Business

Ocado appoints Sir Stuart Rose as chairman

Stuart Rose will replace Michael Grade from May
Image caption Stuart Rose will replace Michael Grade in May

Online grocer Ocado has appointed former Marks and Spencer chairman Sir Stuart Rose as chairman.

Sir Stuart, who left M&S in early 2011, will join in March as non-executive director, and take up the chairmanship on 10 May.

He will replace current chairman Lord Michael Grade, who joined the Ocado board in 2006.

Lord Grade, previously chairman of the BBC and executive chairman at ITV, said he was retiring.

"It has been a privilege to be a part of their story," Lord Grade said of his six years as chairman.

The hiring of Sir Stuart comes as Ocado, which mainly delivers Waitrose groceries, embarks on expansion plans. "We are looking forward to benefiting from his extensive retail experience and counsel," the company said in a statement.

Sir Stuart said he expected Ocado to become "a powerful online player" as retail shifted towards a digital world.

He has taken on a number of part-time roles since leaving M&S, including acting as an adviser to Bridgepoint, the private equity firm, and as a non-executive director of Woolworths Holdings, the South African retailer.

Ocado, which floated on the stock exchange in July 2010, has yet to make an annual profit. It saw a £2.2m loss in 2011 and a £12.2m loss in 2010.

Its most recent results for the 53 weeks to 2 December 2012 showed sales up 13.9% year-on-year.

Shares in the group closed up 9.25% on Monday - boosted by market speculation of a potential takeover by M&S, and rose a further 6.3% on Tuesday to a six-month high of 101p

However, the shares remain just over half the 180p per share price they listed at in 2010.

Ocado Group

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Despite the timing of the announcement, which follows Monday's market speculation and reports in 2010 that Sir Stuart had considered an acquisition of the online grocer, analysts cautioned that there was no connection between the two events.

Oriel Securities analyst Jonathan Pritchard said any such bid was "highly unlikely" given the high valuation of Ocado.

"The material investment required would be very high and it is still questionable whether M&S could generate a large enough basket of online retail orders to justify that," he said.

"We think a deal at current prices is very unlikely. Its multichannel competitors are growing faster and profitability seems to be nowhere in sight," added Panmure Gordon analyst Philip Dorgan.

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