It has not been a good time for Sainsbury’s of late. While rival Tesco goes from strength to strength, Sainsbury’s is struggling to turn round its fortunes. Last November, the country’s third-largest supermarket chain -ð behind Tesco and Asda -ð posted results that were thought to be the company’s first loss in its 135-year history.
A pre-tax loss of £39m was recorded for the six months to October 2004, a little down on a profit of £323m posted at the same time the year before. Despite some respite after Christmas, the decline in food sales slowed over the festive period. Some say the company’s slide has been going on for some 20 years.
However long it is, Sainsbury’s is definitely in need of a drastic turnaround ð- so what has it gone and done? Turn to a man with no supermarket experience. Darren Shapland has just been named as the company’s new finance director. A slightly anonymous figure, he nevertheless joins Sainsbury’s with a good reputation.
City figures claim he has done a good job and his last firm, floor coverings retailer Carpetright, sent him off with a glowing reference.
The 38-year-old is joining Sainsbury’s on a £400,000-a-year contract. He will also be in line for an annual bonus. Shapland is expected to join a long-term incentive plan for the top bosses at Sainsbury’s -ð if sales can be increased by £2.5bn and boost profits over the next three years.
Shapland takes over from Roger Matthews, who had stated his intention to leave the job after the company’s disappointing results were announced last year. Matthews will go after the company announces preliminary results in May.
Shapland, who has joined Sainsbury’s from Carpetright where he was group finance director from 2002, has a strong retail, and managerial, background. He was also the finance director between 2000 and 2002 at high street chemist Superdrug, as well as at Arcadia and Top Shop.
Other posts include a stint as the joint managing director at Arcadia and the director of the supply chain programme at the Burton Group.
His retail credentials are impeccable, but does Shapland have what it takes to cut it in the supermarket sector? Sainsbury’s chief executive Justin King seems to think so. He said Shapland would be ‘a great asset’ and that they were specifically looking to recruit a retailer.
The board looks likely to try and position Sainsbury’s somewhere in the middle range of supermarkets, somewhere between Somerfield’s at one end and Waitrose at the other.
But Shapland’s first concern when he joins Sainsbury’s -ð a start date had yet to be confirmed at the time of going to press, though Carpetright said he would not leave before they announced its results in June ð- could be a takeover battle.
Rumours continue to circulate that the board will have to see off an attempt supported by the original Sainsbury’s family. Allan Leighton, the former chief at Asda, is just one of those rumoured to be interested.
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