Shore Capital: Tesco 'Not At Ease With Itself'
Published on Apr 8 2014 12:11 PM in Retail
A leading retail broker has said that the abrupt resignation of Laurie McIlwee (pictured) as Tesco chief finance officer on Friday afternoon is an indication that Tesco is "not at ease with itself, united in its direction, and comfortable in its own skin."
Clive Black of Shore Capital Stockbrokers said that the timing of the announcement of McIlwee's departure, on a Friday afternoon, rather than first thing in the morning when markets open, suggest that the departure was "not especially structured", and that "succession planning has not featured at the top of the priority list" with respect to Tesco's senior finance function.
He added that the cultural traits that led to McIlwee's departure are "reflected in the operational performance of Tesco in our view, most notably in the UK, its core market, where it has been sustainably and materially under-performing."
With Tesco due to report its 2013/14 full year results on April 16, the resignation "makes for more awkwardness", however this is likely to be short lived, as a new appointment is expected in due course.
"What is most important for the Group's shareholders, to our minds at least, is that control is apparent," said Black. "The appointment of the right CFO is important but perhaps broader Board reconstruction is also necessary to effectively take matters forward."
McIlwee, who has held the position of CFO since 2009, will remain as finance chief at the business until a replacement is found. He has worked at the retailer since 2000.