Former M&S boss to head loss maker Ocado

In his most high profile appointment since stepping down from M&S two years ago, Sir Stuart will take on the role of chairman when Lord Grade retires on May 10.

Ocado, which largely sells the products of upmarket grocer Waitrose, has enjoyed rapid growth in sales and high customer service ratings.

It recently reported a 14 per cent increase in sales to £91.6m in the six weeks to January 6. But Sir Stuart’s biggest challenge will be that it hasn’t made a profit since it was founded by three Goldman Sachs bankers in 2000.

Shore Capital analyst Clive Black, a long-standing critic of Ocado who rates Sir Stuart, took a dim view of the appointment.

“Bad companies will always beat good management,” he said. “We believe Ocado’s progress to date has been pretty disastrous for shareholders.”

However, Sir Stuart said: “I have been very impressed at the impact and progress Ocado has made to date.

“As retail goes through a fundamental shift into the digital world, I believe Ocado’s model and the high standards of customer service it provides will see it emerge as a powerful online player.”

He joins Ocado as it faces intense competition from supermarket chains Tesco, Asda and Sainsbury’s. Morrisons is expected to announce plans to launch an online food offering when it announces annual results in March.

Sir Stuart, who has worked in the retail sector for 41 years, will become an independent non-executive director and chairman designate on March 11 before succeeding broadcasting executive Lord Grade, chairman for six years, after Ocado’s shareholder meeting in May.

Numis analyst Andrew Wade said the endorsement of Ocado’s business model by a man of Sir Stuart’s retail stature is reassuring for investors.

Sir Stuart is credited with defending M&S from a takeover bid in 2004 by tycoon Philip Green.