Sir Stuart Rose named as new Ocado chairman
The surprise arrival of Sir Stuart Rose as chairman of Ocado was welcomed by investors as a major vote of confidence in the future of the online grocery retailer, sending its shares up by more than 6pc.
Analysts are sceptical that Sir Stuart Rose, who left Marks & Spencer in 2010, will turn around a struggling Ocado
Ocado is yet to make a profit since it was founded in 2000 and is under growing pressure as traditional supermarkets such as Tesco ramp up their online operations. It has slso been the subject of takeover rumours from Marks & Spencer and Wm Morrison.
However, investors took the appointment of the former chief executive of Marks & Spencer as an endorsement of Ocado’s prospects.
Sir Stuart said he was “very impressed at the impact and progress Ocado has made to date”. He added: “As retail goes through a fundamental shift into the digital world, I believe Ocado’s model and the high standards of customer service it provides will see it emerge as a powerful online player.”
The role at Ocado is Sir Stuart’s first job as a chairman or chief executive of a listed company since leaving M&S in 2010, where he infuriated institutional investors by combining the chairman and chief executive roles.
But, despite the breach of corporate governance best practice at M&S, Sir Stuart’s arrival at Ocado was applauded by shareholders.
Fidelity, which owns 12pc of Ocado and is one of the company’s biggest five shareholders, said the appointment is “encouraging”.
Tom Ewing, portfolio manager of the Fidelity UK growth fund, said: “It boosts the retail experience at the top of Ocado whilst demonstrating that key participants in the industry are waking up to the fact that people increasingly, and inexorably, want to shop for their food online.
“We are delighted with the progress at Ocado over recent months.”
Ocado’s share price rose 5.95 – or 6pc – to 101p. This followed a 5pc rise last Friday and a 9pc rise on Monday. However, shares in the company are still almost 50pc lower in value that its float price of 180pc in 2010.
Sir Stuart will become chairman on May 10 at the company’s annual meeting. He will replace Lord Grade, the former BBC and ITV chairman, who is retiring.
Tim Steiner, Ocado’s chief executive, said the company will benefit from Sir Stuart’s “extensive retail experience and counsel”.