Chip Hornsby is stepping down as the chief executive of Wolseley, the building supplies group, after just three years in the job.
Ian Meakins, chief executive of Travelex Holdings, the foreign exchange and payments business, will replace Mr Hornsby when he leaves the post in two weeks' time.
Mr Hornsby joined Wolseley when the company bought Ferguson, the US building supplies company, in 1983, and has more than three decades of experience in the building industry. But Wolseley's base in the housing sector left it highly exposed to the global downturn, and recent months have seen thousands of jobs lost as profits plunged to barely a fifth of last year's levels.
John Whybrow, chairman of the company, said: "The board recognises Chip's significant contribution to the group throughout a long and distinguished career, including nearly three years as chief executive, during which time Wolseley has faced some extremely difficult market conditions."
In total, Wolseley has cut more than 20,000 jobs since Mr Hornsby started. Some 3,500 redundancies were announced last month, alongside third-quarter results showing profits down by an eye-watering 80 per cent, to just £72m. On a constant currency basis, the picture was even worse: down 88 per cent. Revenues over the same period scraped up by 0.2 per cent to £12bn, though allowing for foreign exchange fluctuations it was down 15 per cent.
Mr Hornsby had little cheer to offer his shareholders. He said that not only were there no signs of imminent recovery, but that the industry would only be beginning to bottom out by May 2010. There will be "no improvement at all" over the rest of 2009, he said, and the commercial and industrial markets in the US are even likely to weaken further.
The majority of the 3,500 redundancies – more than 5.5 per cent of the total global workforce – were made in the US, UK and Irish, and French businesses. The job losses will cut up to 14 per cent out of the group's annual costs, once the initial expense of the programme is absorbed.
Another cost-cutting measure put together by Mr Hornsby was to spin off the loss-making US arm, Stock. In May, the company struck a deal with Gores, the private equity house, to set up a joint venture in which Wolseley held a 49 per cent equity stake. But Stock – which lost £511m in the six months to January – is still being forced to close nearly half its outlets and does not expect to make a profit until 2013.
In March, a £1bn cash call bought some breathing space for a group crippled by a £2.5bn debt pile. Risking the wrath of smaller shareholders, the £781m open right issue was supplemented by a £270m share placing restricted to Wolseley's 20 biggest investors. The cash injection was followed up with a new two-year loan worth nearly another £1bn.
The CV of Mr Hornsby's replacement, Mr Meakins, includes a spell as the chief executive of Alliance UniChem, before the Boots merger in 2006, and a senior role at Diageo, the global drinks company.Reuse content