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Tesco names John Allan as new chairman

Published:  18 February, 2015

Dixons Carphone deputy chairman John Allan has been appointed to lead Tesco's board of directors as Richard Broadbent departs.

Allan, who will step down from the boards of Dixons Carphone and Royal Mail on taking up his appointment on March 1, will continue as chairman of Barratt Developments and WorldPay.

Over the weekend Allan's appointment, hitherto a safe bet, was thrown into doubt as Archie Norman, the man credited with turning around Asda's fortunes in the 1990s, emerged as a favourite.

The hope is that Allan will be instrumental in steering Tesco out of its current troubled waters, and he will receive £650,000 a year, fixed for the next three years, for his efforts. His appointment is thought to be the one of the final plays in Tesco's turnaround plan, set in motion by chief executive Dave Lewis on his arrival last September. Lewis has since cut prices, up to 10,000 jobs and announced a host of store closures, as well as cancelling plans for new developments.

The retailer has been searching for a new chairman since Broadbent announced he would step down over the accounting scandal that emerged last September, showing a profits black hole of £263 million.

Patrick Cescau, senior independent director on the Tesco board, said: "Following a deep and thorough process run by a committee of independent non-executive directors, the board unanimously agreed that John Allan was the right candidate to chair Tesco at this important time. On behalf of the board I would like to thank Richard for his work as chairman. He has served the business with unflinching commitment through a period of unprecedented change, and put in place a new senior leadership team for the next stage of Tesco's development."

But some analysts voiced concerns that Tesco had not sought out a chairman with more recent experience in grocery retailing. Clive Black, a retail analyst at Shore Capital, said: "A proper win-win would have been someone like Archie Norman who has been in a turnaround and known the industry for years. Investors would have taken comfort from that. But whoever is chairman at Tesco needs to support Dave Lewis and the board has decided the best person is Allan."