Allan Leighton is set to make a sensational return to Asda as its new executive chairman.
The retail veteran, 71, was Asda’s chief executive from 1996 to 2000, and was instrumental in a dramatic turnaround in the nineties, following his recruitment by Asda’s then chairman Archie Norman, initially as marketing director, in 1992. After staving off bankruptcy the retailer went on to enjoy an extraordinary period of growth, lowering prices and opening the George fashion brand, before being bought by Walmart in 1999 for £6.7bn.
He’s now being parachuted into the Leeds-based chain in the hope he can once again work his magic, as it flounders in a similarly perilous position.
Asda’s market share has plunged from 14.8% to 12.5% [Kantar, 12 w/e 5 November] since it was acquired from Walmart in 2021, in a £6.8bn deal that saw EG Group forecourt entrepreneurs Mohsin and Zuber Issa team up with US private equity firm TDR Capital.
Leighton will start in the new role on Monday, with visits to stores planned for tomorrow (Sunday). The hope is that his return to the business where he forged his reputation will boost morale, and will help to recruit, reassure and support a CEO.
Since CEO Roger Burnley stepped down, soon after the 2021 deal was completed, the private equity consortium has been unable to persuade a number of candidates it has approached to take on the job, despite a generous £10m pay packet.
Return to glory
Leighton told The Grocer it was “back to the future – with modernity” and vowed to return it to its former glory.
“We need to calm things down, get colleagues back on side, and rediscover Asda’s DNA. It’s back to the future – with modernity.”
In a statement released today Leighton said he was “delighted to be returning to the business, which has always been a special place for me.
”The potential for Asda now is significant, and my focus will be to work with the leadership team to help make Asda special for our colleagues and millions of customers.”
Leighton’s appointment will result in current executive chairman Stuart Rose stepping back from the role, returning to the board as a non-executive. Rose will continue to chair the EG Group.
Rose said Asda would “benefit enormously from Allan’s experience of leading the business and on behalf of the board I am pleased to welcome him back. I look forward to continuing to support Asda as a shareholder and customer over the coming years.”
He added that it had been “a privilege to work alongside the Asda team over the past three years and to support the business through this period of transition”.
Investment
Shareholders have invested £3.8bn in the last three years to create a retailer with a presence in every format, acquiring and converting the majority of EG Group’s forecourts to grow its store footprint from 623 to 1,200 stores while also adding a number of food-to-go sites via organic growth and strategic acquisitions. It’s also launched a successful loyalty app, which now has six million active customers, accounting for more than half of total transactions.
Rose was previously non-executive chairman but felt compelled to step in last month, at the age of 75, with Mohsin Issa stepping aside, amid concern over Asda’s performance since the acquisition, which Rose dubbed “embarrassing”.
In the 24 years since leaving Asda Leighton has spent most of his career in non-executive roles, chairing Business in the Community, Lastminute.com and the Royal Mail. After a brief stint as CEO of jewellery retailer Pandora from 2013-14, he became the first-ever independent chairman of the Co-operative Group, which he held until February this year.
He currently chairs the boards of Scottish drinks business BrewDog, Pizza Express and European fashion retailer C&A.
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