Sir Ken’s cautious welcome for Tesco veteran who takes helm at struggling Morrisons

Dalton Philips, Chief Executive of Morrisons
Dalton Philips, Chief Executive of Morrisons
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Sir Ken Morrison has given a cautious welcome to the appointment of former Tesco finance chief Andy Higginson as chairman elect at Morrisons, the struggling supermarket group.

Mr Higginson joins the board on October 1 as non-executive deputy chairman and will become chairman after Sir Ian Gibson retires in 2015.

The Lancastrian brings some heavyweight retail experience to the role, having served as an executive director at Tesco for 15 years.

He is currently chairman of discount retailer Poundland and home shopping group N Brown.

Sir Ken described him as “sound and experienced”.

Asked if Mr Higginson could reverse the decline at Morrisons, Sir Ken said: “The directors will be confident he can otherwise they would not have appointed him. I have nothing to do with the selection. I have met him and think he’s quite a down to earth and practical guy.”

Asked if the new chairman should fire chief executive Dalton Philips, Sir Ken said: “I have no idea. That’s his decision.

“He will be making judgements long before he takes decisions.”

Sir Ken, the former chairman and son of the founder, lambasted Mr Philips over the performance of the business at the annual general meeting in Bradford in June.

Roger Owen, the property chief who helped Sir Ken transform a small northern supermarket chain into a £15bn grocery giant, gave a similarly cautious welcome to the appointment of Mr Higginson.

Mr Owen, a main board director at Morrisons for 22 years, had previously called for Sir Ian to stand down and likened Morrisons to “a supertanker heading towards an iceberg”.

He said yesterday that Mr Higginson should “chuck the anchors off and stop what’s going on”.

Morrisons issued a huge profit warning in March, compounding share price falls that have seen the stock lose a third of its value this year and left the group sliding towards the exit of the FTSE 100.

Mr Owen warned that “the iceberg is getting nearer” and said he hoped Mr Higginson would bring some focus to the business, claiming that the board had “taken its eye off the ball” and allowed the CEO to pursue too many things at the same time, such as the failed Kiddicare and Fresh Direct investments.

Morrisons is facing a battle to recover ground lost to German discounters and was late to launch an online home delivery service.

Clive Owen, analyst at Shore Capital and a persistent critic of Morrisons over recent years, said the appointment was “very good news”.

He added: “Andy Higginson is a top quality businessman, executive and chairman in the consumer space.

“It is a much needed positive boost to Morrisons when it really needs it because it’s a business that’s been struggling for a sustained period of time.

“It’s trying to get a grasp on things in the new strategy announced in the spring, which is focused on a low price, low cost organisation. We welcome that approach but we have had to wait for it.”

He said Mr Higginson should be a force for good and make management more accountable.

“If he believes change is necessary in terms of how the business is run he will make those changes. We will watch with interest to see if the handover is accelerated.”

He said the latest market research figures served as a reminder that Morrisons has more to do than just appoint a new chairman.

Kantar Worldpanel said Morrisons saw its sales fall by 3.8 per cent in the 12 weeks to July 20, with its market share down from 11.5 to 11 per cent.

Mr Higginson said: “I am delighted to be joining the board of Morrisons.

“While there are undoubted challenges in the industry at the moment, this is a fine business and I am looking forward to working with the great team at Morrisons who work hard every day to serve customers.”

Sir Ian, who announced his decision to stand down in June, said: “I look forward to working with him to ensure a smooth transition to the chairman role.”

Revolving doors swing into overtime

Doors have rarely revolved at such pace in the British supermarket scene as has been the case in 2014, according to Shore Capital.

First it was Justin King CBE, who announced his retirement from Sainsbury’s, to be replaced by Mike Coupe as CEO. Mr King was followed by Sir Ian Gibson’s announcement of his retirement from the chairman’s job of Morrisons.

He will be replaced Andrew Higginson, who is standing down from Poundland, to be replaced by ex-Sainsbury’s colleague, Darren Shapland.

In between, Tesco has announced that its CEO and CFO will also change, making Leeds-based Asda appear an oasis of human resource calm.