John Clare is to step down as chief executive of the Dixons to Currys electrical goods retailer DSG International in September.
Mr Clare, 56, is one of the longest-serving chief executives in the retail sector, and the fourth-longest serving head of a FTSE 100 company. He has been with Britain’s biggest electrical goods group for 22 years, the past 13 as chief executive.
But, in an announcement that took the market by surprise today, DSG said Mr Clare has decided to take early retirement.
The board has “a process in place” for the appointment of his successor and expects to make an announcement shortly, the statement said.
A spokesman indicated this would be “within a matter of weeks”. He added: “The process is very much in hand.”
Mr Clare said he felt it was “time to pursue other interests and hand over the leadership for the next phase of the group’s development”.
As he is retiring, there will be no severance pay. His base salary last year was £666,000 and his total package just over £900,000.
In a move to reassure the City on current trading, DSG today repeated its recent trading update, saying it expects profits to be in line with expectations.
Earlier this month the group revealed it was writing off up to £200m to cover the cost of its loss-making operations in Italy and France, and the sale of its UK business mobile company.
Retail analyst Nick Bubb at Pali International believes Mr Clare is going out “on a reasonably good note” as May has been a “surprisingly good month” for the group.
He believes the new chief executive will come from within DSG and tips finance director Kevin O’Byrne as the most likely successor. Other candidates could include the Scandinavian Per Bjorgas, who runs the electrical division, including Currys, while a “dark horse” might be Keith Jones, who runs PC World in the UK.
Mr Clare’s departure could also fuel hopes of a break-up bid for the group. Mr Bubb said: “We have long argued that either DSG’s management would unlock the shareholder value buried in its best brands (PC World and Elkjop) or that someone else would do it for them.”
Shares in DSG added 4p to 171.5p in early trading.
The announcement from DSG comes as rival electricals retailer Kesa, which owns the Comet chain, is also thought to be searching for a new chief executive to succeed Jean-Noel Labroue, who has headed the group since it was spun out of Kingfisher four years ago.
Fiona Walsh
Thursday May 31, 2007
Guardian Unlimited