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Business News

Ex-Tesco chief Leahy set for profitable return to City


Sir Terry Leahy could mark his return to the City by earning himself a haul of more than £10m from a London Stock Exchange listing of an online tyre firm.

Fêted in the City for turning Tesco into the country’s dominant supermarket chain during his 14 years in charge, Sir Terry is now advising on the potential flotation of Blackcircles.com, which he joins as a non-executive director today. This is a rapidly growing website where drivers order their size and type of tyres at a click of a button and then pick them up from one of 1,350 garages.

Sir Terry has held a 25 per cent stake since 2011, when he left Tesco, and there is a link to his past as the chain’s Club Card holders can earn up to triple points on the purchase of brands such as Dunlop and Michelin.

Graeme Bissett, the chairman, is looking at a share sale that could value the business at as much as £200m: listings typically involve selling at least 25 per cent of a business’s stock to the public and institutional investors, in this case raising £50m, meaning Sir Terry could pocket more than £10m.

The business has received a raft of approaches from potential buyers that have been alerted to the group’s remarkable growth – revenue was up 20 per cent last year to £27.8m. This triggered the review of Blackcircles’ future, which is also looking at options such as selling a large stake to a strategic investor.

Founder Michael Welch now finds himself working with his former boss, having started the business using savings earned stacking shelves in the pet food aisle of Tesco 12 years ago.

He said the listing option would help to build Blackcircle’s network of branded franchise garages from 400 to 1,000 in two years.

Mr Welch added that Sir Terry is “an invaluable mentor”. However, critics say his legacy at Tesco has been tarnished in recent years following pushes into Japan and the US that ultimately ended in failure. 

Sir Terry is also expected to help bring the value retailer B&M Bargains, which he chairs, to market in a £1bn flotation that could take place as early as June.