London: Terry Leahy, the longstanding boss of Tesco, has announced his surprise resignation from the world’s No.3 retailer and will be succeeded by lifelong company man and head of international business Philip Clarke.
Tesco said on Tuesday Leahy had decided to retire in March 2011 at the age of 55 and after 14 years as CEO, during which time the British company has grown to dominate the retail market at home and expand abroad from the United States to China.
Clarke, 50, has worked at Tesco throughout his career and is head of the group’s fast-growing international businesses in Asia and Europe, as well as information technology.
Tim Mason, head of the group’s US business and another potential successor to Leahy, will be given additional group responsibility for branding and climate change, and will become deputy chief executive.
By 0713 GMT, Tesco shares fell 1.7% to 400 pence, the biggest fall on the UK’s benchmark FTSE-100 index.
Collins Stewart analyst Greg Lawless said the timing was a surprise but that Clarke was a good choice as successor.
“Phil (Clarke) is Tesco through and through. He’s been running the international business well and was seen as one of the leading internal candidates,” he said.
The decision may come as a blow to Andrew Higginson, head of retail operations, and finance director Laurie McIlwee, both of whom were also tipped as potential candidates for the top job.
“There is no better job than leading Tesco and after retirement I will concentrate mainly on private investment,” Leahy said in a statement. “I will, of course, keep a large shareholding in Tesco and remain its biggest supporter.”
David Potts, retail and logistics director in the UK, will become head of Tesco’s Asia business, while commercial director Richard Brasher will assume the newly-created role of chief executive of the UK business and take over responsibility from Potts for Ireland.