibson but last Saturday’s article attributing comments to broker Keith Loudon, about a possible takeover and the mistakes made with the Safeway takeover, did have me choking with laughter over my cornflakes.”
Mr Owen added: “If Mr Loudon had taken the trouble to look back at the actual figures he would have seen that the post Safeway period went very well once the real depth of that company’s issues were out of the way, including the profit warnings and one year’s loss.
“Over 200 stores were converted by November 2005 in the largest project of its type ever undertaken in retail in record time. The second phase of store extensions began, store disposals, both mandatory and commercially motivated were completed generating income almost exactly half the purchase cost of £3.35bn making the overall what I have called ‘the deal of the century’.
“Indeed the company reached 36 in the FTSE with a market capitalisation of £12bn or so. Not bad to say it was all mishandled!
“All of this was then underlined by the performance of the stores themselves which took off at a staggering rate of sales increase, all of which Mr Loudon would and should have known if he had taken the trouble to check the company accounts and statements.
“Sales increases of huge proportions were the order of the day. Why? Because we gave the public what they wanted, yes, even in the South.”
Mr Owen said when Marc Bolland arrived as chief executive in summer 2006, he injected further impetus in the business and the figures continued to forege ahead.
He added: “Indeed at the end of the financial year February 1 2009, my retirement day, sales in a majority of Safeway stores were still showing increases year on year of significant proportions, over 25 per cent in the best and top sales store and mid teens in the majority - fantastic.
“Only 18 months into the Gibson/Philips era did things start to go wrong and we all know what has followed, except Mr Loudon apparently. My advice to him would be to change the record or get off the turntable. Perhaps a re-examination of the facts would help.”
Mr Owen was a vociferous critic of the previous Morrisons leadership regime, telling The Yorkshire Post in 2014 that the grocer was like “a supertanker heading towards an iceberg”.