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Retail round up - The Sunday Papers
Archived article dated Sunday June 28th 2009
M&S succession planning rumbles on, David Tyler in the running to become the next Sainsbury chairman, Supermarkets in land grab, Home Retail pay plans may change..
The Sunday Times
The Local Authority Pension Fund Forum (LAPFF), which represents £80 billion of local council pension funds, is backing Sir David Michels, the former Hilton boss, to replace Sir Stuart Rose as Marks & Spencer chairman. Michels is deputy chairman and senior independent director at M&S but controversially threw his hat into the ring to succeed Rose earlier this month. It is thought his candidature has irritated Rose and he has privately signalled that he would not favour Michels succeeding him. Michels’ interest could prove controversial because he is in charge of finding a successor to Rose – triggering fears of a conflict of interest. Full article.
The global fashion house Valentino has become the latest investment by Permira, the private-equity firm, to be forced into debt negotiations with its banks. Permira, whose investments include New Look, the retail chain, and bingo hall operator Gala Coral, has begun discussions with a consortium of banks, including Citigroup and Italy’s Unicredit, about the sustainability of Valentino’s €2.5 billion (£2.1 billion) debt. Full article.
The Sunday Telegraph
David Tyler, a former executive at the group behind Argos and Homebase, is in the running to become the next chairman of J Sainsbury. Mr Tyler, who was finance director of GUS between 1997 and 2006, is on a final shortlist of about three candidates to replace Sir Philip Hampton at the helm of Sainsbury's. One of the other contenders is understood to be John Peace, with whom Mr Tyler shares the boardroom at Burberry, the luxury goods group. Niall FitzGerald, the deputy chairman of Thomson Reuters, and Sir Crispin Davis, the former chief executive of Reed Elsevier, have been linked to the process but are not currently candidates to replace Sir Philip. Full article.
Omar Fayed, the youngest son of Mohamed Fayed, has left Harrods, raising questions about a future successor at the helm of the luxury shopping group. Mohamed Fayed appointed his son to the board of Harrods and 10 subsidiary companies in 2006 but Omar has now left to study for an MBA. Omar was just 19 when appointed to the board but was still seen by City analysts as a future successor to his father. It remains unclear whether the MBA is being seen as a precursor to his return to Harrods or whether his decision to leave the company signals a full-time change. Full article.
Marks and Spencer will this week see an improvement in quarterly sales overshadowed by the continuing row over the future of executive chairman Sir Stuart Rose. Sir Stuart is facing calls to share power at Britain's largest clothing retailer a year after he saw off an investor rebellion over his elevation from chief executive to executive chairman – a post that goes against the combined code on corporate governance. He is expected to face another revolt at the company's annual meeting on July 8. Three shareholder advisory groups Glass Lewis, Pirc, and RiskMetrics are asking investors to support a resolution calling for the roles of chairman and chief executive to be split, and for the appointment of an independent chairman by July 2010. Full article.
The Observer
Britain's supermarkets are using the property crash to seize sites for new stores in a land grab that could redefine the retail sector for years to come. The move will consolidate the supermarkets' stranglehold over the retail sector and alarm MPs, small businesses and green groups.Tesco and Asda, the biggest retailers, are committed to opening 2.5m sq ft of new space this year, while Sainsbury's wants to add 2.5m sq ft - 15% of its floorspace - by March 2011. Morrisons is on track to open 1m sq ft by January 2011.But the Observer has learned that all the major supermarkets are scouring retail parks where tenants have gone out of business, and buying empty high-street shops and pubs for new stores. Sainsbury's said recently it was raising £450m to buy distressed development sites. Full article.
Financial Times Sat / Sun
A shareholder revolt over pay, performance and succession planning at Marks and Spencer is looming at next month’s annual meeting of the retailer. Some big shareholders are expected to vote against the remuneration report and the report and accounts. Others have warned they will vote against or withhold their support for the re-election of Lady Louise Patten to the board. The rebellion reflects mounting investor unease about the group’s governance and how it will replace Sir Stuart Rose as both chairman and chief executive in good time for his planned retirement by July 2011. Full article.
J Sainsbury may not have a new chairman in place by the time of its annual meeting next month, extending the time until a replacement is found for Sir Philip Hampton. The supermarket has been searching for a successor to Sir Philip since his appointment as chairman of Royal Bank of Scotland. Analysts say an appointment is unlikely before the retailer’s annual meeting on July 15. The timescale has sparked fresh speculation that John Peace, chairman of Burberry and Experian and the former chief executive of Great Universal Stores, is among the candidates. Full article.
The owner of Homebase and Argos has triggered a high-level alert among top investors of a serious breach of governance. The Association of British Insurers, whose members control about 15 per cent of shares traded on the London Stock Exchange, has warned over proposed changes to pay plans at Home Retail. The so-called “red top” alert could spark abstentions and no-votes against Home Retail’s remuneration report at the annual meeting on July 1. Full article.
The Independent on Sunday
The extent of the recovery in Britain's retail arena is likely to become apparent this week when a raft of high street names including Marks & Spencer, HMV, Game Group and CarpetRight, as well as the online retailer Asos deliver numbers to the market. Marks & Spencer's embattled executive chairman, Sir Stuart Rose, is expected to unveil disappointing first quarter sales figures ahead of next week's crucial annual meeting. Corporate governence advisory firms Pirc and RiskMetrics and the UK's biggest FTSE 100 shareholder, Legal & General, have re-iterated their wish for Sir Stuart to relinquish his dual role at Marks & Spencer as soon as possible. The Local Authority Pension Fund Forum has tabled a resolution calling for him to split the top jobs at the firm. Full article.
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