Julian Wild, head of food and partner at law firm Rollits, told FoodManufacture.co.uk the development put the UK’s leading grocery retailer “on the back foot at the moment”. “It’s such a pity for them when they have got a number of issues to address.”
He said the timing of the move, so close to the annual results, was “unusual” and it was odd that no precise reason was given for McIlwee’s resignation.
However, he said one positive sign for Tesco was that its share price did not appear to have been significantly affected by the news. After the revelation of McIlwee’s departure on Friday April 4, shares on the London Stock Exchange closed at 287.4p, down from the day’s opening price of 290p.
According to reports, McIlwee had unsettled investors by failing to flag up a profit slump in central Europe and had clashed with ceo Philip Clarke over some aspects of business strategy.
Following national media speculation about McIlwee’s departure earlier today (April 4), Tesco issued a statement saying: “The board of Tesco today announces that Laurie McIlwee, chief financial officer and executive director, has decided to step down from the board and resign from the company but has agreed to remain in his role to ensure a smooth handover to his successor.
‘Commencing a process’
“The board is commencing a process to find a new chief financial officer with both internal and external applicants being considered.”
Tesco chairman Richard Broadbent thanked McIlwee for his contribution to the business over the past 14 years. “Together with Philip and the wider team, Laurie has played an important role in our process to transform Tesco and position it to be a winner in the new era of retailing. I and the board wish him every success for the future.”
McIlwee commented: “I am proud of what we have achieved at Tesco over the last few years. However, after 14 years at Tesco I feel that now is the right time for me to pursue new opportunities. I wish Philip and the team well and I am absolutely confident that Tesco will emerge from the current period of unprecedented change in the industry stronger than ever.”
In a note issued today (April 7), Black said Tesco could benefit from reviewing its board structure in the wake of McIlwee’s announcement.
In February, Black and fellow Shore Capital analyst Darren Shirley said Tesco faced a “multi-year job” in reviving its fortunes. “We remain concerned about the robustness of our financial forecasts and consensus estimates for 2014/15, given what appears to be weak trading at the start of the New Year,” they said in an analysts’ note.