Sainsbury's sacking gives headhunter headache

Whitehead Mann fired after recruiting unpopular candidate for top job. Abigail Townsend and Clayton Hirst report
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J Sainsbury has fired executive headhunters Whitehead Mann after the debacle earlier this year over the proposed appointment of Sir Ian Prosser as chairman.

J Sainsbury has fired executive headhunters Whitehead Mann after the debacle earlier this year over the proposed appointment of Sir Ian Prosser as chairman.

Sir Ian, the former boss of Six Continents, had accepted the post but his appointment caused an outcry in the City. Investors did not believe him the best candidate and he eventually bowed to pressure and refused the job.

At the time, Sainsbury's was tightlipped about its relationship with Whitehead Mann and a spokeswoman declined to comment last week. But the relationship has now been termin- ated and a range of other firms have been appointed.

The news coincided with the revelation that a Whitehead Mann candidate lined up for the chief executive's job at British Land, Philip Yea, had pulled out days before he was due to sign the contract. Mr Yea was appointed as chief executive of 3i on Friday.

In a terse statement to the Stock Exchange, British Land explained how, "with the help" of Whitehead Mann, it had identified a suitable candidate and "thought that it had settled detailed terms with him".

Separately, British Land said it would continue working with Whitehead Mann, but the headhunters, under the chairmanship of Sir Colin Southgate, could now face the embarrassment of working beside a rival firm on the account.

Well-placed sources revealed that Chris Gibson-Smith, the British Land non-executive director who is running the search for the chief executive, is considering hiring a second firm to speed up the search. British Land executives were said to be exasperated at the news that Mr Yea, the former finance director of Diageo, had pulled out. But it is understood that British Land, the country's second- largest quoted property business, decided that ditching Whitehead Mann altogether would only delay the appointment of a new chief executive.

The company is under pressure from shareholders to split the roles of chairman and chief executive, held by John Ritblat, to meet modern standards of corporate governance. Mr Ritblat promised he would divide the roles in time for the annual general meeting in July. But sources close to the company now concede this is unlikely.

Sainsbury's had also expected to have Sir Peter Davis's successor wrapped up by its full-year results on Wednesday. Pressure will mount after the expected news this week that the head of supermarkets, Stuart Mitchell, once considered a possible candidate for the chief executive's job, has quit. Mr Mitchell has been with Sainsbury's for 22 years

The supermarket's relationship with Whitehead Mann goes back to Anna Mann, who founded the business with her husband, Clive Mann, 28 years ago. Mr Mann is deputy chairman but Mrs Mann, who placed the recently departed Marks & Spencer chairman Luc Vandevelde, left at the end of March after the group's £3.6m acquisition of rival Leonard Hull. Mrs Mann has since set up boardroom consultancy MWM.

Whitehead Mann reported a £22m loss last year, but a source close to the firm downplayed the significance of losing the Sainsbury's account as well as the British Land debacle.

"Prosser was a contract that the City didn't think was suitable," said the source. "British Land was a contract that pulled out at the last furlong. It's a commercial world."

Recruitment firms are in demand, with a spate of senior City jobs up for grabs. As well as vacancies at Sainsbury's and British Land, the chairmanship of Marks & Spencer is now open to applications. A host of names have been connected to the post, including former Arcadia boss Stuart Rose and Tory MP Archie Norman. It is believed that Mr Rose has yet to be approached, and retail insiders are doubtful he would be offered it.

One said Mr Rose was "a leading candidate", but added: "The main caveat would be the extent to which he would tread on [chief executive] Roger Holmes's toes. He's got a strategy and that's got to be allowed to run its course, otherwise you might as well chuck him out."