Corbett survives as chairman of Woolworth

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The Independent Online

Gerald Corbett, the chairman of Woolworth, has held on to his job after almost two weeks of infighting at the group's parent company Kingfisher, the retail conglomerate.

He won the backing of board members after a bitter meeting at which non-executives – including chef and businesswoman Prue Leith – are understood to have clashed with Sir Geoff Mulcahy, the chief executive of Kingfisher.

Sir Geoff said in a statement yesterday: "The senior management team that we have appointed for the new Woolworth Group, and which has the clear backing of the Kingfisher board, combines significant managerial, retailing and financial experience."

Kingfisher said Mr Corbett, whose six-month contract was due to run out in September, will remain the full-time executive chairman until a chief executive has been recruited to run Woolworth, at which point he will step back and become part-time non-executive chairman.

The demerger of Woolworth will now take place next month.

In an unexpected change of direction, Kingfisher also announced it had agreed to sell its chain of Superdrug health and beauty stores to its privately owned Dutch rival Kruidvat Beheer for £280m. A month ago Sir Geoff said the company had decided to float Superdrug along with Woolworth.

Kingfisher will book a £55m loss on the sale of Superdrug and take an additional £288m goodwill write-off through this year's accounts. The company bought Superdrug for £257m 14 years ago.

Sir Geoff is understood to have wanted to oust the 49-year-old Mr Corbett from Woolworth because he has come under a barrage of attacks from politicians, trade unions and the public for his former role as head of Railtrack and a £1.4m pay-out that followed his November resignation.

Kingfisher's directors remained silent yesterday, but a spokesman said the details of Mr Corbett's new contract, including pay, would be published by the end of the month, along with documents outlining Kingfisher's plan to demerge Woolworth in August. The company warned that Woolworth's profits would take a £15m hit this year because of a squeeze on margins.

The decision to spin off Woolworth followed nine months of dithering at Kingfisher about whether to do that or sell it.

Shareholders in Kingfisher were pleased that decisions had been made at last but said the outcome did not show Sir Geoff in a good light. "He appears to have been at odds with his fellow directors on almost every key point of Kingfisher's strategy," one institutional investor said. "It's a wonder he has hung on to his own job." Shares in Kingfisher were unchanged at 381p.

The company would not comment on its progress recruiting a chief executive for Woolworth "with significant retail experience" but is expected to make an appointment within weeks.

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