Departure of Morrison’s Finance Director Hits U.K. Supermarket Hard

Bloomberg News
The resignation of a finance director is a blow for any company.

But when the finance director is arguably regarded as the best at his job in the sector–I once heard him described as a “hero among the financial community” by a delegate at a retail conference–and is universally heralded as a “safe pair of hands”, then the blow becomes even harder to take.

Such is the situation faced today by Wm. Morrison, the U.K.’s fourth-biggest grocery retailer, following the resignation of Richard Pennycook after seven years in the job.

Mr. Pennycook will serve his 12-month notice, but he will be tough to replace. He came to Morrison shortly after its takeover of fellow grocer Safeway, with a brief to turnaround the business following a series of profit warnings.

He–along with former CEO Marc Bolland–succeeded in putting the firm back on track, overseeing large sales increases and a rocketing share price, while being rewarded with big bonus incentives. When Mr. Bolland left in 2010 to take the reins at Marks & Spencer, Mr. Pennycook was seen by many as his natural successor in the top job.

But the CEO role was given to a leftfield candidate in Dalton Philips, who came from Canadian retailer Loblaw.

Mr. Pennycook ploughed on regardless, but the snub, along with long weekly commutes to Morrison’s Bradford HQ in the north of England, could be a factor in his decision to focus on a “portfolio career,” according to independent retail analyst Nick Bubb.

“I suspect life in Bradford gets him down (he’s not a Northerner) and he wants a break,” Mr. Bubb said.

Philip Dorgan, an analyst at Panmure Gordon, added: “While he is not leaving the company with immediate effect, this news will not be taken particularly well by the market, in the round.”

It wasn’t: Morrison was the second biggest faller in the FTSE 100 at mid morning.


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