Tesco back in turmoil over rumours that finance chief Laurie McIlwee is to depart
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Friday 04 April 2014
Tesco's embattled chief executive Philip Clarke was suffering yet more damaging speculation last night with renewed reports that his finance director Laurie McIlwee was to quit as soon as next week.
The company declined to comment on the story, which has been speculated at over recent months, although analysts said the growing clamour could drive Mr McIlwee to resign. "There's clearly some people out to get him," one executive said.
If Mr McIlwee did resign next week it would create a major headache for Mr Clarke who is due to report another set of disappointing results a week on Wednesday.
Tesco has lost a string of top executives since Mr Clarke's promotion to chief executive in March 2011. Tim Mason, who headed the failed US launch, Richard Brasher, UK chief, David Potts, head of Asia and Andrew Higginson, who led the Tesco Bank, have all left.
Some analysts say that is not surprising, given that Mr Clarke has been wrestling with the legacy of his predecessor Sir Terry Leahy's over-expansion abroad and lack of investment at home. Mr Clarke has been left with a string of underperforming businesses.
It has been widely reported that Mr Clarke and Mr McIlwee have clashed on key areas of strategy, a charge that was repeated in the Financial Times last night, citing two sources, although this was denied by one senior executive at the company who said the pair were remained on good terms as recently as a meeting on Tuesday.
However, others say the departure of such a key executive as his finance director would leave the management team dangerously thin. Shares are at their lowest level for nearly a decade and investors are impatient at the company's seeming inability to stem the gradual decline in sales growth and compete with discounters like Lidl and Aldi.
Mr McIlwee has been finance director since 2009 although he has been with the company since 2000 when he ran the UK finance department.
Reports last month said the company had been considering Mr McIlwee's position since a February investor presentation when it scrapped one of its key profit margin targets to enable it to compete more rigorously on price. He has also pledged to step up the revamp of his UK stores.
Some investors had already been questioning his grip on the finances last autumn when Tesco suddenly warned about profits falling in central Europe.
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