The chief investment officer of Harris’s international equity division, David Herro, told The Sunday Telegraph that he had reduced the investment from three per cent of the business to one per cent in the last month.
According to the newspaper, Mr Herro said the risk factors relating to the investment were too high to justify the US investment firm holding a big position in Tesco shares. He said he wanted the retailer’s incoming CEO, Dave Lewis, to set out a clear and coherent strategy quickly, the report added.
“If this thing is a turnaround story, we want to stay involved, but we need to hear a plan that makes sense,” Mr Herro told the newspaper.
Tesco delivered its second profit warning in two months on Friday and said Mr Lewis, a former turnaround specialist at Unilever, would start today - a month earlier than planned - with a remit for a major review of the 95-year old business. Tesco also slashed its dividend by 75 per cent to give Mr Lewis greater flexibility to revive the retailer, such as by cutting prices. Mr Herro told the Sunday Telegraph he would like to see Tesco try to differentiate itself by improving customer service, and not just by relying on price competition. Yesterday, a Tesco spokesman declined to comment on the report. The major retailers are involved in intense competition as they battle the growing number of discount rivals.
Last week, shares in Bradford-based Morrisons rose after industry figures suggested that the beleaguered retailer’s turnaround plan might be starting to work. The news prompted investors to buy into the stock which has lost a third of its value this year.
Clive Black, analyst at Shore Capital, told The Yorkshire Post that “Morrisons could materially be turning a corner”.