Retailers' shares suffer on boardroom shake-ups

A finance director merry-go-round surprised the City yesterday as three top British retailers announced two hirings and an exit.

Marks & Spencer announced that it had appointed Ian Dyson as its new finance director to replace Alison Reed, who is leaving the company at the end of April.

Earlier, supermarket chain Sainsbury appointed Darren Shapland as its new finance director, while chemist chain Boots confirmed that its finance director Howard Dodd is shortly to leave the company at his own request.

All three companies saw their share prices fall in the wake of the announcements regarding their finance directors.

Marks & Spencer fell 3.5p, or just over 1 per cent, to 344.75p; Boots was off 5p at 609.5p and Sainsbury retreated 1.75p to 297.5p.

Stuart Rose, M&S’s chief executive since last summer, said in November that Reed would step down as part of management changes in an attempt to reverse years of recent underperformance.

Reed was originally due to leave last month, but will now stay on until the end of April.

Dyson, 42, who has been finance director at leisure group Rank for the past five years, spent the early part of his career with consultants Arthur Andersen, where he became a partner in 1994. He moved on to Forte before joining Hilton Group as group financial controller. He joined Rank in 1999.

Shapland, Sainsbury’s new finance director, joins the company, Britain’s third-biggest supermarket group, from Carpetright, where the 38-year-old has been finance chief since 2002. He replaces Roger Matthews, who resigned in October. Sainsbury said it was not yet clear when Shapland would take up his new post, but that Matthews would stay with the company until after the preliminary results in May.

Confirming stories at the weekend, Boots said Dodd had taken the decision to leave the company before a profit warning on 1 March.

The latter saw Boots’s shares suffer and a rash of broker earnings downgrades after the company said it had been hit by sluggish consumer spending and cost cuts had fallen short of plans.

Brokers remarked on the unusual coincidence of so many finance directors on the move at top-flight companies.

Bookseller WH Smith and sweets-to-homeware group Woolworths - both fighting to stave off competition from supermarkets - have also lost their finance directors in recent months.

Fraser Ramzan, an analyst at United States investment bank Lehman Brothers, said: "Retail is a difficult place to work. It’s difficult to attract talent."

The moves come at a volatile period for the industry, which is coming under increasing competitive pressure amid softening consumer spending and is awash with rumours of takeover activity.

Another analyst said: "Today’s share price moves are not just about the finance directors. All the three companies affected have serious trading issues."

Source