Woolworths, the Australian supermarket chain looking for a new boss, said it may be another 12 months before fresh leadership is installed, complicating a turnaround that the company already expects will take years.
Chairman Gordon Cairns, who joined Woolworths in September, said he has interviewed three external candidates to far. But after factoring in non-compete periods, it might take between nine months and a year to replace outgoing Chief Executive Officer Grant O’Brien, Cairns told reporters after the company’s shareholders meeting in Sydney on Thursday.
“It’s a long time,” said Daniel Mueller, an analyst at Morningstar Inc. in Sydney. “I can’t recall anything like it. The risk is that without a CEO they just keep chugging on and the issues don’t get addressed.”
Woolworths has been trying to fill its top job since June, when O’Brien announced his retirement and described the company’s recent performance as “disappointing.” Cairns appealed for patience from shareholders, already hurting from tumbling Woolworths shares this year, as he warned disgruntled customers aren’t likely to rush back.
The chain needs new blood to fight assaults on all fronts. The primary grocery business is being undermined by Aldi discount stores and Wesfarmers-owned Coles. At the same time, a home-improvements venture with Lowe’s is losing money as it struggles to rein in the market leader, Wesfarmers’s Bunnings.
Major decisions can’t wait for a new CEO, Cairns said. The top priorities are reinvigorating the supermarkets, which account for 70 percent of profit, narrowing losses at the home- improvements unit, Masters, and sharpening leadership at Big W, the discount-goods chain where earnings have halved in five years.
When Cairns joined Woolworths, he said his most pressing task was finding someone to lead the almost 200,000-strong workforce. Addressing shareholders Thursday, he said the board had asked O’Brien to stay on as CEO until his successor was found because there were no internal candidates at the time.
“We could not have continued without him in place,” Cairns said.
News by Bloomberg, edited by ESM. To subscribe to ESM: The European Supermarket Magazine, click here
