Delhaize CEO plans retirement by year-end
Delhaize CEO plans retirement by year-end
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Delhaize Group SA
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After 15 years at the helm of Belgian retailer Delhaize Chief Executive Pierre-Olivier Beckers will step down at the end of the year, just as a revamp of its U.S. Food Lion chain is gaining momentum. The departure of Mr. Beckers, who is 53 years old, comes as a surprise, although he will stay on until a successor has been found to ensure a smooth transition and take on a role as nonexecutive board member. Mr. Beckers said Wednesday the company had to move forward after a couple of challenging years, with a new leader who would bring "fresh thinking." "It is healthy for a company to install a new person," he added. Mr. Beckers joined Delhaize in 1983, has served as a director since 1995 and was appointed president and CEO in January 1999. Although Delhaize struggled to respond to a change in consumer demand following the 2008 credit crisis and subsequent recession, the announcement comes as the company regains momentum in the U.S. after a thorough revamp of its Food Lion stores. Delhaize generates 64% of sales in the U.S. "As shown by our recent results, business performance continues to strengthen following our initiatives over recent years," said Mats Jansson, the retailer's chairman. "This positions the company well for the future and provides a great platform for his successor," Mr. Jansson added. Delhaize said it is looking both internally and externally for candidates and expects to have a new chief executive in place by the end of the year. The departure of Mr. Beckers took investors by surprise. Analysts credit him with a solid track record through sometimes difficult times. "It is not that he hasn't done well", says ABN Amro analyst Robert Jan Vos. "Under his leadership, the largest repositioning [in the U.S.] is executed and it has proved to work". The company revenue rose 2.1% at constant exchange rates to €5.52 billion ($7.22 billion) in the three months to March 31. Net profit from continuing operations for the quarter was €60 million, compared with a loss of €2 million in the same period last year. But while Mr. Beckers is credited with the company's recent turnaround, he also presided over a tough period for the retailer, which is viewed by analysts to have responded slowly to consumers tightening their belts amid rising unemployment and economic uncertainty in recent years. Delhaize didn't start repositioning its 1100 Food Lion stores—by closing stores and investing in prices cuts—until 2012. About 500 stores have been revamped and 126 closed. Under Mr. Beckers' leadership the company has also launched the low-price Bottom Dollar chain in the U.S. in an effort to appeal to bargain-seeking shoppers. By the end of 2012, there were 56 Bottom Dollar stores in the Philadelphia and Pittsburgh areas. Sluggish growth and efforts to regain momentum have hit the share price. In February 2010, Delhaize shares peaked at €64, falling to as low as €26 in November 2012. Mr. Beckers' successor has the task of accelerating organic sales growth momentum further and restoring margins in the longer term. Delhaize has sacrificed a lot of margin in its attempts to win consumers back and enhance sales. Source: WSJ |
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