Morrisons board bosses: 70% ‘leave the building’
Analysts Clive Black and Darren Shirley said Potts was: “… imposing his authority on a company where trading performance simply has not been good enough for some time”.
The departures had left the senior team at Morrisons with the strong trio of chairman Stuart Higginson, Potts and finance director officer Trevor Strain at the group board level. The three shared a determined focus to deliver “the necessary improvement in the sales and ultimately profit performance”, said Black and Shirley.
‘Welcome the cultural change’
“Whilst never easy for the individuals involved, we welcome the cultural change that Potts is driving through Morrisons, with initial steps that clearly communicate to the stores, in our view, that someone that is in tune with their needs is in charge,” they said.
Potts was prioritising his early actions well and stores were impacted only moderately by initial decisions, which were welcomed by the team, they added. Those decisions included: a spring clean, ditching the flawed queue management system, introducing more local flexibility, accountability and responsibility and better music.
While the departing Meijer had played an important part in contributing to Morrisons’ “more appropriate trading strategy”, announced in March 2014, his decision to live partly in his native Netherlands did not fit with the new boss’s plan.
‘Someone dedicated to living in Britain’
Board members who said bye bye
- Group customer marketing & digital director Nick Collard
- Group retail director Martyn Fletcher
- Group property and strategy director Gordon Mowat
- Group logistics director Neal Austin
- Convenience md Nigel Robertson
- Group trading director Casper Meijer
“As reflected in a company press release, Potts clearly believes that this key role needs to be undertaken by someone dedicated to ‘living and working here in Britain’,” said Black and Shirley.
Meijer was appointed to the Morrisons board in December 2012 and has led the retailer’s trading strategy with the aim of delivering lower prices, fewer and bigger promotions and a simpler shopping trip, it said.
His role will be filled temporarily by Andrew Pleasance, who has 30 years’ experience at the retailer, until a permanent replacement is found.
The new ceo had made a good start and reinforced the view that the retailer can deliver strong free cash generation to shareholders, said Black and Shirley. Delivering that would depend partly on continuing improvement in trading, cutting capital expenditure and moderate responsibilities to landlords and the pension fund.
Based on Shore Capital’s view that Potts was “driving positive cultural change through the group”, the analysts repeated their ‘buy’ advice on Morrisons’ shares.
Meanwhile, don't miss our photogallery charting Potts' key actions during his first month in office.
